25 / 75
Under the heading “Piggy in the middle” last week, I said that within the next five years 25% of all house sales would be by vendors who would have opted for some form of self service. No one has openly disagreed with me, so I must be right……..
If I am right, then agents of all sizes have big decisions to make about where they’ll stand in the new world. An agent deciding to only offer full service will be cutting themselves off from 25% of the market. An agent deciding to only offer self service will be cutting themselves off from 75%. Big decisions !!
We’re already seeing a number of different approaches, but I still come across a lot of muddled thinking. Agents are trying to come up with the answer before they’re really clear about the question. I’ve heard agents earnestly debating things like Hybrid and Virtual when it’s quite clear to me that they each mean different things - don’t laugh, write down on a piece of paper in no more than three sentences your definition of a hybrid agent and then ask a colleague to do the same. You’ll almost certainly find at least one significant point of difference.
Win or Lose?
So, what of these different approaches. Who will win and who will lose?
First up are the agents that haven’t yet seen the need to change their approach at all. They don’t subscribe to my 25/75 view and whilst they embrace technology (according to their marketing) they don’t agree that vendor and landlord expectations have permanently shifted. They believe that there will always be a place for an agent like them doing things the way that they always have. They might be right of course, but I think they will end up as Piggy in the Middle and will lose share across the whole market.
Next we have those agents that recognise the need to change, but can’t make a clear decision about how. This may be because of a disconnect within their internal decision making process (too many cooks). It may be that they simply can’t agree on the question they’re trying to answer as above. It might be both. Either way, they too will end up as Piggy in the Middle and will lose their share across the whole market, maybe not as much as the first group, but they’ll be losers all the same.
Then we have the biggest group. Agents who do see the need to change and do have a clear plan of action of how they’re going to have one foot in the full service camp and the other in self service. It is from this group that agents with clear brand segmentation, good marketing and great people will emerge as the biggest winners. These agents will secure their share of both the 75 and the 25 and are the most likely to gain from the losses of others.
This group is so big that it sub-divides into two groups based on one seminal question - is the self service proposition offered under the same brand as the full service one?
In one group we have agents like Connells (with their acquisition of Hatched) and Savills (with their investment in YOPA) who appear to believe that separate brands is the optimal path. I expect to see a lot of agents choose this route and there’s a lot still to happen in this space.
In the other group we have agents like Countrywide, and vast numbers of others who don’t grab the headlines in the same way, who have decided that it is possible to offer both propositions under the same brand and with the same people. I see the apparent economic attractions to this approach, but it sounds like trying to push water up hill to me. Mind you, if the two quite different propositions are well understood by both the people selling it and the people buying it, then agents in this group just might end up as winners.
Finally we have those agents that recognise that customer expectations have permanently changed. They agree with me that self service is not all about price and will take something like 25% of the market. They also agree with me that full service will account for 75% of the market, but they also know that full service has to mean exactly that. Whether they’re in the 25 or the 75 the winners from this group will be those that actually do what they say they will.
Ultimately, it is the customer that will decide the outcome. If the digital era brings them better service from the Nation’s estate agents then the customer will be the true winner.