Obstacle #1 - Priorities:
There are three key values that can be offered: Price, Speed, and Accuracy. The balance of these provides the main value proposition motivating much of the market, and the client may not have market priorities that fall in line with a premium priced product.
For example, the client may want perfect accuracy and absolutely thorough results, but if they are willing to accept some risk on that point, then they will likely prioritize price and speed above accuracy. Further, if the client's client chooses based upon speed or price, a slow service or more costly searches will jeopardize their ability to sell their product. Considering these factors, the client must prioritize the risks and determine if the extra cost of a premium search is worth it.
The market seems to have largely chosen this path. Time will reveal if this is short-sighted, but in the meantime, it appears to be the reality. The bottom line is that if you are providing services in a county that can be done entirely online, you are in a market that can be undercut by cheaper labor.
Obstacle #2 - Messaging:
With that said, if you look at how various services are being sold to clients, you can see that accuracy and reliability still rate very highly. This fact is revealed by examining the messaging of those offering premium services as well as those using offshore or other low cost labor options. Both offer the same assurances of quality.
Turn times are easily measurable, and prices are transparent. In contrast, quality is (at this time) little more than an unverifiable claim, which is one reason why it is undervalued, even by companies who highly value accuracy. If the discount providers offer the client the same quality and turn times at a much cheaper price, why shouldn't the client prefer such an offering?
The independent specialist would counter that they aren't getting the same product, but from the client's perspective, there is little discernible difference. Both are protected by similar E&O insurance, both have the same experience claims, and both assert the highest accuracy standards. The fact is that the client has no way to tell if the local provider has any better claim to quality than the offshore provider.
Many independent service providers are feeling the pinch as discount providers are dramatically undercutting prices in their markets. In those markets, there are clients who still prefer the personal relationship and thorough reputation of established, local, independent vendors. If that doesn't bring in enough business, finding ways to streamline your business processes may allow you to lower your prices sufficiently to be truly competitive.
For all independent providers, it is important to find ways to highlight the difference between a premium service and discount searches. This can mean delivering your searches in ways that make your client's job easier. It may mean that when you go the extra mile on a search, you can highlight where you have done so. I would be interested in comments from the SOT community on ways which independent providers can offer enhanced services.
Taken as a whole, independent providers make up a sizeable force but is a fiercely independent group that resists organization. In the struggle to maintain a footing in this rapidly changing market, it is tempting to take a dog-eat-dog approach. This will work, and the strong will survive, but independent providers, as a whole, will likely become even less relevant in the process.
A better way is for independent providers to realize that they are actually INTERdependent with one another. The online community provided by SOT is one way to accomplish this, but it is by no means the only way. Professional organizations can also benefit the group as a whole, but maximizing the value of these resources can only be done when the unity of the group is first recognized and understood.
This is really the point of this article. The message that local expertise results in superior results is not making it to the clients. This may be partially due to a lack of marketing and communication from the independent providers, and/or it may be partially due to the fact that the ultimate clients (consumers and lenders) are frequently insulated from the independent provider that is performing the search.
Even where this is understood there is no way to verify or validate genuine expertise, and therein can be found the biggest challenge. Until there is a broadly accepted education and certification process, there is not likely to be any significant traction gained in regards to the one market value that independent providers can best deliver.
Gains can be made in the other two values, and that will be important. However, very few things would positively impact the market for independent providers better than a robust certification program. Such a program would be good for the market as a whole; it would especially benefit consumers, and independent service providers would have the means to communicate the difference between a discount provider and one with genuine local expertise.
What can be done?
- Recognize that you are part of a large group of providers that can significantly impact the market, if there is unity.
- Participate in SOT and other social media venues (Linkdin has several communities as well)
- Contribute to best practices discussions, in particular, and strive to educate your clients as to why commodity searches are inferior.
- Join NALTEA or other professional organizations that can provide the structure for increased cooperation and unity.
- Speak up on behalf of better education practices for training abstractors, and join efforts to codify that effort in a certification process.
There is much work to be done, but without a unified commitment to these things, the opportunities will be eaten away slowly, until the idea of independent search services is a thing of the past.