Canaries were once regularly used in coal mining as an early warning system. Toxic gases such as carbon monoxide and methane in the mine would kill the bird before affecting the miners. Because canaries tend to sing much of the time, they provided both a visual and audible cue in this respect.

Is housevalues.com a canary in the real estate coal mine?

Several years ago I got suckered by a TV commercial. We were considering selling our home and a commercial advertising an online service to give us the value of our home caught my attention. I should have known it was too good to be true. I was envisioning a site where I enter my home information and viola I get a value estimate. What a cool service I thought. So I logged on to housevalues.com and was immediately disappointed. What I was told in the commercial was not what I got. Instead of a service built with my needs in mind it was nothing more than a form promising someone would get in touch with me. The dreaded lead-trap. I knew that entering any information here was a prescription for a lifetime of spam. I quietly closed the browser.

So I wasn’t surprised to read this week that housevalues.com just laid off 100 employees and is closing a call center. They call their business “lead generation” and “lead management” but that’s just putting lipstick on a pig – it’s a lead trap. Consumers have been abused by these services for so long, they’re no longer responsive. Funny thing is, the CEO of housevalues.com blames brokers for the trouble by saying brokers aren’t investing in marketing as much. Uh, hello, maybe the data is junk. Most brokers have subscribed to some sort of lead service and the ones I’ve spoken with no longer subscribe because of that very reason – the leads are junk and there’s no value.
The lead trap game has changed dramatically in the past few years. Here’s a few reasons why:

1. Consumers are exposed to over 1100 advertising messages per day.
2. There is more choice than there has ever been.
3. For most people spam has reached unmanageable proportions.
4. Identity theft has caused most people to be wary of anything online especially forms asking for information.
5. Companies broke their promises.
6. Companies didn’t ask permission.

The last point, asking permission, is probably the biggest factor in either growing a business or killing a business like this. housevalues.com will argue that everyone who signed up acknowledged the “terms & conditions” but that’s not permission in my book.

I had a similar experience recently right here in Steamboat Springs. Buyers Resource website (www.servingsteamboat.com) is a lead trap. You get one free search of the MLS then you have to pay. If you want to search again, you have to fill out their form. You have to pay them with your information. So I played along and filled out the form. They offer several opportunities to opt-out of being contacted – the default is their assumption that I want to be contacted. I opted out of all contact.
I got a phone call within 15 minutes of filling out the form.
I thought I said don’t contact me?

I got an email that day.
I thought I said don’t contact me?

I was then locked out of viewing any other broker other than than the one who was assigned to me by the computer round-robin algorithm. They broke their promise. I’m sure they’re great people who got sold a story for a marketing product that is now out of date.

As these channels mature we’ll see some things that once looked like a great idea don’t work anymore. It’s up to us to adjust how we do business to account for changes in the market. Take a clue from the canary in the coal mine, housevalues.com. The lead-trap game is over, the customer is in control and in a world full of infinite choices if you don’t give them what they want and treat them with respect they’ll find someone else who will.