But for every thousand visitors we get to our site only a few end up buying or selling a home — or getting a survey — from Redfin. So what’re the rest of you up to? Good question. Every summer, we survey the silent majority, asking how they heard about us and what they think of us. This time, 199 people completed the survey in the space of two weeks, clicking a link on our main map page. As promised, we’re letting you know about some of the results.

First off, the biggest source of visitors for Redfin is word-of-mouth. When we asked people how they heard about us, 35% said it was from a friend, who had either bought or sold a home through Redfin (6%), or just used our site for search (29%).

June 2008 Redfin Visitor Survey: How Did You Hear About Us?

The big difference between this year and last year was that we’re getting more of our traffic from Google search. If you compare this year’s responses to those from our last visitor survey, in August 2007, you can see that the contribution from Google and other search engines had been pathetic:

August 2007 Redfin Visitor Survey: How Did You Hear About Us?

The surveys reflect the growth of Google-originated traffic but our analysis of our logs show search-driven traffic increasing even more dramatically, accounting for about a third of our traffic growth, which has been 15 – 20% month over month. We still don’t feel like we’re doing a great job optimizing for search, but we’re getting better.

What Visitors Know About Redfin, What They Care About
Next, we asked people about their awareness of key Redfin facts, such as the nature of our business (we’re a real estate brokerage), the extent of our service (we handle negotiations and contingencies through closing), and how our process works (we talk with our clients before you are committed to any particular transaction).

The fact that visitors were most aware of was our commission refund, which just goes to show that how we think of ourselves (a fanatical customer service company) is different than how others see us (as a way to save $10,000):

June 2008 Redfin Visitor Survey: Awareness of Key Redfin Facts?

Consumers seemed especially unaware (21% said this was clear & understood) that our agents must have experience with 20+ transactions before representing a client, while only 9% knew that our agents earn between double & triple the industry average. Other facts that only 1 in 5 customers knew about:

• our 95% customer satisfaction rating,
• MLS data showing we negotiate price better (The Redfin Advantage),
• the percentage of Redfin customers who have never bought a home before (45%),
• the total number of transactions we’ve closed (more than 1,500 & counting).

Then again, 18% of Americans believe the sun revolves around the earth. OK, now here’s what visitors considered to be “the most important” Redfin facts:

June 2008 Redfin Visitor Survey: Importance to You of Key Redfin Facts?

The fact that we talk before you’re committed to anything, that our customers are happy, that we negotiate a good deal — all of these things were almost as important as the commission refund. If you combine these two graphs, to see what facts people care about that they didn’t previously know about, it turns out that our negotiating advantage and customer satisfaction ratings are the most under-marketed aspects of Redfin’s service…

So we’ll do our best to get the word out about our customer results…

Many thanks to all the folks who filled out our survey, and congratulations to respondent lfischer46… you won our prize of a $250 Apple gift certificate, which we’ll be mailing to you today.

Questions, comments about the survey, please let us know!

The post Survey Says… Redfin's Best-Kept Secret is Its Customer Service appeared first on Redfin Real Estate Blog.

That can be a heavy burden to bear, especially when the question you’ve answered is a contentious one. Last spring, Redfin analyzed the MLS data available to all brokers to show that our home-buyers negotiated a better deal on a home — saving an extra $4,000 off the list price — over and above our commission refund. We called the total savings, of $14,080, the Redfin Advantage. We promised to make calculating it a regular thing, which meant that saying we saved customers money in one year would obligate us to admit it was a fluke if we didn’t repeat our performance in the next.

So when Redfin set out to evaluate our performance over the last 12 months, in a downturn that has brokers of all stripes competing ferociously at the negotiating table, I was sick to my stomach. As transaction volume grows, we should regress towards the mean. But the numbers came in for both Seattle and the Bay Area, and they only show the Redfin Advantage got bigger, with a smaller range of error (thank goodness!):

• Redfin home-buyers over the past twelve months paid on average 1.015% below homes’ asking price, while customers of other brokerages paid .087% below asking price.
• This difference in negotiating results saved Redfin customers nearly 1% of the home’s final price, for an average savings of $5,048.
• In addition, Redfin refunded each of these customers an average of $10,520 in commissions.
• The data is statistically significant, with p-values for each of the three counties we evaluated between .00004 and .02. To a statistician, this means there is less than a 2% chance that our results could be the result of chance. The p-value for last year was closer to .03 or 3%.
• It would be hard for us to exaggerate or fabricate this data, since other brokers can and will challenge the result. There was a huge brouhaha last year. One intrepid broker found an error on one transaction, and we immediately issued a .01% correction.
• Redfin’s customer satisfaction rate was again 95%, for home-buyers whose offers succeeded or failed. Our demographic broadened, with the number of high-technology customers dropping from 48% to 33% of our total, and the number of first-time home-buyers increasing to 45%. Unlike the negotiating advantage, the satisfaction and demographic results come from our own surveys, which are less reliable.

The report analyzes data from February 6, 2007 – February 5, 2008, based on the anniversary of our launch of our home-buying service, Redfin Direct for Buyers. We didn’t analyze LA, San Diego, Boston or Washington, D.C. because we hadn’t served those markets for the full year, and we didn’t have a statistically significant numbers of sales there either.

Because the negotiating advantage is consistent across different Redfin agents, different customers, different counties, different years, in markets that were healthy and slumping alike, it seems fair to conclude that the advantage stems from the Redfin business model itself. What does that mean?

Customers on the prowl for a deal are a big reason we negotiate effectively. The partnership we try to set up with customers gives them a more active role in negotiations and, because they have the most skin in the game, they come to the negotiating table armed to the teeth with data from our site. Last year we tried to give all the credit to our agents, but now, we think Greg Swann was right: a lot of credit goes to our customers too.

We still think the results validate the skill of our real estate agents too, whom we pay customer satisfaction bonuses rather than commissions to avoid creating any pressure for customers to close on a bad deal. Alone among any national brokerages, we require our agents to have experience with at least 20 transactions before representing a client. Hats off to all our Redfin agents, and thanks for your hard work, now being recognized on TechCrunch, in our favorite real estate blogs and the local papers.

Many thanks to Redfin star Chris Glew for preparing the report, his first big business project. An anthropology M.A., Chris previously studied ancient Mexican turds and fabulous jungle-buried relics. In his interview for the job, he explained that the diameter of an empire’s tortilla-making griddles increased with its ability to enslave people in the fanatical construction of monuments (which in turn prompted us to expand Redfin’s Costco order.)

The post The Redfin Advantage: Bigger, Broader, Higher Statistical Confidence appeared first on Redfin Real Estate Blog.