1st Quarter update;
???RealBiz Media Group Shareholders 1st quarter update:
I wanted to put together a note to advise you all of key happenings during our first 90 days of 2015. This quarter saw a number of new advancements with our product lines, a strengthened management team
(with the addition of new CIO/COO AND CTO) and most importantly our technology launches. The company is clearly in transition as we see both accelerated revenues (up 30+% over the first three months last year) and a concerted effort to reduce development and operational costs (down by $65,000 monthly in April). The efforts towards accelerated revenue growth and reduced expenses will show up over the next three months.
To remind everyone our programs concentrate on four different levels being – Enterprise –Brokers – Agents – Home Owner Loyalty Platform.
Enterprise/Broker- While the majority of shareholders tend to focus on the individual agent model it must be said that at present, our greatest growth is occurring in the Enterprise and Broker space. I believe this is largely because the company has put years of work into these key relationships with its virtual tour business so as new products are introduced our clients see us as a “trusted source”. I continue to see the Enterprise and Broker areas (which are the hardest to break into) as being the base from which continuous, steady growth will occur. To bolster our enterprise relationships the company is introducing this quarter a combined platform with ezflix, the Micro Video App, video storage, social media, analytics and desktop print marketing as a single bundled package. Enterprise clients will be able to activate and deactivate capabilities as required. Initial reception has been excellent and we hope to be announcing key new contracts shortly.
Agent and Loyalty Platforms - We began introducing our agent programs at the midway point this past quarter and have had about 45 days to assess them. At the top of our agent list was a number of
????enterprise shows including Century 21, ERA, Better Homes and Gardens and the largest of all - the Keller Williams convention in Orlando in mid-February with approximately 14,000 agents attending. In preparation we created video marketing materials, introduced the ezflix app and several supporting social media and loyalty programs. During the course of the convention our team interacted with several thousand agents that attended the booth and volunteered their information for follow-up contact. Our team has continued to pursue this list of agents and other marketing programs and we have seen an increase in sign-ups lead by ezflix downloads now approaching the 1000 agent mark. While I was somewhat disappointed with the slowness of agent sign ups from the show – I am also reminded that the key real estate season doesn’t begin until May so agent sign-ups are closer to a beginning than the end. Furthermore, using agents sign-ups as the sole metrics of measuring success from these shows in my estimation would be a mistake. There were two very big positives that came out of the show being: Several new contracts are under discussion including the Keller Williams Farm and Ranch and the company engaged with significant number of agents and received key feedback on our products.
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?1. Keller Williams chose us to become the driving force behind their newest division – Farm
?and Ranch. This is a key opportunity as it not only strengthens the relationship but allows us to add roughly 430,000 new listings from rural and cottage country resulting in our data base going over two million by the end of this month. We expect this to be a great growth area for the company
2. We used the show as a key opportunity to discuss with agents the existing platforms including the must haves, likes and resistance levels. The feedback received was very valuable and our technology team sprang into action to address issues. At the top of the agent list was concerns of our pricing. Agents did not view our product as $150 per month but surprisingly as
?an $1800 commitment. Furthermore, many agents liked what the products did but were concerned as to the learning curve/work needed to build their own brand via social media marketing.
?For us the message was clear – agents want
????Leads
???Listings ???Loyalty programs
???.... in a format that can use with minimal effort and expense! Leads
In recent years, with the advent of companies like Zillow/Trulia and others agents have grown accustom to paying for leads. While agents see these companies as prospering from their efforts to obtain home listings – the reality is these companies attract millions of visitors and their main revenue model is to capture names from those visitors and sell them to agents. Sadly most agents do not have the technical capabilities to compete so they resort to paying the fees to buy leads. Costing structures for leads range from $1500 per month for Tiger Leads (by Realtor.com) to upwards of $8000 per month for Zillow. With the recent merger of Zillow and Trulia the company announced it would raise its rates by as much as
???400%.
Unfortunately for agents most generated leads are shared with up to four other agents in their area and only 3% of all such leads result in sales. In spite of this – the purchase of leads by agents has been the path of least resistance until now – however, with the recent announcement of rate hikes by Zillow – this may not continue to be the case. Either way, it is a great backdrop for the introduction of our new lead generation product.
Up until this month, RealBiz has had no means of lead generation for agents outside of them employing ReachFactor/Nestbuilder social media platforms. Our products were designed to allow agents to create their own brand and generate their own leads – thus our motto “your listings your leads”. The key drawback we discovered from agents is while our platforms give agents the tools to market themselves with the payoff being their leads – most agents find technology challenging and/or they simply see marketing themselves socially as a low priority. The message became clear from the trade shows that we either had to spend a lot more money in educating agents or make changes to our model.
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I am pleased to announce our internal tech team will be rolling out a whole new product line up called
?Power Agent that includes a bundled package with CRM (Customer Relationship Management), Automated Social Media and Video Marketing, Ezflix Video and the Home & Away Club Loyalty bundle in the next 10 days starting at $39 per month. There will also be a menu bar that will allow agents to add and delete new product offerings as needed – thus eliminating the agents concern that they are paying for things they aren’t using. Our new COO – Alex Aliksanyan has been the driving force behind this product and is going on record to predict 3,000 sign ups this quarter.
In addition, the company has been working on a program called “Power Listing”. For the first time, agents will be able to pick listings and promote them for as little as $200. In testing on multiple priced homes across the country, we have seen results ranging from 8 to 25 “exclusive leads” being delivered over a
?seven day period. While the product is new, the initial results are very encouraging and suggest a huge bargain relative to costing by other lead generation programs.
?????We believe we are now able to give agents easy to use programs AND a viable alternative for Leads if they don’t want to do the work themselves - so check the box!
??Listings
If you have been following the news you may have seen that Move/Realtor.com cancelled Zillow and Trulia’s listing feeds effective Tuesday April 7, 2015. For the last months Zillow has been in an all-out push to cut deals trying to sign on as many of the top 150 MLS’s (Multiple Listing Services) around the country as a means of replacing home listings they are about to lose. Last week Zillow announced that it had signed deals with 79 MLS groups and was now confident that it could continue to deliver home listings on its website at the same level after its key Realtor feed is cut off.
While no one can predict the future – the management of RealBiz has tried to develop its products and relationships in combination with the major industry players, always acting as a support system for agents. To this end we could be described as the “Switzerland” of the industry having key relationship and contract with the NAR/Move/Realtor.com for listing feeds as well as working with agents, large brokers, National Enterprise accounts (Century 21, ERA, Keller Williams), Key Industry Suppliers (ZipLogix, Zillow, Harmon Homes and 22 separate MLS Groups) resulting in a broad and diversified home listing coverage.
??????All of these relationships result in the company accessing and processing video on roughly three million home listings – so check the box!
??Loyalty
A recent article in Inman News highlighted the fact that over 85% of homeowners found their agent experience valuable and would use the same agent again when purchasing a house – IF THEY COULD REMEMBER THEM!
In real estate the average buy/sell cycle is about eight years so most agents loyalty program consists of a thank you gift (usually calendar or flowers) and move on. We have continued to work on loyalty programs and am proud to say we are the first in the industry to introduce two key loyalty programs – the Nestbuilder App and the Home & Away Club.
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?The Nestbuilder App can be promoted to the consumer by the agent and has an area to fill the agent’s information. As a result, when the consumer searches for homes in the future any queries are directed back to the agent that introduces them. In essence, it is a personalized App with millions of nationwide listings.
Secondly, the company also introduced the Home & Away Club loyalty platform. This platform is like a Costco model where products are sold at cost and money is made through the membership fees. RealBiz has modified this program to include points that are awarded to agents for desired actions (i.e. completing proper profiles, marketing themselves, utilizing company products etc.) which can be converted to rewards dollars. The agent can both spend the dollars on themselves and/or award to
?customers. The system allows agents to preset dates and messages for gifting rewards (i.e. Happy Birthday Bill - here is $25 Rewards to enjoy a bottle of wine or whatever.... Best regards – Agent Superstar).
To date, the Home & Away Club includes thousands of Vacation Resorts, hotels, cruises and lifestyle products at wholesale pricing. Additionally, we will be one of the first groups to receive access to nearly one million new home items making it ideally suited for homeowners. The Home & Away Club back end is operated by I.C.E. Gallery which has 55 million members worldwide including American Express, USAA and Sears. Homeowners are invited to try the platform with the gifting of $500 rewards dollars. The rewards dollars allow consumers to buy down pricing from best retail to true wholesale pricing. When the rewards dollars are spent consumers are invited to join and access continuous wholesale pricing with a customized membership tailored to their needs. Memberships range from a $200 to $10,000 per year and Realbiz earns a percentage of each membership sold.
While our initial introduction is being done by the agents who sign up, RealBiz is also expanding its scope to include multiple other target groups for club memberships such as Enterprise Accounts, Brokers, and Real Estate related companies that have direct access to home owners like mortgage companies.
????? Low cost/no cost loyalty platforms - so check the box!
??In closing, I want to reiterate that this is the transition year for Realbiz from building technology to accelerating revenues. In my year end update I noted the concerns about our low stock price and how I felt it was not reflective of internal happenings of our company. I understand that as a public company shareholders use the price as the primary indicator of how we are doing – but unfortunately, in early stage companies like ours – this can sometimes be quite misleading.
We are slowly developing a viable trading market by press releases, partnerships, road shows, interviews and reports. We are trying to time these efforts with new product introductions, increase revenues and company growth that give us a basis for expanding our shareholder base. While our stock would still have to be classified as an “illiquid market” where a few traders can easily control the pricing, the good news is our shareholder base is now expanding and is up from roughly 400 shareholders at year end to nearly 800 shareholders. I continue to believe we will need to be in excess of 3500 shareholders before we start to see consistent daily trading volume and pricing that is more reflective of the company’s accomplishments. While the process takes time - make no mistake – it is underway and our efforts are starting to be recognized. We recently signed an engagement Benchmark as Doug Rogers (who handled our
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account) left Merriman and moved to Benchmark to head their investment banking. Doug asked us to join
?him as the new firm – which is much larger and more capable. I have attached information on Benchmark for your review.
While we all would like to see the efforts translating into higher stock prices, I continue to believe the company events will begin to become more closely aligned as new shareholders are attracted to our story. I wanted you to know that your management team is working diligently and under the guidance of our new COO/CIO - Alex, many of our tech staff has given up their weekend during this last month to meet the launch of this new bundle in time for the kickoff of the real estate season.
We are always mindful that the opportunity is largely made possible from the efforts and support your
?funding and patience which allow us to create the products that are now coming to market.
I thank you all for your support and look forward to continued growth of our company over the next few quarters.
?Respectfully, Bill Kerby
Disclaimer: This document is for informational purposes only and is not a solicitation to buy or sell the above security.
