Everyone is talking about the rise of chatbots in real estate and they’re all overlooking a key issue: consumer value.
Bots are being heralded as an important trend for 2017. As Chris Rediger writes in Realtor Magazine, bots are “a solution to engaging potential customers in meaningful conversation.” James Dearsley chimes in, saying the “power of the chatbot can be used as an entry point customer engagement tool for agencies.”
Bots are being positioned as a valuable tool for real estate agents. But bots face a problem of value asymmetry: what’s good for a real estate agent is not necessarily good for the consumer.
Bots are positioned as a tool to help real estate agents. By automatically nurturing online leads, a bot saves an agent time and energy, and delivers them hot leads on a silver platter! The value goes to the real estate agent.
But what about the consumer?
If bots are going to be successful, we need consumers to actually use them. Why would a home buyer or seller use a bot? What’s the value for them?
Structurely has launched a real estate bot, Holmes, to grow and nurture leads. The web site offers a compelling vision of how this is good for agents, but I question the consumer value. Consider the following screenshot from their web site:
Compared to the search experience on Zillow:
(The “More” option is for updated kitchens.)
It’s the same thing. The value proposition for consumers is identical to conducting a search on a major property portal.
I get that bots can have conversations with potential consumers, but how much value does that actually add? If I’m searching online for a home, I really don’t want to have a conversation about it; I want results.
The trust factor
The second problem with bots—and a critical concept to understanding their eventual usage—is one of trust. Simply put, will consumers trust a bot over a human?
As Andy Soloman states, “Research has reached the point at which IBM Watson can replicate what a physician or GP is saying 90% of the time. As a patient, however, who are you going to trust more? A robot, or a real doctor sitting in front of you telling you what’s wrong?”
Buying a home is a massive transaction in someone’s life. Will consumers trust a bot for something this important? They may use them for a more efficient home search process, but I don’t believe people will ever put a bot—or technology, for that matter—on the same level as a human. That’s why we have engineers in front of our trains and pilots in our cockpits. When it really counts, we trust humans more than machines.
A bot will never replace the role of an agent—an actual human being—in the real estate process.
This leave bots with a narrow focus of utility, primarily around information-gathering and answering questions. But these are two areas where strong alternatives already exist, specifically property portals and real estate agents.
How bots can be successful
For bots to be successful (which I think they can be), we need to focus on the additional value they can provide to consumers. This value needs to exceed what consumers already get from alternatives.
I’ve previously written about the principle of quality: when launching a new product, you must provide more perceptible value than the status quo.
And remember: if you must explain your value, it’s not as great as you think.
In the case of bots, the value being provided to consumers is, at best, on-par with what they can currently get. In fact, I would argue that in many cases it is sub-par because of the limitations around language processing. I know exactly what I’m getting when I set search criteria on a portal; with a bot, I’m never quite sure it will understand me.
To use another real world analogy, let’s consider automated customer service hotlines. Would you rather navigate a maze of “press 1 for... ” and “tell us how we can help you…”, or would you rather be connected to an actual human being? These hotlines are good for businesses, but are they good for consumers?
I believe in the long-term promise of chatbots. But for bots to provide true utility, we need to change the conversation.
So whether you’re an agent thinking about using a bot in your business, or a tech vendor trying to sell bot technology to real estate agents, please, let’s start talking about how bots are good for consumers, not just agents.