by Bob Scarff

In the last couple of weeks, three of the four PLC owned agency chains having announced their 2017 results. We’ve also had Connells give us their normal glimpse into their annual performance - what a shame Spicerhaart don’t do the same……

Anyway, all of this got me thinking about my blog from twelve months ago called ‘which piggy will you be?’ and of how matters have continued to evolve since then.

25/75

I confidently predicted that in five years time 25% of house sales would be by vendors who had opted for some form of self service. Well, we’re one year into it and it appears that “on line/hybrid” agents account for around seven percent of the market. They’ll need to grow at 4.5 points in each of the next four years for my prediction to come true. “We’re on course to do exactly that” some will say. “You’ll run out of money before you do” say others (it’s this latter point that in the no frills sector will make this year’s word “consolidation”, there’s at least one merger rumoured).

I would say, look carefully at what I predicted. I don’t draw the distinction around whether the client pays at the beginning or pays at the end. My observation is all about “self service” not about price. If the growth of the “Pay First” agents slowed toward the end of last year, then it’s to do with the wider realisation that it’s only good value to pay first if you succeed in completing your sale. There’s far more awareness now of this simple fact and that’s a good thing.

Did you listen to Lee Wainwright of Purple Bricks being interviewed by Adrian Goldberg on Radio Five on 4th February? I did. I so wish it had been a phone in, I wanted to ask Mr Goldberg if he seriously thought that vendors should have it both ways. Paying first can only even begin to be good value if you complete your sale. Ergo, if you don’t then it is clearly not.

Win or Lose

This time last year, I separated agents into four types. These can be summarised as:

Head in the sand

Muddled thinking

Foot in both camps

Two models one brand

Head in the sand

I said that these agents “haven’t seen the need to change their approach at all” - there are plenty of agents like this across the Country (none of them are Callwell customers of course). It is they that are cutting their fees the most, it is they that are losing market share, it is they that still don’t get that in 2018 “full service” has to mean precisely that. I predicted that they’ll be piggy in the middle and so far, it looks like I’m right.

Muddled thinking

I said that these agents “Recognise the need to change, but can’t make a clear decision about how” - again, I see plenty of people falling into this category. Probably the highest profile example is the relaunch of easyProperty last September. Jon Cooke and the team at GPEA/Fine & Country have a great track record for delivering great value to their members/licensees and so adding a “no frills” option alongside was great thinking. I fear though that many agents were muddled in their thinking when they took an easyProperty licence. They saw it merely as a defence against the “on line threat” rather than something to be embraced as a matter of increased customer choice.

Foot in both camps

I said that agents “with clear brand segmentation, good marketing and great people will emerge as the biggest winners”. There are plenty of examples of how it is possible to allow the customer to choose. Since I made my prediction - LSL have joined Savills as shareholders in YOPA, Connells have continued to invest in their Hatched business and Property Franchise Group have acquired Ewe Move to run alongside their “traditional” sales brands. Their growth in 2018 will be interesting.

Two models one brand

I said “I see the apparent economic attractions to this approach, but it sounds like trying to push water up hill”. However, I did concede that “if the two propositions are well understood by both the people selling it and the people buying it then it might work”. So it was interesting to read last week of the retreat from this strategy by Countrywide with the new top man Peter Long saying “all we did was confuse the customer and confuse our own staff”.

The customer wins

My conclusion last year was that if “digital disruption” was doing anything, it was certainly improving the choice and quality of service available to the typical home owner.

Whichever type of agent you think you are, in this modern era it’s a short cut to failure if you can only win listings by promising things that you don’t deliver. A bit like telling a vendor that you’ll always respond quickly to email enquiries about their property when you know you don’t. Although if you’re a Callwell customer then you do !!

Bob Scarff

Written by
Bob Scarff

Bob Scarff ran the UK’s largest and most successful firm of estate agents, having worked his way up from a trainee negotiator in 1978. Now bringing his passion for customer service and organisational discipline to other companies and sectors, he saw quickly the benefits that Callwell can provide and co-founded PropTech Solutions in 2016 to relaunch it into the market.

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