Non-Price Competition is an economic term explaining the advantage created when two identical products are differentiated by a free benefit.
Win the listing, win that new client with Non Price Competition.
In real estate, non-price competition exists when certain services and added benefits are offered to differentiate one agent from another without reducing their commission rates. Here are a few examples:
- The Presentation: Some agents may offer extensive marketing packages that include professional photography, virtual tours, drone footage, and staging services. But the battle for that business may be won with naming(nearby listings, accomplishments, past success, competency; a display of competency, explaining the success of your agency; your dress, your demeaner, when you stand out you attract more potential buyers and sellers. I had an agent who always wore the NAR pin, as an example. He would tell the story of NAR and its Code of Ethics. These are non-price items that others may not include in the competition..
- Expertise and Specialization: Agents who specialize in certain types of properties (e.g., luxury homes, commercial real estate, waterfront properties) can attract clients who specifically seek their expertise.
- Networking and Connections: Agents who have strong networks and connections within the community or industry can provide valuable opportunities for clients, such as off-market listings or potential buyers.
- Client Support and Communication: Providing excellent customer service, regular updates, and being responsive to client needs can greatly enhance the client-agent relationship.
- Negotiation Skills: Agents who are known for their strong negotiation skills can secure better deals for their clients, whether they are buying or selling.
- Technology and Innovation: Using cutting-edge technology or innovative tools to streamline the buying or selling process can differentiate an agent or agency in a competitive market.
- Likeability: An underrated facet of human nature. People like to deal with people they like (and trust)
These examples illustrate how real estate professionals can compete effectively without simply lowering their commission rates, focusing instead on value-added services and expertise that benefit their clients.