SmartZip says it can predict which houses are most likely to sell, anywhere in the United States with pinpoint accuracy. It’s a cool idea. But does it work?
SmartZip, a 100-person Intel Capital-backed company in Pleasanton, CA, aggregates and analyzes data from more than 40 sources so it can predict which houses will sell first across the United States.
The data comes from public records in more than 3,000 counties in the United States (assessor offices, county recorders and county land offices), mortgage data and consumer information sites. Most is publicly available.
This data is then augmented and associated with the same daily listing feeds that power national portals like Zillow and Trulia. SmartZip effectively covers 95 million homes, or about 90 percent of the housing market.
The company combines and combs through the data to associate specific housing attributes (bedrooms, baths, building area, etc.), financing (mortgage and consumer credit) along with demographic data (age of homeowner, income, employment) to reveal which houses are most likely to sell.
SmartZip • predictive marketing • annual subscription • starting at $5,000
“Our goal is to be the most accurate predictive marketer in the business,” explains Avi Gupta, CEO of SmartZip. According to its own benchmarks, the company is delivering. Gupta says they company’s algorithm consistently unearths homes that are at least twice as likely to sell.
SmartZip’s theory is that in any farm or territory, 30-50 percent of the sales will come from the top 20 percent of homeowners who have been identified as most likely to sell based on its algorithm. The company helps agents target that top 20 percent through a variety of marketing programs, including direct mail and online display advertising.
“We want to help agents focus on the 20 percent who matter,” Gupta says. His pitch sounds simple: Why not spend your precious marketing dollars only on homes that are most likely to sell? And that’s the rub.
Expensive, Yes. Effective? Possibly.
SmartZip’s algorithm is only as good as the data that feeds it. So when the underlying data is incorrect or incomplete, SmartZip’s predictions can be inaccurate. And since the company also pulls in property data from public records and syndicated feeds, the most common complaint from agents is that when they send postcards through the service, is that they’re returned because of incorrect information.
Yet the real issue with SmartZip isn’t the algorithm, analytics or listing accuracy, which seem to be right the majority of the time. It’s the surprising cost and long term subscription that give many agents pause.
SmartZip requires agents to take out a one-year subscription, which typically begins at $5,000 for territory of about 2,000 homes, and can quickly approach $10,000 per year or more for more expensive territories and service packages.
SmartZip bases its pricing on a combination of factors, including the median home price, number of homes in the territory you want to market to, and the amount of additional services that you buy from the company. Those services include direct marketing, online retargeting of ads and other online marketing efforts that are exclusive to SmartZip.
It’s safe to say SmartZip is a relatively high-ticket marketing expense for many agents. And there are other ways to get similar information to target your mailings. Rebogateway, by Benutech, costs just $30 per month, per county, for data on homes that have been affected by life events like divorce or notice of default.
While Rebogateway isn’t yet national, and doesn’t offer all of the nifty marketing tools that SmartZip does, it’s a cost-effective alternative for those in a more do-it-yourself mindset.
Yet Gupta says that the real difference between SmartZip and other data analysis companies is that his algorithm is predictive — something he says other data companies can’t match.
“We’re just more accurate, on the whole,” Gupta says. “We help agents look into the future. And we offer agents the chance to use big data to ferret out consumer intent, just like the big guys.”
He’s quick to point out that SmartZip powers the analytics, comparative market analyses and automated home valuations for many of the top websites in real estate, and garners some 60 million impressions daily. From Realtor.com, Homes.com, Homesnap to Zip Realty, SmartZip is behind the scenes on more sites than you might expect.
Complete Suite of Tools
Once you sign up for SmartZip, you’ll select your exclusive territory based on SmartZip’s 56,000 neighborhoods. An account manager will help you set up your account and select your service package.
SmartZip’s “neighborhoods” are actually internal “clusters” of homes that the company defines so that they can map the algorithm’s analytics at a granular level.
Once you’ve claimed your turf, you can choose from a variety of marketing tools to reach the top 20 percent of likely sellers. Since SmartZip is a turnkey marketing solution, your account manager will help you create all of your marketing materials that will be used on the platform, from banner ads to mailers to CMA pages.
Smart Home Price Campaign
SmartZip’s most unique offering is the “Smart Home Price” program, which enables agents to offer an online, trackable CMA to homeowners.
The program begins by sending a personalized postcard to the homeowner. Each postcard contains an individual “keycode,” which unlocks the CMA for the homeowner if he enters it on a landing page.
All Smart Home Price landing pages are subdomains of smarthomeprice.com, so that your branding can be included in the URL. Thus, the URL for your campaign would be abcrealty.smarthomeprice.com. You can add up to five of your own pictures to the page to customize it. An overlay window in the lower right corner of the landing page presents the agent’s contact details.
If the homeowner enters the keycode, he is able to instantly review the information SmartZip’s algorithm has put together about his property — everything but the price of the property. He can change details (bedrooms, baths, square footage, lot size or year built).
When the homeowner presses submit, a thank you page appears that reinforces the value of the forthcoming comparative market analysis. The page also asks for the homeowner’s contact information, so that the agent can follow-up.
Once the homeowner submits the form, it’s conveyed to the agent’s SmartZip dashboard and the agent receives an email notification that a new lead has been acquired.
The homeowner gets an agent-branded email is sent to the homeowner with a link to the online CMA.
If the homeowner chooses to review the CMA, he can adjust it, or ask for the agent to call. Every time the homeowner visits the CMA, the agent is notified of new activity.
If the homeowner does adjust the value of the home, this information is used to update SmartZip’s algorithm, and the new pricing is furnished to all websites where SmartZip powers online home valuations.
Targeted Online Ads
If a consumer in your territory visits a Smart Home Price landing page, SmartZip can run a targeted online ad program that will follow them after they leave.
What does that mean?
SmartZip makes it easy to leverage this technology by providing templates for your display ad, and you pay based on the number of impressions you want to get.
When a consumer clicks on the ad, they’re taken to your custom SmartZip URL, if you have one. Otherwise, they’re dropped off at SmartHomePrice.com. In either case, you receive an email when a homeowner has logged on and entered a home address, phone number or email.
Traditional Direct Mail
Other options to make the most of SmartZip’s data include turnkey traditional direct mail programs. You can select from a variety of graphic templates and with a few clicks and a credit card, send a traditional farm card (just listed or just sold, complete with your pictures and branding). These cards are intended to drive traffic to landing pages, where consumers can enter their contact details to request more information.
You can also use SmartZip to send “handwritten” notes to prospects. Robotic arms use ballpoint pens to “write” and sign the letter, which lends the appearance of personalization.
What makes SmartZip appealing, above and beyond the data itself, is the built-in analytics and easy to read dashboard.
At a glance, you can see how many mailers you’ve sent along with the number of unique respondents, predicted listings and predicted sales. You can also review your mailer schedules and online ad performance.
New and active responses from homeowners are highlighted on the dashboard’s home screen. You can add or remove homeowners from your “smart target” list, or rate them. Or you can create a branded home report for a particular prospect and email it in two clicks, complete with a cover letter and nice-looking charts and graphs.
A surprising amount of detail about the prospect’s property is included in each client record, from a SmartZip home valuation and latest transactions to the property’s loan information. Whatever can be pulled in from the public records is right there for review, along with the contact’s activity and history.
SmartZip’s data can be overwritten if you want to enter new details, or if the property owner himself has updated his property information on SmartHomePrice.com.
All of your prospects’ information can be downloaded into a comma separated file, so you can easily synch it back to your CRM.
On the face of it, SmartZip is an expensive and comprehensive service you can use to develop a farm. It takes time, effort and money, but if you’re willing to invest and commit SmartZip could potentially deliver a steady flow of new seller leads.
Yes, there are plenty of agent complaints about inaccurate information coming out of the system, particularly with respect to direct mail. It’s clear that if the public property records or syndicated feeds are incorrect coming into SmartZip, what comes out will be bad data and wasted effort.
Yet I can’t believe that the preponderance of data on the SmartZip platform is bad. If that were the case, how could SmartZip have more than a 1,000 agent clients, and simultaneously power the online valuations of sites like Realtor.com and Auction.com?
That’s why I believe that the complaints I’ve heard about SmartZip have as much to do with cost as the data itself.
After all, if you get a few returned postcards from a farm mailing you did to a title company’s free list, you chalk it up to the cost of doing business. But when you’re paying for accurate data and seriously targeted marketing, your expectations are naturally going to be set to a higher bar.
Consider this, however. Even if you’re farming to lists that you got for free from the title company, it’s still expensive to farm. There’s the cost of design and production, not to mention postage. And you’re not necessarily marketing to people with a propensity to sell. You’re just keeping your brand out there — and unless you’ve connected it to a lead capture system, this is also called spraying and praying.
In the end, it seems to me that farming is a long, hard business that demands serious, long-term commitment. In a way, I can understand why SmartZip’s term is a minimum of a year. It takes repeated and consistent “touches” to reach consumers these days. One or two mailings, sent months or years apart, just won’t cut it.
That’s why I think SmartZip is for agents who are willing to invest for the long-term, and who inherently understand that not every mailing or campaign will knock it out of the park. Marketing effectiveness is a cumulative business. Everything is additive. SmartZip plays to the long game.
You’ll also need to embrace and use a selection of SmartZip’s marketing tools to achieve a good return on your investment. That means you’ll need to send enough postcards and use their online ads to actually drive traffic and create leads.
Quite honestly, there are other factors that could work against SmartZip that have nothing to do with the technology. If you’re not willing and able to hop on every lead that a SmartZip campaign generates immediately, the platform is not for you. Speed of response is paramount. When you get a lead, you can’t ignore it.
So should you sign up? I think you need to ask yourself some hard questions about your commitment to farming. Are you really willing to work outside of your immediate sphere to build your business? If so, SmartZip could help you build a pipeline of sellers, which is notoriously difficult to do.
“Finding people who are ready to sell is a tough problem,” Gupta explains. “Most other tools for agents focus on buyers, but we’re focused on a harder problem. What we think is that if you can touch the right prospects at least five times, instead of once, you’ll be that much more effective.”