Whether to have a closed or open database is one of the questions we are asked about a lot. There are no simple answers, and that usually means it’s not the right question. How you architect the data policy and management in your real estate business requires you to take a more holistic approach and is largely cultural. It’s about making a choice about how you want to work, and then creating a data structure to support that.

At AIRE, we have the unique vantage of working deeply with the data sets of agencies and monitoring the successes and challenges of real estate businesses of all different sizes across Australia and New Zealand. Here are our findings in relation to what works and what doesn’t.

But first, we need to make sure we are all talking about the same things:

WHAT IS AN OPEN DATABASE?

An OPEN database means that the contact data is open and shared between different users in the system. In an OPEN database, there should be no duplication. This is because the philosophy of open data is that there is one shared relationship (between multiple agents) with the one contact. If you like, the unit of ‘data’ in an OPEN database is the CONTACT.

WHAT IS A CLOSED DATABASE?

A CLOSED database means that the contact is not shared and that each individual user of the database has a silo-ed set (or a mini-database) within the larger database. In a CLOSED database, the ‘unit of data’ is actually the RELATIONSHIP. A single contact can have multiple relationships with multiple people in the same business. In the real world this occurs when someone has bought a home off one agent, might own an investment property in another agent’s ‘farm’; and perhaps has a relationship with a BDM relating to the second property also. Potentially, there are 3 unique relationships, and 3 duplications of the contact, reflecting those unique relationships. 

CONTACT OWNERSHIP IN OPEN AND CLOSED DATABASES:

This is not a discussion about who ‘owns’ data. If you want advice about that, you should check your employment agreement and talk to a lawyer. For what it is worth, the philosophy that I subscribe to is that the CUSTOMER owns their data and will unsubscribe or appoint an agent or agency based on their relationship and the relevance and value they find in that relationship.

Contact ‘ownership’ (cf. data ownership) is a position of accountability for the relationship – and there are two types of relationships in a real estate business: Agent-led relationships; and AGENCY-led relationships. 

AGENT-LED RELATIONSHIPS

There must be clarity around which relationships an agent will be responsible for, and this is true whether you go with an OPEN or CLOSED data structure.

In a CLOSED database, there is usually very clear accountability. Agents who are contact owners in a CRM are responsible for the relationships and listings that result from the contacts that they own. Contact owners have a responsibility to maintain the relationship and ensure that any property listing is with the agent. Where multiple agents own duplicated contacts (and have very different relationships,) the VENDOR will make a choice on the strength of the relationship and there should be guidelines in the office to determine the rules around who and how listings are shared when a vendor chooses a brand relationship, over an individual agent; co-listing and commission split rules.

In an OPEN database, things are a little more muddied, in terms of accountability – and it comes down to assigning responsibility for the relationship, via rules about who owns a contact. 

If there is community ownership (“no one owns a contact”,) and “everyone” is responsible for the relationship; the upshot is invariably that “no one” is responsible for the relationship – and there is no accountability or visibility over relationship nurture activities. 

Without a sense of “ownership”, it is difficult to try to get an agent to ‘invest’ their energy or money into managing a relationship. Relationships with personal management accountabilities are managed with a frequency and intimacy that is appropriate. No one wants to receive an email newsletter from their spouse with an ‘update’; so think about the types of content and channels that are appropriate for the relationship.

An OPEN database doesn’t imply community ownership of data, it implies a single source of truth for all of the relationships within a business to be curated into the same contact. Each CRM system will have different options for how much visibility each user has over the status and notes of the other user’s relationships with a particular contact and how and who has the ultimate responsibility for that VENDOR’s decision to list with the agency must be clear for an OPEN database to function, with requisite accountability engineered into the data structure.

AGENCY-LED RELATIONSHIPS

In either a CLOSED or OPEN structure, there must be clarity over which data is NOT under the personal management of agents, and these largely fall into two categories: Ghosts and Orphans.

Orphans are the contacts who are not ‘owned’ by an agent. It could be that they are not complete data records, they could be ‘buyers’ that are not assigned to personal management, it could be owners from a geographical area that no current agent is working as a ‘farm’. Orphan data tends to be of lower quality and is best managed by a broad marketing approach; here is where your top of the funnel content (email blasts) has a time to shine – generating inbound opportunities and brining those contacts under the personal relationship management of an agent.

These ‘orphans’ should be assigned to an office user, which we can call ‘THE ORPHANAGE”. The idea is that for any agents who join, who don’t have enough opportunity, or when you seek to recruit or bring on a developing agent – The Orphanage sits as a pot of gold that can be mined and those contacts ‘adopted’ out by agents for personal management; converting them to higher quality relationships (that also yield a higher quality return).

Ghosts are users (agents) who used to be here but aren’t here anymore and who are still hanging around in the CRM. So long as the ghosts still have contacts assigned to them, they are locking up that opportunity from current users. If there is an active agent who has the capacity to take on responsibility for all of those contacts and be accountable for it, then these should be reassigned to that agent and the ‘Ghost’ archived. As these contacts were previously under personal management, it makes sense to try to have succession so that customers have the same type of relationship. If there is no one to pass the baton to, however, these contacts could be placed in The Orphanage for safekeeping, until they can be placed into the care of an agent again.

DESIGNING AND MANAGING A DATABASE

This is a tough job, no doubt. Professional database administrators, who do this, expect executive salaries and they have to have strong analytical skills, be expert users of the CRM system and have a high level of subject matter knowledge about real estate and your individual marketplace. It is also a very good job for a robot.

Data hygiene and analytics, one of RITA’s many artificial intelligence capabilities, can help business owners take control of their data with insights and recommendations that are unable to be matched by human labour, and for a fraction of the cost. 

If you would like to explore these insights and how RITA can help, you can make a time to meet RITA with one of our data experts, here: https://www.getaire.com.au/say-hello/