With the exception of the introduction of the internet, history will show that covid-19 did more to change the estate agency industry than anything else.
A bold statement but one that I believe will prove to be true as we all go through a paradigm shift in our thinking and in how we operate.
In 1996 I was running a region for Connells and I personally acquired the www.connells.co.uk domain name. I started putting property on the internet but couldn’t, at that time, persuade the Board that this was the future. Four years later when I was a main Board member, we were one of the founders of a portal, that I’m sure you’ve heard of, called Rightmove!
In 2000 I completed an MBA at Reading University with a dissertation research project on the internet and its likely effects on the residential estate agency industry. This was at a time when only 61.5% of the respondents to my survey had internet access and 53.7% of those without, had no plans to obtain it!
The research concluded that the internet would become a driving force in the estate agency world and also predicted the emergence offerings such as Purplebricks, non-High Street operators and DIY execution only, commoditised services. Indeed, 53.5% of respondents said that they would be interested in a buying and selling service that removed the need to visit offices. Interestingly, at the time, and perhaps unsurprisingly, the over 55 age group were the least interested. It is now 20 years later and the younger age groups are now mature home owners and the older age groups either retired or sadly, no longer with us.
In 2003 I set up Integra Property Services and ran, what would now be called a hybrid agency. We had an office (non High Street) and covered a wider than usual territory from one location. Hindsight shows that I was too far ahead of the curve, it took longer than I anticipated for the change to occur and I was also under resourced. I ended up selling the agency part of my business to a “traditional agent” in 2008 to concentrate on mentoring, training and other support services to the industry.
The internet however has changed estate agency. It has created a 24/7 world, made the cost of entry lower, the ability to punch above one’s weight greater and has allowed new operating models to emerge, particularly reducing the need for expensive premises. However, the over reliance on the portals and CRM software systems, the reduction in interpersonal skills and blandness of offerings by many are by products that are simply creating room for those that can stand out from the crowd, differentiate and use technology to underpin their businesses, handle the “heavy lifting” but freeing up people to do the business generation, hand holding and interpersonal elements.
Some of you will know that I am a Director at teclet, the lettings platform. It compliantly automates the majority of processes in lettings and management and allows customers and clients to interact, agree actions, buy products and upload documents etc. Nearly 45% of those interactions take place outside of traditional working hours. 365/24/7 is becoming part of the “new normal”
Which brings me to Covid-19.
Everyone around the world has been caught out by the emergence and life changing severity of this terrifying pandemic. Everyone has been forced to readjust their lives and make changes in how they live, work and play.
Covid-19 will, in my opinion, be the biggest driver of change in the estate agency industry since the emergence and acceptance of the internet.
In the world of estate agency a new set of Seven Ps are emerging.
People, Premises, Portals and Proptech are four key areas. They represent the four highest areas of cost in a business and need to be made to “sweat” harder to deliver the right answers for a business looking to survive and then thrive both now and into the future.
People. How good are they? How well trained? How well rewarded? Is your current employment model the right one, particularly in a 365/24/7 world? The emergence of “self-employed” models based on “lifestyle”and “personal branding” is accelerating with covid-19 acting as a catalyst for many to change.
Premises. Are they necessary? Is remote working a possibility? Can you adapt your management to cope? I have a number of clients who, pre-Covid, made decisions to move to a hub model, consolidating several offices and creating operating efficiencies as a result. They weren’t anticipating Covid-19 but are now reaping the rewards of their decisions. Covid-19 will focus minds and accelerate a trend that was already underway.
Portals. The pages of the trade press have been dominated by the arguments and viewpoints of those that feel the major portals are “fleecing them” financially. There may be an element of truth but there has, as yet, been very little churn and many agents still promote themselves and their property registers on two, three or more. We are also seeing many new entrants (some have been around a while) – Homesearch, Boomin, Proptyle, One Dome, OpenBrix and others – they all purport to offer something different, most based around better use of data and the need to engage and monetise with the 99% plus of portal traffic that currently does not transact. Which one’s are you going to back, none, some, all?
Proptech. It is getting easier to change but it remains a big decision. Many of the existing software platforms are tired in technology terms and are over complicated, add very little to the process, do not improve compliance or good business practice and are not well enough understood or used by agents. They survive largely based on inertia. Very few provide interaction with customers and clients and most do not join up the processes and facilitate seamless working with the range of suppliers most agents currently choose to work with.
Moore’s Law effectively says that the capability of technology doubles every two years and the cost halves. What is happening in your business?
A thorough review of all four Ps is likely to result in change, a paradigm shift, and now is the time to make those moves.
Virtual viewings is a case in point. Most agents started producing videos during the lockdown period but many have resorted to just sending them to applicants and passively waiting for a reaction. Good agents use them to run accompanied viewings online as a key part of their sales funnel and are reaping success in terms of managing volumes and resources and improving results. They treat them the same as actual viewings and by accompanying them, they obtain direct feedback, build relationships and close more effective physical viewings. They also keep sellers happy by reporting outcomes.
The market is currently active and this means that many agents are likely to slip back into working the way they did pre-Covid19. That may be OK for a while but these businesses will slowly slip behind the new entrants and those that embrace change.
It is vital that looking at the four Ps leads to two new Ps. Proposition and Productivity. A proposition that differentiates you from your competition, most of whom are currently operating in a “sea of sameness” and an increase in productivity which means efficiency and effectiveness and, ultimately leads to the ultimate P. Profit!
There is, of course, an eighth P. Planning.
All of the above requires setting aside some time with a clean sheet of paper to come up with the vision and actions required to bring about the paradigm shift I refer to. Most of the above was already happening pre Covid-19 but the speed of change is undoubtedly accelerating.
Change is always difficult. Machiavelli in his epic book the Prince said: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new.”
The fact that change is challenging is not a reason to ignore it. History is littered with the corpses of those businesses who didn’t adapt, adopt and improve. Kodak, Nokia, Blockbuster and many others are examples of those who failed to make the paradigm shift.
Why would business not be adapting on an ongoing basis as they drive forward and evolve as their markets and needs demand?
When it comes to earning and spending your OWN money, instead of following a corporate dogma, innovation and change flow far more easily.
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“Moore’s Law effectively says that the capability of technology doubles every two years and the cost halves. What is happening in your business?”
This quote works nicely for almost everything – except Wrongmove!
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Is this a job pitch….:)
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Very helpful. What are you about to launch? 🙂
seriously, you missed out a few P’s that come with our brand. I will share the secret one with you.
Passion (the King of P’s) as this will bring success, research, energy, natural motivation, money and ultimately profit…
Have a great day folks.
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Excellent and well-considered article Mike. Spot on.
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A well written and thought out article.
Unfortunately there are two things that are preventing most agents taking the actions that they need. These are arrogance and noise.
In my experience most estate agents know it all. This is, of course, proven by the fact that they are really busy!
The second challenge is that of noise. There are so many people and businesses vying for attention. Consequently each of these propositions is perceived to be too expensive in terms of time or money.
The lack of consensus or stand out technology will hamper the necessary changes allowing for one or two well resourced players to establish themselves with better business models based on the full customer journey.
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Thanks Mike.
A really interesting article that raises as many questions as it answers.
I wonder what will happen in the next 20 years.
I look forward to seeing what you have to say then?
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Agency is becoming intimate again. Just the 2 p’s people and property. The stuff that’s emerging helps with that.
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Sure its all abou the managmemnt of change
Sometimes though it’s just change for change’s sake.
The obsession with being seen to be 24 /7 means that many agents are jumping on the bandwagon and effectively outsourcing “front of house” to remote third parties which are little more than gatekeepers
An evening call regarding a specific property usually gets responded to with a templated reply
“Can we offer you a free valuation”
No, I am not looking to sell just checking which of the semis in the picture is for sale as there is no floor plan uploaded which might help distinguish.
Sorry ,I am unable to answer that
.
Just going through the motions
The worst is when this operates during normal business hours as being remote they don’t even know the local area let alone the property Its frustrating that you can never access anyone who knows about a specific property quickly.
The battle hardened Gloria fronting house for me everytime .
Ah yes that will be Mrs Smith she is looking to move closer to her daughter. Beautiful roses in the rear garden ,Lovely aspect and the Jones next door very quiet .
Acacia Avenue has become very quiet since the road changes
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Enjoyed that. You were indeed way ahead of the curve and that’s a very interesting career history you have there. Great job!
If I was looking to go it alone, I’d definitely be in touch. That industry knowledge of traditional and future is valuable.
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Correct me if I’m wrong ( I’m not ) but Rightmove was actually founded by the Harry Hill led Countrywide Group back in 2000 and albeit a short time later Connells, Halifax and the then Royal Life Group etc. joined forces to grow the business and the rest is history.
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Does sound like a sales pitch. All these ‘would be’ technology is everything guy’s have caused more harm than probably good. Too much control has been lost to the extent that some win and others loose before they even get a foot through the door and is claimed its the agents own fault! Rubbish …. far too many, “you have to do it this way to survive or been in or get left out” has created a situation where many agents now over spend for little returns. RM, PB, the down slope fee’s, instructions, sales and the biggest culprit advertising far too much that you loose contact with customers before you get a chance to say hello.
The industry and all this new technology has created in many cases a reaction service. Wait for a return on having to do little!
ALL had a negative impact from such new technology not correctly controlled. Technology is a double edged sword. Can help but just as easily destroy. Most platforms do not offer you anything that you were not doing before, just making you, according to them more efficient? Some do, many others are just flowered up hype doing more harm than good.
Just look at all these internet whizz ideas … how many have gone bust or loosing £meggar millions …. the list is long and because they fell for the hype. No technology has actually replaced estate agency. The results you get is linked to the work YOU put in. Embrace technology but only if it doesn’t end up a death of a thousand cuts.
Video tours is the latest hype, one step forward and two steps backwards. Embrace it at your peril, you will lose control. A one shot chance to engage with a potential buyer. NEVER EVER allow technology to take over a salespersons responsibilities. You will go day to day waiting, losing out on opportunities and once it becomes established and the norm ….. you will go bust. You should always be in control, not allowing the customer to control you.
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“I ended up selling the agency part of my business to a “traditional agent” in 2008 to concentrate on mentoring, training and other support services to the industry.”
Another pontificater who by his own admission failed.
Those who can do do – those who cannot go into training
“Hindsight shows that I was too far ahead of the curve”
Absolutely brilliant LOL
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Love the range of comments the article has generated. Thank you.
Not a sales pitch for anything – just some views – if you agree (many do) that’s fine. If you don’t that’s fine too.
History will be written by the winners.
The important thing was to open up the discussion and perhaps make people think a little. I personally see a lot of agents hoping to slip back into their familiar ways – that’s fine if it is a conscious strategy – my own view is that covid19 is a catalyst for change and we will look back and see that it was significant in driving various new initiatives forward in the same way that the arrival of the internet has altered they way we do virtually (excuse pun) everything.
in regards Rightmove. It was indeed originally owned by Countrywide and was going to be their own site. However Harry Hill and others had the foresight to see greater potential in an aggregator portal and it was developed and launched with Connells and others as shareholders.
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Just for clarity on my views on the “Proptech” point.
I state that technology should be used to do the “heavy lifting” in order to free the time and resources to have people handling the relationship elements.
It is not a question of “Proptech” or people but how one can harness the two successfully to improve outcomes.
If technology wasn’t used in this way we’d still have petrol pump attendants, not be buying from Amazon, not downloading video, not using ATMs etc.
I feel there may well will be less jobs in the industry in the future but new roles will be created and those that are most efficient and effective will prosper more than they do now.
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future of estate agency
Mobile phoned based, no office at all, marketing via social media will be as important as a property portal, sales progression linked via software.
Agency fee’s may become a thing of the past if it’s all managed by an App with a one off fee to include EPC and floor plans.
Instead the Estate agent may manage a select portfolio or sales and a larger portfolio of lettings plus a secondary search service on behalf of buyers.
How much this will come true in 20 years? No idea I’ll be 6ft under or at least one foot in !!!
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