A Brief History of CRM & Who Will Survive? – Part 1
Revised – March, 2015
Currently, there are around 35 Real Estate specific CRMs (Customer Relationship Managers) and they are surprisingly unique in many respects. Can the industry support them all? If not, how do you pick one that is most likely to survive? When I originally wrote this in 2012 there were about 40 Real Estate CRMs. There would be about 50 now but about 11 12 13 14 15 have gone out of business and been replaced.
Why is that significant? Moving from one CRM to another is costly in terms of loss of data and the investment of time in a new learning curve. If at all possible, you want to pick the right one the first time.
The very first Real Estate specific CRM was Howard Sanderson’s Howard & Friends in 1982. It has since been reincarnated as Star Contact, and then Agent’s First Choice. During Howard & Friends tenuous tenure, another Real Estate Specific (RES) program came out in 1986 called, interestingly enough, RES – Real Estate Specialist. I started using that one in 1989 and I discovered the true value of CRM by using that one for about 5 years. I worked with a couple named George & Mary Tharpe on that one. Top Producer was released in 1989, followed by Online Agent in 1992 (which was later renamed to Agent Office in 2002 considering it was not an online CRM). Agent Office has also been ‘branded’ by various franchises over the years as ‘RE/MAX Agent 2000’, ‘Century 21 Power Pack’, and Realty Executives’ ‘Executive Agent’.
George Tharpe once related a very enlightening story to me about Top Producer. At the time we thought it was funny but in retrospect it may well be the reason Top Producer soon became the 800 pound gorilla in the industry. In those days one of the very best ways to get the word out on a product was at conventions and trade shows. George told me he used to see the original developer/owner of the then fledgling Top Producer sleeping in his car at the shows. His name escapes me. The reason? To spend the money he saved on marketing. He later sold it to what is now Homes.com which owns both Realtor.com and Top Producer. And now Homes.com is owned by News Corp.
Howard & Friends was a much loved product and many still speak of it fondly. It was extremely user friendly but it was a bit too cutesy for me. I was coming from a computer operations background and having little wizards pop up to tell me to wait for Blinky to gather my contacts was a little silly to me. I preferred Real Estate Specialist. It was incredibly versatile and a shame it didn’t survive. Both of them were DOS applications! Howard & Friends took too long to make the transition to Windows and Real Estate Specialist never did and went out of business. They were both such small companies that they couldn’t afford to do some of the things necessary to remain competitive. Imagine how small the market for CRM was (everyone called them Contact Managers then) at that time and how difficult it was to get the word out pre-Internet. They also lacked marketing funds and expertise. While Top Producer started gaining ground, Howard & Friends and Real Estate Specialist couldn’t keep up. Top Producer has always been aggressive in their marketing and has retained the number one market share for single agents and small teams to this day (my guess). Note that there are now a couple CRMs claiming to be number one. Given that there are no independent statistics to tell us how many users all of these CRMs have, that can not be known and those claims are suspect at best. Some of the vendors have shared their numbers with me but in confidence. It does give me some insight into who is going gangbusters and who is not though. Top Producer then became the CRM of choice for Century 21 and that, as they say, is history. Agent Office was released in 1992 and RE/MAX very quickly promoted them as their CRM of choice. Agent Office was then promoted on the RE/MAX Satellite Network featuring Jim Casey doing training videos. Thousands of agents around the country were exposed to it as a result and Agent Office took off, maintaining the number two market share for many years.
From 1992 through approximately 2005, the only Real Estate CRMs of which the vast majority of agents were aware were Top Producer and Agent Office. Both were good programs, but there was certainly room for improvement.
By 2008 there were so many CRMs that I couldn’t keep track of which one did what so I created a Matrix. It compared 30 Real Estate specific CRMs across 350 features. In the process of building it I spent three to five hours with the CEO’s and developers of every one of them except Top Producer and Agent Office. Those I already knew. I have kept in touch with many of the owners since then, some more than others. To build this site I went back and visited with them all again to make sure I had accurate information for their pages here.
Most Real Estate specific CRMs currently available were released after 2006. One of the things I learned from them was that most were developed by people with a software background who became real estate agents. As agents they looked for a CRM but all they could find was Top Producer and Agent Office. Coming from a software background those CRMs were not cutting it for them. Deciding they could do better they left Real Estate sales on a mission to build a better CRM. In 2006, these entrepreneurs would have seen a market of Real Estate licensees comprised of 2.63 million according to ARELLO. If that was the only number they looked at, it was reasonable to project that there was room in the market to compete with Top Producer and Agent Office.
But there were two factors that could not have been foreseen.
One was that the number of agents was about to drop by 20 percent. Today the numbers are going back up. There are approximately 2.2 million licensees. 1.2 are Realtors®. which theoretically are the only ones actually making a living selling real estate. Of those, only about half did any transactions at all. Of those remaining, many did six or less transactions per year. Now ask yourself how many of your associates use a CRM. Apply that percentage to about 500,000 agents. For a software product that sells for on average about $35/mo., that’s not a very big market.
But what about factor number two? What none of those developers could have known is that they were one of many working on the “new best CRM”, all at essentially the same time.
There were a few CRMs here and there that were being released over the years, such as Advantage Xi in 2002, but 2005 was when the pace started to pick up. About six were released between 2005 and 2007 including Agent360, Agent’s 1stChoice, Busy Agent Pro, and Realty Ware. In 2008 though, the flood gates burst wide open. About 15 new CRMs came out that year! Among them were: Address Two, Agent Business Builder, CRM Real Estate, Easy Broker, Market Leader, Masterdigm, More Solds, My Real Estate Tools, Net Aspects, Plan Plus Online for Real Estate, Realty Promoter, Prospects, Sharper Agent, and Simple Remote. In the last four years, 11 12 13 14 have gone out of business, including 360 Agent, Agent 360, (yes, they are two different CRMs), Agent Business Builder, Agent Manager Solutions, Agent’s 1st Choice/Howard & Friends, Bizkinetic, Busy Agent Pro, Eurekaware, RealeSeller Real Estate Specialist, Real Time 2020, Respond, Simple Remote, and Symplifi. I think another one is about to go down as well, and it is a relatively well known one. I have to confirm it before I can write about it. But more CRMs just keep coming. Since 2008 you can add IXACT Contact, Real Estate Client Management, Realvolve, Agentdesks, eOmni, Bizkinetic, Leading Agent, Propertybase, RealeFlow, RealtiVA, Real Estate Digital, MoxiWorks, MyTheo, Homekeepr, and BrokerMint. And there are others I haven’t gotten to yet.
It is significant to note that also in 2008, Emphasys Software bought Agent Office from FNRES. The last upgrade to Agent Office had come in 2007 to make it Vista compatible. When Emphasys bought it, they maintained with me that they were going to continue to upgrade it, but eventually opted not to do so. My assumption is that they felt it was a better idea to create a new CRM than to re-write the old one converting it to a better/newer software language. Several years ago, my contacts at FNRES had told me that was what really needed to happen for Agent Office to progress. So after 20+ years, the Agent Office that many of us came to know and love will eventually be phased out. Emphasys Software has now created a completely new and different product that is an Outlook add-on and they are calling it Agent Office Personal Edition. It bears no resemblance to Agent Office other than its name. Given that four of six Real Estate specific Outlook add-ons have gone out of business, the writing is on the wall for Personal Edition. Emphaysys’ decision to abandon the Agent Office, with the second biggest user base in the industry and not re-write it is the most questionable decision I have seen in this industry to date.
There are now about 40 Real Estate CRM products competing for a probable maximum of 4-500,000 users. My best guess is that the top four or five CRMs, of which Top Producer, IXACT Contact, and WiseAgent are three, comprise a user base of at the very least 100,000. That leaves 3-400,000 for the other 40 CRMs. There have been 11 failures in the last four years and I would expect a good number more in the next few years.
A Brief History of CRM and Who Will Survive – Part 2
If you have any historical information that is relevant to this article, please by all means let me know and I will add you as a contributor. So far this is all my memories and research on the topic which is why no one is listed.