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Consumers are More Informed - What does that Mean for 'Experts'?
Consumers have huge amounts of research and data available to them when shopping for products and services; what does that mean for experts? I examined the changing tides in consumer research and the steps that experts can take to stay relevant.
Times Have Changed, Should We?
Everything about how consumers interact with products and services has dramatically shifted over the last few decades. Consumers have more resources at their fingertips than ever before. Just consider the idea of the global community that the internet provides for shoppers - in a few keystrokes, you can be searching thousands of reviews, articles, and videos related to your product. So it seems reasonable to wonder - where does that leave people like me? Those of us that have staked our careers in providing expert information to an educated populous - are we out of jobs?
Be Relevant or Fail
If houses, boats, cars, or airplanes have something in common it’s that they’re expensive. The advent of consumer-facing technologies like Zillow for homes or Car Gurus for vehicles has given everyone access to amounts of aggregated data that would have been incomprehensible 15 years ago - FOR FREE.
The real estate industry has great market research and data, so I will pick on them for a moment.
A study published by the University of Alabama in 2003 revealed that the creation of an online multiple listing service (MLS) had drastically increased the number of properties a consumer was able to “visit” online. Despite this increase, the overall shopping period a prospective buyer took to reach a decision did not change, nor did the reliance on a real estate agent. This is important. It shows that while access to advanced resources may improve the overall quality of the shopping experience it does not undermine the value that an expert provides when purchasing high-worth items.
The increase in public data has changed the dynamic between the consumer and the expert. It increases the pressure on the expert to truly…. be an expert. It has become much more difficult to underperform in these types of industries. The consumer will quickly recognize if your knowledge-base begins and ends with the same information they can find on google in 5 minutes.
Provide Hard Value
An educated client is a great client. There is no question in my mind that a person that comes empowered with knowledge will ask the right questions, challenge my thoughts in a productive way, and have a better outcome with whatever service I am providing because they are more invested. With that said, expert's must bring drastically more value to a client than what was required 15-20 years ago. Experts can no longer operate solely on information that was once difficult for clients to obtain, we must adapt our practices and provide a greater analysis of data that our clients can rely upon.
In my sphere within aviation (particularly in the brokerage space), I occasionally hear a prospect ask, “why do I even need you? I can find all of what I need online?”. We shouldn’t take these questions offensively (as I often tell myself), this is simply a reflection of the times we live in and the type of high-net worth and above average intelligence clients that many of us work with daily. My response is always the same; I tell my prospect that I encourage them to research along with me if that is something that interests them, but it is my trained eye, experience, and understanding of what to look for that differentiates my practice from the lay-person. These types of questions should serve as a stark reminder that our service ought to be worth the price of entry. I think this adds needed and beneficial pressure to experts to continue to employ and leverage new technologies and make an even more effective and impactful experience for the clients.
We must recognize that the consumers of today are generally coming to us armed with a higher level of knowledge than ever before. We can choose to take advantage of this with innovative approaches that leverage our client’s greater understanding of the market - or we can blame the access to resources as the source of our failings. I challenge not only my firm but all of my colleagues to continue to push towards excellence and understand that changing tides should not evoke fear, but a drive towards innovation. In the end, these types of evolutionary shifts force us to assess our strengths and shortcomings and to adapt. We’re better for it and so are our clients.
Author:
Cameron Tipton, ASA, ARM-MTS
accredited senior appraiser
appraisal review & management - mts
Top 4 things to know before getting your aircraft appraised
Lenders, insurers, asset managers and owners rely on aircraft appraisers each day, but there are a lot of misconceptions regarding the ins-and-outs of both the appraisal process and what it means to be an “appraiser”. This new Flight Level blog series, “Appraisal 101” will highlight some things we wish all our clients knew and give some insider scoop on what to watch out for when you hire your next appraiser.
Shedding light on aircraft appraisers
Appraiser credentials are, by far, the most common source of confusion in our industry. Here are the facts you need to know before approaching an “expert” for an appraisal:
1. There are ZERO consumer protections.
Most consumers are familiar with the appraisers from real property transactions, where there are a slew of regulatory consumer protections in place. Outside of real property appraisers, anyone can call themselves an appraiser of something - aircraft, art, surfboards, anything. This creates an environment for confusion, because it forces the end-user of appraisal services to determine the underlying credibility of the appraiser. Fortunately, there are organizations (which I will describe later) that accredit appraisers to perform aircraft appraisals. If you are not using an accredited appraiser you are at high risk of receiving a unreliable report.
2. Dealmakers May Not Be Impartial
Any number of aircraft dealers/brokers will provide you with a written appraisal. These parties are not inherently impartial since they are vying to be a member of the transaction and are concerned with either selling you on a number than makes you happy, or one that gets you to engage them as a broker. Accredited appraisers are held to ethical standards and must disclose any previous, current or prospective interest in the property. Maintaining impartiality is one of the key ethical requirements of an appraiser and an added layer of security with your valuation.
3. Someone Must Enforce Ethics & Best Practices
Appraisers who are accredited by a professional organization must uphold the standards of that organization or they will lose their credential. This is important. Non-accredited “appraisers” are not required to conform with any regulations or practices, nor is there a channel to report and remove unethical appraisers. Flight Level’s appraisers are both accredited with the ASA which strictly enforces compliance with the USPAP development/reporting guidelines, society ethics/practices and requires a minimum of 24 hours of continuing education in the appraiser’s field each year.
4. There are three organizations that accredit appraisers
While there are other organizations that claim to offer credentials the 3 that are professionally recognized are the: American Society of Appraisers (ASA), International Society of Transport Aircraft Trading (ISTAT), and the newly formed (2018) Professional Aircraft Appraisal Organization (PAAO). There are not any other organizations in the United States that provide education, testing, and credentials to aircraft appraisers. We will be comparing these organizations further in our next article.
Next time you or your lender are in need of an appraisal, seek out an appraiser who is impartial, conforms to a standard for ethical conduct and is accredited by an appraisal organization. Of course, if you have further questions or concerns about appraisals, Flight Level’s team of ASA accredited appraisers is here to help.
