The avoidance of “friction” is becoming one of the most important value propositions a business can offer.
Uber, Amazon, PayPal, Venmo, iTunes, Instacart, TaskRabbit, and ZipRecruiter are great examples of businesses that exploded solely b/c they eliminated friction (they made shopping, securing services, and making payments vastly easier).
Even more traditional companies have mastered eliminating friction.
Trader Joe’s is one example with its devotion to short check-out lines, and Hertz is another with its “Gold” rental car service where renters just hop in a car of their choice and drive away.
It is both fascinating and amazing to think about how much time and effort these firms save for consumers.
It is also interesting to note how often consumers are willing to pay a premium in order to eliminate friction – Uber is more expensive than cabs in many markets; Hertz Gold is more expensive than standard car rentals; and Instacart usually costs more than traditional shopping, to name a few examples.
Another example is Opendoor, the company that buys and sells houses directly without real estate agents. I did not think Opendoor would do well b/c I thought sellers would be more concerned about capturing top dollar and that sellers would want more guidance.
But, I was wrong, as Opendoor is doing far more volume than I ever imagined.
I blogged about “friction” last May, and am bringing it up again b/c I think too many people in the mortgage and real estate industries underestimate its importance.
Consumers are demanding and expecting low friction transactions more and more, and businesses of all types that ignore this obvious fact are in great peril.
We spent hundreds of thousands of dollars over the last year buying and customizing new software with the sole intention of eliminating friction for our referral partners and our clients.
As a small business, the costs were very painful. But, we knew it was a necessity and it is paying off already.
We are going to keep spending money too b/c we know we have to make mortgage financing as simple and as easy as possible, or we will not survive.
In any case, this is another reminder for all of us in both the mortgage and real estate industries that the elimination of friction needs to be a paramount goal.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167