In real estate today, large numbers of agents are competing for a shrinking market. With unlimited real estate information available online and multitudes of sites competing with, and seeking to replace the agent, the public increasingly looks at a traditional agent (and brokerage), who only offers the traditional full-service package payable only by commission, as a commodity to be shopped by price. Limiting themselves to the traditional commission model, agents and brokerages are indeed swimming in a blood red ocean of cutthroat competition.

By contrast, real estate consulting, which provides the consumer responsible choices in the services they can obtain and how they can pay for them, while paying the professional fairly for their time, experience, and expertise, creates an "uncontested market space, ripe for growth that makes the competition irrelevant."

While technology and the growth of the Internet provides stiff competition to the traditional model, the sky is the limit when you offer choices such as hourly consulting or a flat fee, while keeping commissions in the mix. The fact is that today's consumer often has needs that just aren't addressed by the traditional full-service model and failure to provide options serves just to send the consumer elsewhere where they will likely get shoddy services and certainly won't get the quality counsel and care that a real estate professional can provide.

But what truly makes real estate consulting a wide open blue ocean is the income that can be earned by assisting consumers that aren't even involved in a transaction (or not yet) such as needing counsel in making the move-versus-improve decision, whether or not to refinance, questions about taxes and assessments. Red oceans? Blue oceans? Read on.

Red Oceans vs. Blue Oceans

In last year's best selling book, "Blue Ocean Strategy," authors Chan Kim and Renee Mauborgne describe how "today's major business successes have come from re-imagining the business at hand." They pointed out how "innovative leaders, who could see beyond the ordinary, have redesigned normal businesses, and even entire industries, because their vision and knowledge prompted them to seek and implement solutions that had not been considered."

I will always be grateful to my friend and colleague Ken Deshaies, who in writing the forward to my book Ripping the Roof off Real Estate , introduced me to this must-read book. It is the inspiration that gives me the utmost confidence that the real estate industry MUST find new ground to satisfy the changing consumer demands. For those agents, brokers, and owners who are struggling with the declining profits and shrinking margins in today's competitive real estate environment, this book is very instructive. Two companies that the authors study in particular are worth looking at:

Cirque du Soleil: Created in 1984 by a group of street performers, Cirque du Soleil, in less than twenty years achieved a level of revenues that took Ringling Bros. and Barnum & Bailey Circus -- the global champion of the circus industry -- more than one hundred years to attain. As the authors point out, "What made this rapid growth all the more remarkable is that it was not achieved in an attractive industry, but rather in a declining one." What is particularly instructive about Cirque du Soleil's success was "that it did not win by taking customers from the already shrinking circus industry, which historically catered to children. Instead it appealed to a whole new group of customers: adults and corporate clients prepared to pay a ticket price several times as great that charged by traditional circuses."

Curves: Since franchising began in 1995, the Texas-based women's fitness company has grown like wildfire with total revenues in 2006 exceeding the $1 billion mark. On average, a new Curves opens every four hours somewhere in the world. However, as the authors discuss, what makes their growth really fascinating is that according to the experts, at its inception, "Curves was seen as entering an oversaturated market, yet it exploded demand in the U.S. fitness industry, unlocking a huge untapped market, a veritable "blue ocean" of women struggling and failing to keep in shape through sound fitness." Curves simply responded to what the consumer was asking for, which clearly was not being offered by traditional gyms.

The authors lay out the basic premise of the book as follows: "Imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. In red oceans, companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products (and services) become commodities, and cutthroat competition turns the red ocean bloody. Blue oceans, by contrast, are defined by untapped market space, and the opportunity for highly profitable growth. Most blue oceans are created within red oceans by expanding industry's boundaries, as Cirque du Soleil did."

The authors challenge companies to "create uncontested market space, ripe for growth that makes the competition irrelevant. Companies caught in the bloody red ocean follow the conventional approach, fighting to beat the competition within the existing order by dividing up existing -- and often shrinking -- demand. Blue ocean strategy on the other hand, is about growing demand and breaking away from the competition by creating a leap in value for buyers of their services in wide open blue oceans."

In his forward, Ken referred to consulting as real estate's "blue ocean strategy." In today's struggling real estate industry, with unprecedented online competition and the commission system under attack as it has never been, consulting is a wide open blue ocean, just waiting to be tapped.