How a Franchise Giant Uses AI to Predict the Future
Coldwell Banker’s CEO Charlie Young shares how the brand is using artificial intelligence to empower prospecting.
September 5, 2019
Artificial intelligence is being called a disruptor as AI tools enter the real estate industry to allow brokers and agents to automate more business tasks, prospect in new ways, and better anticipate clients’ needs. Real estate companies both large and small are experimenting with AI—and some are betting big that this technology will be a game changer. Coldwell Banker is one such firm that is using AI tools for data analytics and even in responding to housing shortages.
REALTOR® Magazine caught up with Charlie Young, president and CEO of Coldwell Banker Real Estate, to learn how the franchising giant is using AI in new ways to improve business processes and outreach.
Q. AI is a growing buzzword. How is Coldwell Banker using artificial intelligence tools?
YOUNG: AI may be a growing buzzword, but Coldwell Banker has been creating AI solutions for years. We’ve been putting big data and predictive analytics to work for our brokers, agents, and consumers since 2015 in the form of the proprietary “CBx Technology Suite,” which includes platforms for identifying seller leads before they even reach out to an agent, locating where the buyers are likely to come from, and creating interactive listing presentations. For agents to effectively use big data, we must use technology to address pain points. I believe that technology will empower agents, and that the right tech has the power to improve the entire transaction process for consumers as well.
Q. What benefits does AI bring? How do you think it will evolve in the real estate space?
YOUNG: One area in which AI brings real solutions to our agents is through helping to solve low inventory. We designed CBx Seller Leads to help with this issue. Using multiple sources of publicly available consumer information, proprietary algorithms, and sophisticated AI and machine learning, the platform identifies households that are likely to sell before they even reach out to an agent. Coldwell Banker created this tool to help agents get to sellers first and reach out with personalized marketing (for example, starting to nurture those leads with newsletters, postcards, or other outreach). One year after launch, the tool has seen a 74% adoption rate and 6% conversion rate, which means our network is seeing the advantages this tool provides.
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Q. Predictive analytics has made more data available to brokerages than ever. In what other ways is Coldwell Banker leveraging big data and analytics?
YOUNG: The CBx Listing Experience is an AI-powered tool that allows agents to craft compelling, data-driven listing presentations. It turns big data into actionable marketing insights, combining sophisticated pricing capabilities with interactive designs to create a unique experience for sellers. CBx Buyer Locator uses big data and predictive analytics to identify where buyers are likely to come from and how agents can reach them, helping agents create efficient and effective marketing plans.
Q. There’s all this information out there that real estate pros can use to predict clients’ behaviors. A recent New York Times article shared how a woman whose husband died was instantly bombarded by messages from real estate agents to sell her home because the data showed she had a likelihood of selling. How do you navigate that line of using technology to pinpoint leads without offending or overstepping?
YOUNG: This story is an example of why it’s so important that agents use their discretion when pursuing leads. Some of our competitors have solutions that fully automate outreach to prospective clients. This is a miss because it can result in scenarios like the one you outlined. We advocate for a mix of tech and personal connection to ensure that agents are best serving their current and prospective clients.
Coldwell Banker’s AI Tech
Seller Leads: This tool uses predictive analytics to identify households with the greatest likelihood to sell before the homeowner even shows any interest. It uses previous sales and demographic information that offers clues—such as a new job or new baby—to generate listing leads that agents can then target with their marketing.
Buyer Locator: This program culls big data to identify ZIP codes where a potential buyer for a home is likely to come from, which agents can then use to target with online ads.
Listing Experience: Agents can use this tool to turn big data into actionable marketing insights. It also includes an interactive pricing component that allows the seller to give input regarding upgrades and special features of the home. Sellers then feel part of the process in determining a price for the home, while the agent can show how different home features can impact the pricing through various assessment tools and interactive charts. The program also offers marketplace analysis charts, all shown through animated slides that can be presented to help clients better understand the current market.
Q. In situations where AI can automate tasks—like reaching out to clients on your behalf—do agents have to fear their value being replaced?
YOUNG: It’s not a threat because our agents are finding the best ways to win listings and close deals through a combination of tech and personal connection. CBx Seller Leads, for instance, sources leads for an agent, but the agent still needs to do work to close the lead. Tried-and-true methods are often the most effective: making phone calls, sending personal notes, and offering to meet potential sellers in person. When you’re buying or selling a home, you want a real person—someone you trust—guiding you, not just an app. An agent armed with data-driven insights and AI-powered intel is the ideal guide for someone buying or selling a home.
For example, we have an agent in upstate New York who was competing with an agent from another firm for a listing. The other agent said the buyer would likely come from New York City but had no data to back it up. Our agent plugged the address into CBx Buyer Locator and was able to show the seller real data, in an easy-to-understand format, that predicted from other sales in the area where the buyer would likely come from within a few miles of the property. Data here bolstered our agent’s expertise and helped her win the listing.
Q. Real estate is being disrupted by so many technologies. Which do you feel could have the biggest impact?
YOUNG: Tech that solves real problems faced by agents, brokers, and consumers will have the biggest impact. Gimmicky tech will fade away, but tech solutions that shorten the time from offer to close, save agents time, or help agents identify prospective sellers and buyers will have a lasting impact.
Q. More real estate companies are branding themselves as tech companies. Is that the future of the real estate business model—more tech centered on serving clients than what’s traditionally been more a relationship model?
YOUNG: The companies that succeed in the future will be the ones that leverage technology while never losing sight of the importance of relationships. We have some of the best tech in the business—tech that is designed to serve the real estate transaction and all involved parties: agents, brokers, and consumers. I always remind my team that Coldwell Banker is a real estate company, always has been and always will be.