I am often asked as part of an engagement, “How is my MLS measuring up to others?” While there might be some use to such an effort if one is worried that one is not keeping up and staying competitive on services and price, I think the question also needs to be asked, “Is staying competitive enough?”
I think we can agree that MLSs – both organizationally and their technology offerings – are going to undergo some major shifts in the years ahead. When an MLS looks back or around to see how close the competition is, it’s not necessarily looking forward to those shifts. Is an MLS well served by looking around, seeing that it is the largest in their market, ahead on features, and comparable or ahead on cost and being complacent about its position in the future? We’ve all seen competitive analysis designed to prove what the creators believe – that they have the best offering. Those are useful as marketing documents but no so much as planning documents. And is an MLS well served by seeing it is behind and working just hard enough to catch up? It doesn’t matter where the competition is today – what’s important is where we all need to go tomorrow. Let others move at whatever speed they want – including standing still. That should not have too much of an effect on your own MLS’s plans. I’ll create a competitive analysis – but if my client has an interest I’ll put future-looking context around it, because I don’t want the analysis to be misused in the ways described above.
We’re a big fish and our competitive analysis shows us to be in great shape…
A competitive analysis makes most sense when evaluating an existing market, especially where it is easy for customers to choose among competitors. One might think that we’re in such a market now – at least in some markets where MLSs have engaged in data shares and there is “MLS of choice” – MLSs competing of products, service, and price. In that type of market, MLSs can have some short term wins by developing a competitive strategy for winning a segment of the customer market, and competitive analysis can be an important component of that strategy.
But, again, I posit that the MLS industry is going to undergo some major shifts in coming years. Many people believe that we’ll have 200, 120, 60, or maybe even one MLS rather than close to 900. Maybe there will still be 900 MLSs, but many will just be ‘service centers’ for larger regional MLSs. In any case, the MLS market is likely to re-segment and the type of competitive analysis that works in an existing market may not work as well when planning for the next few years. Venture capitalist Steve Blank differentiates between competitive analysis in existing markets versus re-segmented markets. He says, “In a re-segmented market, a competitive analysis starts with the hypothesis of “Here’s the problem we are solving for customers.”” I agree strongly with this, and I know there are others in our industry who are quickly moving to that way of thinking.
I believe that the MLSs of the future will not be those MLSs that stare at each other across historic borders, matching each others’ moves to ensure a few subscribers don’t defect – but rather those that act boldly to create the organizations and offerings of the future.
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