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Are easyProperty and Purplebricks a threat to our industry?

In today’s Property Industry Eye, Rosalind Renshaw (top lady!) was talking to the founder of  easyProperty and how he wanted to be disruptive to the UK estate agency and lettings market. In fact Rosalind asked this question, and I quote Disruptive’ seems to be the word of the moment. Why does estate agency need disrupting ?

You see, I wasn’t sure what to write in today’s blog. It was long old day yesterday as I had to go to Bristol for a meeting and got in late. It seems everywhere you go these days agents and journos are talking about disruption as the next big ‘thing’ in our estate agency and lettings industry. However, here is the niggling question I have had bouncing around my head for a while. Can estate agents and letting agents set out to be “disruptive” from day one?  Is it possible for disruption to be a plan … or is disruption the description of what happened after the event?

Let’s look at the biggest innovation /disruption to our industry over the last 20 years .. ‘the tinterweb’. From many players, two main portals, Zoops and RM have grown and evolved continuously over the last 10 to 14 years, nothing seismic, but gradually to the beasts they are today. RM and Zoops aren’t disruptive, their innovation is continuous. Also, let’s think about it for one second, the most effective business people in the world manage innovation in a way to minimise risk and exposure - they don’t chuck millions here or there on whim. 

Apart from the internet and the portals, nothing has changed in our industry. The question of being a high street agent with excellent online presence OR being an online only agent is irrelevant to the question of whether easyProperty or the others will succeed. All homeowners want is some who will sell their house for a decent price for a decent fee and landlords want an agent to find them a tenant who will pay the rent and not trash it  (again for a decent fee).. simples

Good innovation  that has been game changing (ie disruptive) has been focused mainly on technology; eg people using mobile phones instead of landlines, people taking photo’s - film to digital  and Computers – mainframes in the 1960’s that only multinationals could afford to home PC’s to now cheap as chips £99 Tesco tablets etc. Lettings and Estate agency isn’t a technology – it’s a service. Think about it, we are in a service industry; there are no service industries that have been seismically changed due to disruption . evolved, yes.

Do easyProperty realise that landlords won’t swap agents whilst there is a tenant in a property. You know that, in my 21 years in the industry, I can count on two hands the number of landlords I have lost mid way through a tenancy  .... I am sure it’s the same with you.  Landlords don’t swap agents just like people don’t swap banks.  

Robert Ellice, head cheese for easyProperty quoted to Rosalind “I believe there were will be a shift to an online market share of between 25% and 50% within four years. I think you would have to be pretty brave to think that won’t happen.” I would have to disagree with Robert in that I believe Zoops and RM have saved traditional High Street agency’s from online only agencies. Why, because these two sites have made you all 100% online agents TODAY – not within four years. It’s just you happen to have a desk in a shop on the High Street (and not as online agents have, a desk in an office block or on the kitchen table).

As an article This is Money said last year when new faster and slicker rules came in to make it uber smooth, with no hassle, to swap bank accounts .... “At present, just 5 per cent of people change their current account each year- despite figures showing that 65 per cent of people are unhappy with their bank . The hope is that when the new rules come into force, more people will be encouraged to shop around for a better bank deal - rather than just stick with the account they have had since university. In time, the banks will have to up their game and give customers better value to keep them.” So have you swapped banks since the rule change last year .... of course not? Can’t be bothered can you – JUST LIKE LANDLORDS CAN'T be?

One model I do think might work well is Purplebricks – Why? .. because they realise our industry is a people business not a property a business and have local property experts on the ground. I think they wasted their money on the TV advertising myself, and that could have been spent so much better.  I counted 43 Valuers (I think they call them Local Property Experts) who are with Purplebricks and since launch in April 2014, as I write this article at the end of August 2014, have 584 properties either sold stc or available – so around 10 to 15 on average listings per expert since the launch in April. There would be some lettings on top, but I can’t find the numbers. A slow start you would agree, but these things will take time and anyone meeting Team Bruce will realise these chaps do mean business and have the pedigree.

Look at the daddy of them all, Foxtons. I did some homework 18 months ago and looked at where Foxton’s had opened in the capital and the sort of market share they had after 12 to 18 months. When they open, its 0% all the way, but once the rarra has settled down, and after they have  taken 5% to 8% of the local market, they then just knuckle down charging their normal 12%+ management fee and 2.5% selling fees and tend to keep the same market share. 

However, the biggest issue in our industry isn’t outsiders moving in but is in fact ourselves. Successful letting agents and estate agents need to remain open to new ideas – but it scares me how many are not. You might be the most talented agent in your town, your ability as an agent might be second to none and you might have the mindset of the winner , but that means nothing at all if you aren’t willing to be taught, to learn.

Sir Clive Woodward argues that “talent is not enough” because there are bucketloads of talented competitors. He said top players, like top businessmen and women, needed to be willing to be taught — to be “sponges” instead of “rocks. Once you lose that ability, that kind of focus, the chances are you’ve become a rock and you’re not going to be competing with that person in the next room.”

What if I could teach you how to organically grow your lettings agency by 20%, even 30% within 12 to 18 months? Is it innovative ? - loads of people tell me it is, I don’t think it is. Is it disruptive? Hell no, in fact it’s softer than a tonne of silk.  If you don’t know what on Earth I am talking about, watch these two three minute videos Does it work? Look at the 30+ testimonials, then decide for self .

However, I warn you, it’s really hard work to do and whilst it doesn’t cost that much to implement either, you have to patient whilst it kicks in.

..are you a sponge or a rock?