I have been operating Tenantify for a while. It is a site for tenant employment and income verificaiton. We have tried many customer acquisition strategy, most effectively through Zillow and Trulia commenting. Based on the traffic and conversion data I have on Tenantify, I have formed a view on the real estate listing market - I think it is a winner-takes-all market. If Trulia does not differentiate itself from Zillow, it will probably be dead or sold soon.
The thinking was prompted by a piece of news that caught my attention: Truia will invest $45M in TV advertising this year. As the author said humerously, "In the online real estate listings game, where Zillow goes so inevitably must Trulia... Zillow announced a $30 million national marketing campaign in mid-2013. Trulia kicks its $45 million ad blitz, which will run through the Fall, today."
I guess it is a land-grab game here. If I use Zillow first and find it satisfying, what is the point for me to use Trulia? And vice versa. In a marketplace with undifferentiated products, the gap between the first and second will only enlarge over time. If you look at the PE ratio of these two companies, it already tells the story.
This blog post will offer a tiny angle to support this winner-takes-all view. The process goes like this: my target customers search for tenant screening tool on Google; they find a good enough link (typically Zillow) and click, and convert. At least in the story of Tenantify, there is no point for Trulia to exist. Okay, let me break it down.
Link building
I have built quick some links through Trulia and Zillow, mostly through their Q&A sections where landlords ask for advice in tenant screening. I put about equal effort into either site. I guess the number of links from Trulia is artificially increased due to Trulia's site structure. But trust me, about equal effort. [ibimage==30869==Original==none==self==null]
Traffic generation
The resulting traffic genarated through these two sites cannot be more different! As you can see, Zillow referrals dominate.
[ibimage==30870==Original==none==self==null]
Conversion
Zillow referral converts at 13% into sign-up, while Trulia converts at 4%. This is a good indication of customer quality.
Conclusion
Based on the lessons I learned, I have refocused my effort to generate more contents for Zillow, not Trulia. While it is my limited experience, it illustrates a classic thesis in economics: in a undifferentiated marketplace, the topdog will increase its share of the market just by being the first, as it creates a self-fulfilling virtuous cycle that attract more users over time. For Trulia, I guess it has to innovate and differntiate, otherwise it will not get content from Tenantify.
