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Last Update: Tuesday December 10, 2019

Key Idea: Develop More Products To Serve Current Customers

Ebby Halliday and Mary Frances Burleson say that loyal customers return if you give them more to buy and 'tie the bow' on every transaction.

Key Question:

A: 

Ask customers what they want and give it to them.

Q: Why would a company move away from its core business and take on the risk of managing a start-up within the established business?

A: Most of the business owners we meet say, "The idea for a business is less than 2% of the result." So much of the work of business is devoted to sales and marketing -- as much as 80% in some industries. If you already have a customer and can provide additional products or services, then your total cost of selling is reduced. Medallion knew their customers, who had been their employees for many years, very well. As far as the Mursteins were concerned, the risk was minimal. The key to expanding into new businesses is integration. Horizontal integration, which the Mursteins really excel at, is providing new goods or services, outside of the core business, to an existing market of the business. Vertical integration, another effective way of expanding the revenue base and bottom line profits of a business, occurs when a company ventures into a new part of the supply chain that the business is already part of. For example, a manufacturer with an established product and distributor network might decide to open some retail locations and sell directly to the end consumer.

Q: How does a business determine the new product offerings that will appeal to their customer base?

A: Unlike a lot of the challenges that face business owners, this is a question that can actually be addressed mathematically! It is unlikely that any two businesses in the world have exactly the same customer listing. Yours is unique. Every one of your customers buys from other vendors as well. Find out what they buy, and from whom. Look for natural synergies within your own product mix offering. You may find additional inventory (items or services which you are already positioned to add to your goods or services available for sale) that your customers would readily purchase from you.

Perhaps there is a vendor relationship that you could establish which would permit you to add another line of goods that your customers are currently buying from a competitor because it is not available from you. In the service industries, perhaps you could establish a strategic alliance with another service provider and bring a unique service to your existing customer base. Most businesses buy paper clips, but if you sell industrial machinery, we're not suggesting you get into the office supplies business. What we are suggesting is that the existing customer relationships you have are one of your most valuable assets.

The mortgage product was a logical extension to Ebby's core business and it was perfectly positioned to launch that new product with minimum investment and minimum risk. In a unique fashion, Ebby Halliday Real Estate was able to turn existing home-buying customers into mortgage customers. The underlying merit of product innovation for existing customers is the same; it is less challenging, in that it requires less effort, to develop a new product, than to develop a new customer relationship.

Questions for this clip: 1 | 2

Think about it

Are there opportunities for integration, horizontal or vertical, in your business? What do your existing customers buy from other vendors that they would buy from you if you offered it? If you don't know, ask them! What would it cost you to expand your offerings and what profitability can you reasonably expect? What's your after-market and how do you go after it?

Clip from: Ebby Halliday built a business and a legacy.

Dallas: Ebby Halliday is a legend in this city.  She started her business in 1946 with nothing but the love of her family. Classic Americana, this is a rags to riches story. She went from the Great Depression to create a multi-billion dollar business.  She is truly one of today's pioneers and quiet heroes. .Today she has over 1500 independent realtors, hundreds who have become millionaires on her watch.

Ebby  will tell us how she broke through the gender barriers long before there ever was a feminist movement, how she found the person who replaced her at the top and why she gave the company to her employees.

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Ebby Halliday Real Estate

Ebby Halliday, Chairman

Visit our web site: http://ebby.com

Business Classification:
Real Estate

Year Founded:

Develop More Products To Serve Current Customers

MARY FRANCES BURLESON: We now have Your Home Team mortgage company. We started it a year ago November, and we're very excited about that. It's doing very well. We started this as a service for our clients. Our associates were able to buy units because it's a limited partnership, so it's an opportunity not only for our clients but for our associates. So making that better, more efficient, we now have desktop underwriting. So we're using technology and laptop computers.

HATTIE: Now are you telling me that if I want to buy a house from Ebby Halliday today, that you'll also do the mortgage?

MARY: Yes, indeed, with Home Team Mortgage. Yes, we will. We can get you with a loan officer, take your application and do desktop underwriting, order your credit report while you're sitting there and, with certain restrictions and prices, we can get you approved immediately, that day.

HATTIE: What are you doing now to lay the plans for the next level of success?

MARY: We're looking for people who have the fire in their heart the same way. In the last three years we have physically moved half of our offices. In each case, we're hoping to improve the location for better visibility for better access for the public.

HATTIE: Are you telling me that you can't sit still?

MARY: You bet. If you rest you rust.

HATTIE: Someone watching this maybe is in a job, they're bored, they're stuck. They maybe don't want to do real estate, but they've got an idea of something they want to do. And you could give them some advice about how to be successfully self-employed.

EBBY: Well, first of all, I think they need to have a sound idea, and they have to have a product for which there is a market. And then they have to be able to present that product to enough people to make enough sales to pay the month's rent. For that it takes some going-in financing, and then it takes some very astute management and saving but at the same time being willing to put some profits back into the business. That is a point I haven't touched on, but in 53 years we've gone through the highs and the lows. And the lows have taken every bit of ingenuity that our management team, our people, could employ. And the independent contractor in real estate with a good sound company has it made because they get the education, they get the client acceptance, but they do have to be in charge of their time. Time is their--management of their time. And they have to never forget the basics of service and of tying a bow on a transaction so those people will tell their friends about you.

HATTIE: Tying a bow, leave them feeling wonderful.

EBBY: That means not letting them go to the title company for closing alone. Go with them see that everything is as it should be, whoever you're representing, whether it's the buyer or the seller, or in certain cases it's possible to do both.

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