Purplebricks under pressure to grow – with fewer staff
Having thrown millions of pounds at its marketing, Purplebricks finds itself in stagnant waters, under pressure from shareholders to grow and yet shedding staff, resulting in a very disgruntled workforce.
Its territory owners were sold the dream that after five years they could sell their territory. Instead, 50 of them including senior managers have now been given the heave-ho or demoted, after giving their all to make the UK operation successful.
In CEO Vic Darvey’s own words, it was necessary to ‘correct’ the business. How awful to know that your role was simply a mistake.
Territory owners have spoken publicly about broken promises and shoddy treatment, with one suggesting that a group is being formed to consider litigation.
The Purplebricks business model, with its failed forays into the U.S. and Australia, was simply unsustainable as it was, and now their UK model is under serious scrutiny for failing its shareholders and property agents. The share price, as I write, has dropped to 105p.
The last thing a business should do is alienate its foot soldiers at a time when its growth has plateaued, even if its UK operation is profitable. I expect those let go will be gunning for Purplebricks.
It will also be interesting to see what happens to its one remaining overseas territory, Canada, where staff were at one point incentivised with paid days off in return for fake five star reviews.
Purplebricks has managed to fend off competition by sheer force of spending power. But can Vic Darvey control the disgruntled masses or will this tech entrepreneur be wishing he’d chosen an entirely different sector to work in instead?
Have we all inadvertently become Rightmove ‘employees’?
Rightmove’s dominance as a portal continues to grow – yet at what cost to estate agents? We appear to be sacrificing a large part of our own profits to strengthen its own position in the marketplace.
How have we allowed this to happen? We’re attached like an umbilical cord that most agents are reluctant to sever. Just think, if you’ve got a Rightmove-branded open and closed sign on your door, you’ve been advertising them without even thinking about it!
But are they delivering any more for their increased fees? Some agents have been openly comparing notes about what they pay to the three main portals and it has become clear that Rightmove charges many branches more than double that of Zoopla and OnTheMarket but without twice as many leads to show for it.
Rightmove’s average monthly fee now stands at £1077 per listings branch, with many agents paying much more depending on the package they’re on. And it keeps cranking up. Take a look at what you paid them three years ago compared to now and ask yourself if you’ve seen a corresponding increase in leads.
Rightmove reported a 3% drop in agency member branches, from 17,328 in June 2019 compared to 16,768 at the beginning of the year, describing them as ‘low stock’ branches. I note in their 2016 half yearly report, they had 17,534 branches.
How many of these have closed, I wonder?
And how many have simply jumped ship to the other portals because of the fees? Is this the start of the exodus, as agencies are now openly questioning the value they are receiving?
It’s hard for any agency, my own included, to know whether that income could be better spent elsewhere and drive more leads or if we’d be missing out by pulling it. But we’ve all seen how quickly newspaper advertising has slipped off the radar for most agents.
Surely the question must now be, how long has Rightmove got before agents take the plunge and spend their hard-earned pounds on other marketing channels instead?
* Paul Smith is CEO of independent estate agency chain Spicerhaart
Paul, grow a pair and serve notice on Rightmove rather than wondering what might be.
Use your own website and database to sell your stock and invest the savings from ditching rm into your own branding and brand awareness.
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Perhaps Paul will divulge what he is paying RM per branch?? It will probably all make sense then!
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I never understand why agents are advertising other peoples brands (RM, Z, OTM) on their windows, letterhead, websites etc – the only brand you need to advertise is yours.
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I keep saying that to Ralph Lauren.
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What we need is agents to get together and sign agreements to leave if everyone else does. You show me yours and I’ll show you mine. We would need to be very careful of any cartel complaint but it would actually be quite simple to do – if the idea could gain legs. You try to find an agent who really wants to pay £1,000s a month to Wrongmove
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no one has the minerals to do it and will keep just moaning
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Join OTM and use social media forget RM you don’t need them they need you! for £1000 a month you could blanket leaflet drop thousands of properties every week. RMEXIT
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RM know they have you by the short and curlies
Spicerhaart won’t leave any sooner than any other regional or corporate
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Estate agents are selfish by nature and too arrogant as a whole to do anything together that might give anyone a competitive advantage in their eyes. RM knows this and ruthlessly exploits it to the maximum to the detriment of their victims (sorry, agents).
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The truth in plain sight.
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Paul,
We are about to not list any new properties through Rightmove for one month, just Zoopla and OTM to see if we get the leads from elsewhere if they are not on RM.
We are just leaving existing stock there during this time.
Care to join us?
If not where is your breaking point, this price increase, the next?
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This is absolutely spot on – they have never been able to work for their own common good; and never will.
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Your article was nauseatingly anti-PB. It almost comes across as pandering? Don’t worry, I fixed it!
Purplebricks under pressure to grow – with fewer staff
Having thrown millions of pounds at its marketing, Purplebricks finds itself Making a steady profit year on year. Under pressure from shareholders to grow, they are trimming the fat by letting go of long-serving under performers.
These territory owners hoped that after five years they could sell their territory. Instead, 50 of them including senior managers have failed to add value to their own businesses and have been let go or demoted. Although, their contribution to make the UK operation successful cannot be ignored.
In CEO Vic Darvey’s own words, it was necessary to ‘correct’ the business. This attitude of progression is a clear sign of a profit-driven business to many current and potential investors.
Previous Territory owners have spoken publicly about broken promises and shoddy treatment, with one suggesting that a group is being formed to consider litigation.
The Purplebricks business model, with its unsustainable forays into the U.S. and Australia, is now under serious scrutiny in their UK branches for failing to meet shareholder targets. The share price, as I write, has dropped to 105p (Although I will point out that share price is not directly related to investor return, as many believe).
At a time when its growth has plateaued, while it may upset some, difficult cuts must be made even if its UK operation is profitable. I expect those let go will be gunning for Purplebricks.
It will also be interesting to see what happens to its one remaining overseas territory, Canada, where staff were at one point incentivised with paid days off in return for fake five star reviews. This should serve as a reminder that dishonest business practices, endemic in our industry, will be found out.
Purplebricks has managed to fend off competition by sheer force of spending power. But can Vic Darvey control the disgruntled under-performers or will this tech entrepreneur be wishing he’d chosen an entirely different sector to work in instead?
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You are wrong on a few things there. They let go the best of the best territory owners because they are the ones who remember how good it was, not due to ‘under performance’.
Have you seen the new contracts?
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I have never seen, heard of or experienced a business that legitimately did away with its best performers for any reason, other than inter-personal politics between individuals. Fear that they “know how good it used to be” makes no business sense and I doubt it played a part. All employees accuse their business of going downhill at some point, it is expected by most in my opinion.
I can’t honestly say that I have, do you mean contracts since the deluge or just more recent ones (e.g. from 2019)?
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How about Countrywide under Ms Platt?
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Who are you AlOnline???A PB insider I suspect! They didn’t get rid of the under performers as you and Vic would like people to believe. The original TOs were hand picked and had built their territories from scratch. They had to be successful over a period of time(years)to make any money. PB management got rid of the TOs who began to object to the dishonest practice that they were encouraging. Many more LPEs and ex TOs plan to leave by the end of the week if they are able to find another job…
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ALOnline
February 25, 2020 at 09:55 #15
I have never seen, heard of or experienced a business that legitimately did away with its best performers for any reason, other than inter-personal politics between individuals. Fear that they “know how good it used to be” makes no business sense and I doubt it played a part. All employees accuse their business of going downhill at some point, it is expected by most in my opinion.
Well ALOnline, you now have heard of a business that legitimately did!! I watched them cut every high achiever down in OZ despite the fact that they claimed at the start that they wanted us to do well and grow the business. The number of things that PB did that made no sense was staggering. You see, PB was set up as a vehicle for Michael and Kenny to personally make a fortune as quickly as possible and bailout, so that’s why it has no long term strategy that makes sense.
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You do know you’re not getting the twenty minutes it took you to think up and post this stuff back, right?
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No, but it was a bit of fun
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Interesting comments! Let’s actually look at the truth, Vic and his new squad of mates leading PB have decided to reduce the number of territory owners down and when questioned on how they decided who was to stay rather than sending their shiney new ‘divisional sales directors’ out into the field to work out who was doing a good job they went on who was good at licking the new bosses backsides and who the old and now sacked regional directors liked the most! The whole new plan feels like it’s been thrown together down the pub on the back of a receipt after a few pints. The head office is a shambles with CPEs leaving left right and centre, Huge areas are now being switched off, some lpes have two different ‘territory operators’ and two/three divisional directors (whatever that means) all this has done in reality has thrown a lot of decent agents who bled purple and loved the Bruce’s out into the world to scream from the roof tops how terrible Purplebricks are now! 10-15 new agents have opened up within weeks of the decision being made and market share for PB is already dropping along with the share price!!! Hilarious to watch. Can’t wait to see what they decide to do next maybe they’ll open a purple pet shop and give out free gold fish with each house?
Vic is already teeing up to get Alexa Valuing houses Hahahaha
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Everything that’s occurring in the UK is exactly what happened in OZ 6 months before they pulled the pin.
PB is about to POP!
Michael and Kenny pulled this game off so well it’s incredible.
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Why does Paul submit these articles every month then never converse with people on the post?
One can only assume its ego driven so he can say he is ‘Published’
Why not engage with people on here?
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I have suggested on numerous occasions that we start a national ‘DITCH RM DAY’ and see what sort of momentum it gains.
How about November 5th 2020?
RM couldn’t ignore this if it gained sufficient momentum. I don’t want them gone. They do an ok job. I just don’t want to contribute to their greedy profit margins, when my margins are squeezed so hard.
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It’s against the law……..
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Is it though with a commercial entity like Rightmove vis a vis the bruhaha about the price fixing to consumers?
Is it not more like a rural community pooling as a co-op to get cheaper oil or LPG?
If the CMA sided with Rightmove I give up, we might as well be Wilder to their Fury.
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Which law?
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Just like countrywide, Rightmove will crash and burn eventually. You don’t treat people how they have treated agents and come out of it alive. Driven by pure greed and and blatant disrespect towards every agent, their days will end.
Countrywide are the perfect example, but Rightmove decided not to learn from their mistakes!!
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Gosh founding Director of OTM doesn’t like RM……….
In other news water makes things wet.
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Sorry to be a pedant but that would be news; water isn’t wet.
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I’m surprised Paul and haart need Rightmove with FLINK…
/sarcasm
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Thankfully you waited until now to post, if that had been first thing and I had my morning coffee on me it would have been sprayed all over the desk.
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Idea-LSL/Countrywide or whatever they will be called(ideas on a postcard please-I have one but my post would be removed ),Connells group,Spicerhaart ,Purplebricks-all get together-launch a new “righmove” or buy OTM /float-refloat and cash in -why,why cant they do that ?
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Because I don’t want anything to do with em, paper tigers ( Connells get a pass ) and nowhere near as good as indies in virtually any town, city or rural in the UK.
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There was once a dog in a porch that kept whining. When the owner was asked why the dog moaned so much, the owner stated “he is lying on a nail!”
When asked “if he is lying on a nail, why doesnt he move?”
Answer “because its only painful enough for him to moan, not move”
Currently we are all dogs moaning, its painful, but not enough to move, in numbers anyway.
I was intrigued by a line in a previous article which asks why agents arent spending the money from rightmove on their own advertising? I guess the answer is that RM is so expensive now.
Years ago, £000’s per month was spent on newspaper adverts, now £0! where has all that spend gone to? why not look at social media and aim your brand (not the properties) at those who want to list, the buyers will come if you have the properties to sell.
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