@copyright 2009 Council of MLS (CMLS)

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2 CMLS MLS Operations Benchmarking Survey In September 2009 the Council of Multiple Listing Services (CMLS) and WAV Group reached out to the entire MLS community for the second year to gather insights about a variety of elements of MLS operations. The goal of the survey was to provide each MLS with a benchmark to compare its operation to. When considering the addition of new services or programs, MLSs throughout North America can refer to the report to help evaluate service offerings relative to MLSs around the country. Profile of Respondents The survey was completed by 115 MLSs around North America representing approximately 750,000 REALTORS!. The respondents represent a diverse sample of geographies and sizes. How many members/subscribers do you have in your MLS? ((#*%& ,000!*#+%&!'#)%&!'#)%& 10,001-20,000 '#(%& 20,000+!"#$%& 0% 5% 10% 15% 20% 25% 30% 35%

3 3 Key Issues Facing MLSs today Meeting the Needs of Real Estate Consumers Many MLSs responding to the survey believe they need to step up their efforts to help their subscribers stay relevant and integral with today s real estate consumer. Below are a few of the responses from MLSs when asked, How do you believe the MLS will change in the future? Dramatically; the consumer will demand and get even more access to our "sacred data". The only question is will Brokers and agents still be the conduit for the access to real estate information. The MLS is uniquely positioned (absent the politics) to fill the void. Those MLS' that are able to seize the opportunity will remain viable and grow; the others-good bye! How to encourage/educate members to use technology to better serve their clients and meet the demands of today s consumer There will be more involvement in connecting agents to clients through public web sites, listing syndication, agent rating systems, blogging platforms. There is a widening gap between the Membership s business practices & standard service levels and the expectations of today s younger buyers Increased Competition MLS executives are feeling new competitive pressures both from inside and outside the real estate industry that they believe are threatening the long-term viability of MLS organizations. Since multiple listing services historically have been very profitable operations, there are many organizations from within organized real estate that are making the industry more competitive.

4 4 Competition from other segments of the REALTOR! world - RPR, CalREDD, being the two biggest examples. MLS will, for the first time (in most markets) be a competitive industry. Figuring out our identity among ourselves, local, state and national associations and third party models Maintaining Relevance There is also concern about the way MLSs will maintain their relevance and deliver meaningful services that continue to meet the needs of their customers. Continuing to be relevant to our users. Consolidation will continue as smaller MLSs cannot afford to compete with larger MLS'. The more technology we have, the more expensive it gets and agents who belong to smaller MLS' will not be able to compete with surrounding brokers that are members of larger MLS'. Changing Definition of Data Responsibilities Still others believe the core role of data collection and distribution will fundamentally change over time. We will be more data centric and provide more products and services our members currently get elsewhere, provide more technology and different levels of data (ex - IDX versus VOW) Singular data entry feeding numerous front ends. There is a real potential for governmental entities to step in and end the business entirely.

5 The role remains the same, but the focus should be on bringing more content and value to the customer via collaborations with other MLS's and identifying and integrating expanded data sets to add value MLS will need to define its role as the listing quality assurance and listing content management tool. MLS should be providing listing syndication by providing versatile feeds in a secure environment. Perhaps open to all listings whether broker originated or not. More data available including lifestyle information; Most likely more as a data collection service, syndicating or delivering data wherever the users want it to go. 5 Evolving Business Model Some believe the business models of MLSs will continue to evolve as well. Pricing models and the structure of relationships with technology vendors will adapt to allow for more customization of service offerings based on the needs/interests of individual subscribers. MLSs will offer more packages in order to sell their many different products to agents/boards ex: For level 1 you get website, online access, quarterly updates at no charge and 1 extra feature (phone capabilities); For Level 2 you get level 1 plus an additional feature; etc Shifting away from bulk purchases or per member vendor pricing to menu pricing for products and services. Allowing MLS participants to choose the tax service or the CMA product from a selection and then charge accordingly. Broader Data Access In certain regions it appears as though subscribers needs for broader data access are still not being addressed properly.

6 6 The need for Members to belong to multiple Boards in order to service their client base as a result there is the potential in this economic climate for individuals to be selective in their choice of Board. Where in better economic times membership in multiple Boards was an acceptable option to them, they are now having to choose where to put their membership dollars. Membership Trends While some MLSs are still experiencing membership losses, the number registering membership decreases is declining, while the number experiencing membership growth is increasing. Those that are declining appear to be declining at a slower rate than in What percentage has your subscriber base increased or decreased in the past year? 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

7 7 Core Service Offerings Property Records are the second most popular service next to the MLS system itself. RETS access is predominant now since near 75% of respondents now offer it. Wireless MLS access is now predominant as well. Listing Syndication is also popular now along with MLS consumer websites and Document Management. Property/Tax Records RETS Access Wireless/Mobile MLS IDX Feeds Auto Fill listings with Public Records VOW Feeds MLS Consumer Website Automated Listing Syndication Electronic Bill Paying Document Management Virtual Tours Mortgage Calculator Single Sign On Showing Appointment Software Agent or Broker Websites Agent CRM Software Other Transaction Management Strong Authentication(Security Tokens) Real Estate Weekly - Printed/Online Magazine Multi-lingual capability Photography Services Adaptive Security Token Less Strong Authentication +(#'%& -"#+%& -"#+%& -(#,%& *'#$%& *(#'%& *$#*%& '+#(%& '"#+%& "$#*%& "!#-%& ")#,%& (-#"%& ((#,%& ()#"%& $(#'%& $!#-%& $)#,%&!,#-%&!+#(%&!(#)%&!$#$%&!!#(%&,#*%&

8 8 Non-Dues Revenue Over 50% of respondents are now selling services in addition to the core services offered as part of their membership subscription. The bulk of respondents are generating less than 10% of their total revenues from non-dues products and services currently, however some predict that the percentage of revenue generated from additional services will increase in the next several years. According to one respondent: The monopoly will be gone and MLSs will compete for subscribers. The core service will become free or nearly free as MLSs charge for marketing services and differentiators brokers and agents can use, at a premium cost. Support and education will become profit centers as they expand their offerings beyond basic MLS service. Do you sell services in addition to the services included in subscriber dues? 60.0% '"#)%& 50.0% 40.0% ((#*%& 30.0% 20.0% 10.0%,#-%& $#-%& 0.0% Yes No Considering Launching in next 6 months

9 9 What percentage of your revenue is generated from non-dues revenue? *,#-%& 70.0% 60.0% 50.0% 40.0% 30.0% $"#$%& 20.0% 10.0% (#)%& (#)%& 0.0% % % % 30%+ What technologies are you selling/planning to sell that are not included in dues? IDX feeds Other VOW Websites Agent Websites Photography Customer Relationship Mgmt Wireless/Mobile MLS Premium MLS software Electronic Faxing Room Layout Software Document Management Showing Appt. software Mortgage Calculator "#"%& "#"%& "#"%& (#'%&!#+%&!#+%&!#+%& )#)%& )#)%&!!#'%&!'#)%&!"#$%&!+#*%& 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% IDX feeds, and VOW websites the two single largest sources of non-dues revenue currently. To date, MLS respondents are not yet creating a significant portion of their revenues from selling real estate technologies beyond core data services.

10 10 Many technology vendors are very interested in learning more about how they can partner with MLSs to promote their products. This interest may present opportunities for increased revenues for MLSs via revenue shares. Virtual Office Websites (VOW) Most MLSs who responded to the survey now offer virtual office websites to their members to be in compliance with the Department of Justice ruling. Interesting, though, few MLSs are providing more than 1 to 3 virtual office websites for their members. The only notable exceptions are the markets that adopted VOW s many years ago. Do you offer VOW services to your members? 231&!,%&./01&+!%&

11 11 Member Satisfaction Tracking Survey respondents were also asked about their participation in tracking member satisfaction. Just over 2/3 of respondents said they do field surveys and other tools to track member satisfaction. Nearly half of respondents conduct annual surveys. Nearly 20% field surveys more often. MRIS, the largest MLS in the United States, for example, fields surveys quarterly. Their employee incentive program is closely tied to positive movement in customer satisfaction. Do you conduct member satisfaction surveys? 231&((%&./01&*-%&

12 12 How often do you conduct member satisfaction surveys? Never )#)%& Every few years -#,%& Occasionally ()#(%& Annually ""#-%& Bi-Annually Quarterly,#$%& -#,%& 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

13 13 Strategic Planning 81% of respondents say they conduct a strategic plan at their company. More than 50% of respondents conduct a strategic planning session annually. Some say they used to conduct sessions every other year, but have moved up to annual events because the dynamics of the MLS industry are moving so much more quickly now. Do you conduct a strategic plan? 231&!,%&./01&+!%& How often do you conduct a strategic plan? Occasionallly,#,%& Every three years Bi-Annually!,#+%&!-#*%& Annually '$#-%& 0% 10% 20% 30% 40% 50% 60%

14 14 Going Green Nearly 2/3 of respondents have implemented or in the process of implementing a green strategy. Reducing paper and printing is the #1 method for going green following by recycling and energy conservation. Has your company implemented a "green" strategy? 40% 35% 30% 25% 20% 15% 10% 5% 0% ('#"%& (-#$%& $'#-%&!#+%& Yes No In progress Not Sure

15 15 What elements are involved in the green strategy? Less paper, printing Recycling Electronics recycling "*#)%& '$#$%& ",#*%& Energy Savings Online meetings "Green" designations Document Management (+#!%& ((#*%& (!#,%& $'#-%& Green Broker Promotion Other Adopt Green standards Green Audit!$#"%&,#-%& +#)%& (#'%& 0% 10% 20% 30% 40% 50% 60%

16 16 Listing Data Quality Control Just over 50% of respondents either already have begun or are planning to implement listing data quality control software. Interestingly, though just over half of those track improvements in listing data quality. Nearly! of the MLSs that track quality improvement trends report they have experienced significant improvements in data accuracy. MyFloridaRegionalMLS(MFRMLS), for example, experienced an 85% improvement in data accuracy is less than a year when they implemented data quality control software coupled with stringent, yet supportive data accuracy policies. Do you use listing data quality control software to improve the accuracy of your listing database? 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% (,#+%& "*#)%&!!#'%& Yes No Next 12 months $#-%& Not Sure

17 17 Do you measure data quality improvement trends? ""#"%& *'#*%& How much has the accuracy of your data improved since you implemented data quality control software? 80% 70% 60% 50% 40% 30% 20% 10% 0% -$%& $)%& )%& Significant Somewhat None

18 18 MLS Consumer Website More than 70% of respondents offer a MLS consumer website or will be launching one in the next 6 to 12 months. It appears that the industry has now recognized it can provide value to its members by delivering leads from a public-facing website. Do you currently operate a MLS Consumer Website? 70% *(#-%& 60% 50% 40% 30% 20% 10% 0% $'#-%& -#!%& $#-%& )#,%&

19 19 What features do you include/plan to include on your MLS Consumer Website? Property Search Ability to contact listing agent REALTOR search Map-based search Ability for members to frame search Consumer registration Outbound lead activity reports School ratings Ability to register with agent Consumer mobile search Search by points of interest Blog/social network Localized URL's Search by school rating Other Agent Ratings Training Nearly 50% of respondents state that less than 20% of their subscribers complete training annually. Only 12.5% of respondents are satisfied with the levels of participation in their training. There is an opportunity to repackage training to make it more relevant and compelling to members. The titles and course descriptions, when tied to the benefits interesting to members (making money, attracting more customers etc.) can increase interest and attendance. Web-based training has also been proven to increase participation particularly in MLSs covering a large geographic area.

20 20 What percentage of your members attend MLS and/or technology training annually? 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% "*#)%& (*#(%& -#!%& -#!%& $#-%& )#,%& 0-20% 21-40% 41-60% 61-80% % Not Sure How satisfied are you with the amount of the participation in your training programs? 60% '(#')%& 50% 40% 30% 20%!$#')%&!-#,)%&!*#!)%& 10% 0% Very satisfied Somewhat satisfied Somewhat dissatisfied Very dissatisfied

21 21 What training formats do you offer? (Choose all that apply) Other +#+%& Help Screens *!#!%& Online/Webinars *,#)%& Hands-on -,#*%& Lecture style +)#'%& 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% What training topics do you offer? Introduction to MLS Advanced MLS Creating CMA's Listing Input/Maintenance Creating Custom Reports Tax/Property Records System Forms/Doc Mgmt/Trans Mgmt Short Sales/Foreclosures Effective Websites Microsoft Software Other,*#'%& +-#*%& +(#$%& +)#'%& *'#'%& ''#+%& (,#+%& (!#,%&!*#+%&!"#$%&!(#(%& 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

22 22 Help Desk About 1/3 of MLSs are now offering extended hours and weekend coverage. Just fewer than 5% of respondents offer 24/7 coverage. Since many REALTORS! work in the evenings and on the weekends, it may make sense for more MLSs to offer weekend and evening customer service support. Do you operate a live help desk for your members? Most of the respondents deliver their own help desk. 80% -)#+%& 60% 40% $'#-%& 20% (#'%& 0% Yes Operated by Vendor No

23 23 What are the hours of operation? 24/7 "#"%& Weekend non-live coverage Weekend live coverage Extended during week!-#-%& $,#$%& ("#'%& During office hours -(#*%& 0% 10% 20% 30% 40% 50% 60% 70% 80% What forms of communication does the help desk offer? Other Video Chat!#+%&!)#*%& Live Chat Text $-#"%& $-#"%& Phone +$#(%&,(#+%& 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Nearly 30% of MLSs surveyed are now communicating with their members via text messaging and live chat. A small percentage is even starting to offer video chat.

24 24 How often is feedback solicited about the quality of the help desk services offered? Not Sure!!#!%& Never $!#(%& Occasionally ($#"%& Often $)#"%& After every contact!"#+%& 0% 5% 10% 15% 20% 25% 30% 35% While help desks have been proven to be one of the most important factors leading to increased member satisfaction, less than 15% of respondents measure customer satisfaction after every help desk contact. Regular monitoring of help desk satisfaction helps MLSs stay closer to their customers. If a survey reveals a dissatisfied customer, that customer can be contacted immediately so that remedial action can be taken.

25 25 Data Sharing Reciprocal data access and regional data sharing are the two most prevalent types of data sharing for respondents of the survey. Just over " of respondents do not have any data sharing initiatives in place currently. Another " is either in merger discussions or has recently merged. Which of the following data sharing initiatives does your MLS participate in? Reciprocal Data Access Regional Data Sharing None Part of Regional MLS Other Statewide Data sharing In merger discussions Recently merged!+#*%&!+#*%&!-#-%&!(#(%& +#)%& $-#"%& "!#*%& ")#-%& 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

26 26 A Word of Thanks The Council of MLS would like to thank WAV Group for donating their services to provide this survey for our members. is a leader in providing consulting services to the real estate industry and is comprised of corporate executives with a depth of expertise in both the real estate market as well as the consumer market. The company has conducted studies for some of the largest organizations in the industry including the Council of MLS, National Association of REALTORS, California Association of REALTORS and others. It has also authored several of its own studies including its annual MLS Technology Survey, Mid-Year Technology Update and many others. The company works with Multiple Listing Services, real estate firms, franchise organizations and technology vendors in the US, Canada and Europe. WAV Group has expertise in the areas of content development, market research, strategic planning, product development, distribution, marketing, and technology evaluation, selection and implementation. For more information, contact Marilyn Wilson at marilyn@wavgroup.com or