Will Agents’ Mutual members ditch Rightmove or Zoopla?

| Rosalind Renshaw

Thought piece: by Rayhan Rafiq Omar 

Signed up to Agents’ Mutual? If so, then the question facing you is: which other portal to keep paying?

As a start-up with no product, no brand and no audience, Agents’ Mutual is an incredible success with committed seed capital of approximately £6m.

However, the 1,800-plus branches already signed up have a decision to make: which of Rightmove and Zoopla do they keep?

Agents’ Mutual was set up to split the duopoloy currently squeezing agents for ever-higher membership dues. This week, both have reported increased spends by agents.

The theory is that an agent-owned portal, which restricts members to use only one other portal, would restore some power for agents to at least taper the price increases levied by market leader Rightmove and the number two UK property portal Zoopla.

If agents look at their decision rationally, an analysis would take two things into account:

* Audience:

Agents pay portals for marketing property to the public. Rightmove has in excess of double the web audience of Zoopla and anecdotal evidence suggests a larger lead in mobile/tablet audience. Can agents sensibly justify losing such exposure?

* Return on investment:

My own experience is that Rightmove is proven to provide tenant and buyer leads that convert into deals. Let me explain.

Holmes, my family’s lettings agency, manages over 100 residential properties across west London and has been with both Rightmove and Zoopla for over three years.

At Easter, I conducted an exercise to see where our current sitting tenants had come from. The results were startling:

45% from referrals

32% from Rightmove

11% from other agents

0% from Zoopla

0% from visiting our offices

Our return on investment, paying Zoopla thousands of pounds, has been an astonishing zero.

Also, note that none came through the door of our shop front on Lavender Hill, which used to be the major thoroughfare for over 30 estate and lettings agents.

I’m certain other agents around the country are performing the same exercise. Their results probably aren’t as stark as ours, especially considering our lack of estate agency (sales).

But this is the puzzling part: we get tenant leads from Zoopla. As many as Rightmove. Daily. But none pan out. Few of them actually book viewings. None make offers.

Zoopla sends a lot of leads to ‘all agents in an area’ so many are speculative, unqualified and potentially not even really looking. Rightmove’s leads are property specific and usually come with both a phone number and a message from the person wishing to view that property.

I’d be interested to hear/see the results from other agencies conducting a similar analysis.

If there is a similar pattern, what does Zoopla do?

Zoopla CEO Alex Chesterman has created incredible value for himself and his investors in a relatively short six years: £1.3bn worth of value, according to reports in the Financial Times.

In my view, he has also proven that companies do not need to innovate to create value.

Zoopla started in 2007/8 as a pay-per-lead portal before a pivot to clone Rightmove’s subscription based business model.

With some shrewd mergers and acquisitions, Alex Chesterman hoovered up all the portal competition and turned Zoopla into the online property partner of choice for many major UK newspapers including the Evening Standard, Trinity Mirror and (major shareholder) Daily Mail.

With Zoopla now the number two property portal by default, equity analysts value Zoopla favourably with Rightmove (priced at a high valuation in relation to earnings).

And rightly so: Rightmove is phenomenally profitable and Zoopla’s website and business model are close to being identical.

Zoopla currently generates significant cash: £38.3m over the last six months, according to its results this week.

So, will the Agents’ Mutual defections dent this recurring revenue?

And if so, will the loss of momentum dent consumer confidence and halt Zoopla’s growth?

Also, with no more property websites like Propertyfinder and Findaproperty to acquire, as far as I can see, where does Alex Chesterman steer the Zoopla ship to next?

One thing is for certain. With Rightmove holding what looks like an unassailable position right now, it will take Agents’ Mutual time, money and effort to gain consumer recognition.

My final thought. If many agents do indeed leave Zoopla for Agents’ Mutual, will they be destroying a duopoly just to hand Rightmove a monopoly?

rayan

Rayhan Rafiq Omar (@rayhanrafiq) is founder of property tech start-up Wigwamm, which operates from the basement beneath his family’s property management business on Lavender Hill, SW11. His views are his own.

 

 

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21 Comments

  1. Paull
    May 13, 2014 at 06:17

    Is it only RM and Z that agents have to choose between? What about all the other websites in operation listing properties?

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  2. Ric
    May 13, 2014 at 06:21

    Both, ditch both…. simpools….

    No property, no-one will visit – Buyers WILL follow the property, they care not it is Rightmove or Zoopla; simply that the vast majority of property is on there AND this is the ONLY reason they visit the sites.

    "he/she who has the most property will be successful in the property portal world" nothing else……

    Roll on year end…… lets get promoting AM and make it work… we've moaned long enough about RM and fees; this is our LAST real chance to do it, lets not fluff it……

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    1. PeeBee
      May 13, 2014 at 11:58

      Ric – hey, mon ami – long time no type!!

      Great to see you back posting. Your comments were a miss over on 'The Other Side'.

      Unfortunately, however, I'm gonna start our reunion by disagreeing with you. Sort of. A bit.

      You say "No property, no-one will visit – Buyers WILL follow the property, they care not it is Rightmove or Zoopla; simply that the vast majority of property is on there AND this is the ONLY reason they visit the sites." In essence, that is true. HOWEVER… it is the SELLERS who will have a free choice over where their property is posted on t'interweb, therefore, in my opinion, THEY will control the game.

      Back in the day, when RM first hit the streets, it was promoted by Agents as THE way forward to sell your home. It was a USP in the early days, as only some Agents risked it. They grew to rely on it as an instruction-getter – and one that actually WORKED – which, for the rest, became clear that you have to be in it to win it – so they joined up over the course of time.

      WE fed the animal, Ric. We groomed it; pampered it; and put it on the Winners' pedestal at Crufts for all to admire. What we DIDN'T do, is learn to control it.

      As a show dog – it walks away with every medal – EXCEPT obedience.

      Whose fault is that?

      (not the pooch, in my opinion… 😉 )

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      1. Paul H
        May 13, 2014 at 12:27

        Up until about two years ago everyone in London used the gumtree, not anymore, literally overnight we got no leads from it, not sure what happened but the leads just stopped.

        It didn't work out too well for Ratners, literally overnight their brand was diminished. Same as the sun newspaper when it closed down after how many years?

        The consumer will show no loyalty whatsoever to Rightmove or Zoopla they will be dropped in a heartbeat when they realise that no properties are on that site. You can imagine it on a val now….

        Customer…"Do you advertise on Zoopla"

        Agent…."No one uses that anymore, instead we are on Agents mutual".

        We did indeed feed the animal, it's just time to feed a different one, and one that we can control.

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        1. PeeBee
          May 13, 2014 at 17:33

          Paul H

          "It didn't work out too well for Ratners, literally overnight their brand was diminished."

          Yeah – because THE OWNER told his client base they were cr@p! Please compare eggs with eggs, matey…

          "We did indeed feed the animal, it's just time to feed a different one, and one that we can control."

          But the animal is what the people come to see, matey. They might not want to see a new animal. They might not like it.

          And if someone else in your town (or sitting somewhere in cyberspace or in a serviced office in Chipping Sodbury – it matters not, apparently…) is still feeding the original one…

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  3. TPS
    May 13, 2014 at 06:29

    A very interesting piece.
    In response to Rayhans request for comment, my decision process will be based on similar analysis with, it has to be said, a similar outcome however the reason I currently even advertise with Zoopla at all is somewhat different.
    In regards to the latter, its fairly simple and a classic example of an agent pandering to the market and being part and parcel of the creation of the rightzoop duopoly…I adversities with both portals as all of my main competitors do. To not do so would give them a fairly big stick to beat me with in what is a tenacious market.
    In regards to which portal I will ditch at the year end, based on current research, it would be Zoopla by a mile. Simple isn't it…well, no in fact it isn't.
    Whilst the actual business received from Zoopla falls someway short of what is generated from RM, many "users" do prefer the functionality of Zoopla and to use marketing speak "the look and feel" of the site. Lettings enquiries via Z are significantly higher than that received from RM , particularly when it comes to tenant enquiries. The choice of portal seems to be regional. On stats I have seen from RM they have the country broken down by region with each gauged on their market share against Z. In most areas in the south it would appear that RM are in pole however there are areas where this is not the case and I imagine that, across the country, a similar picture will develop. This will potentially lead to RM or Z remaining strong in certain pockets but considerably weaker in others.
    The real proof of the pudding will come when I and many other agents need to push the button in regards to making the choice at the year end in regards to which portal to step away from. The prime concern at that time to me and many others will be not which agents ditch which site but more about which agents, in my areas of operation, do not join AM and therefore retain a potential (albeit we hope short lived) USP over us.
    There is still much to think about and discuss when it comes to AM and I just hope that their marketing machine gains more momentum over the coming months as there is a surprisingly large number of agents, good and bad, that are barely aware of its proposition.

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  4. Trevor Mealham
    May 13, 2014 at 07:14

    Rayhan, you really have 'sitting tenants' 🙂 gosh thought they died out years ago.

    As for the £1.3bn value on zoopla. Whats its turnover and multiply by 11?

    And if the poll of 0% from zoopla above was correct, it would have very short life ahead.

    RM vs Zoopla? Ask agents in different areas around the UK and views vary. Don't forget many upper agents still like Primelocation.

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    1. Trevor Mealham
      May 13, 2014 at 07:15

      In fact, If zoopla gives 0% return WHY are you paying a subscription to it each month?

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  5. wilko
    May 13, 2014 at 08:40

    Zoopla first. Rightmove second (in about 2 years).
    Simples.

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  6. Paul H
    May 13, 2014 at 09:03

    I'm genuinely 50/50 at the moment and will make my decision around October time. Although I will definitely be on only AM by January 2016.

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    1. wilko
      May 13, 2014 at 14:57

      I think deep down, you know (like the majority of us) it will be Zoopla (the betamax of portals) first, followed by Rightmove (a little more longevity for the VHS of the portals)…….leaving AM…(the DVD of portals) to be the main portal for a good while.
      I haven't got a "digital" equivalent yet?

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      1. PeeBee
        May 13, 2014 at 17:36

        wilko –
        "…leaving AM…(the DVD of portals) to be the main portal for a good while."

        Yeah – for at least a month – until the Blu-Ray of portals is prostituted around… 😉

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        1. wilko
          May 13, 2014 at 23:29

          Sorry…I forgot about blu ray!

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  7. CLG
    May 13, 2014 at 09:05

    We collected the same sort of data for a year and found that Rightmove far outstripped Zoopla (and all the other portals) in terms of quality leads.

    Though, for all the bashing Rightmove receives for their charges, I was at an AM meeting in London and found that we pay lees for our Rightmove lettings membership than what AM was quoting for their.

    While I like the AM idea I just feel they will struggle to get their name recognised by the general public.

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  8. mauricekilbride
    May 13, 2014 at 13:24

    An interesting debate as always but as one commented earlier, the only way Agent Mutual will ever work is if all agents come of both RM & Zoopla, dispense with all promotional material, logos and branding and just promote AM to all their clients, buyers, sellers, landlords and tenants. As was mentioned before buyers have no loyalty and will go where there properties are. It is that simple.

    In reality is that likely to happen? No- because agents are scared to come off and worried it will become a private listing site.

    So unless agents grow a pair as opposed to just moaning and grasp this opportunity to wrestle a degree of control back from the large portals, I fear AM is doomed to failure before it even starts.

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    1. wilko
      May 13, 2014 at 14:52

      Like I've said a few times today…..we have all moved on from the "agents are scared to drop a portal(s)" scenario we used to discuss that ages ago!……fact is there WILL BE approx half a MILLION new properties coming onto the market next year (and every year after) with AM agents that will NOT be on both Zoopla and Rightmove. People looking for a property/selling a property WILL look at AM, they will have to if they don't want to miss out…..oh and 2300 odd branches have grown
      a pair and stopped moaning ages ago…..perhaps you should consider?
      Those that continue with their existing duopoly comfort blanket / crutch.
      will be old hat come March next year. Fact.

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  9. MF
    May 13, 2014 at 13:59

    The Agents' Mutual portal will need to be as good as RM's and Z's from the word go.

    So, I'm a Londoner. I live and work in London and I have rightmove and Zoopla advertising slapped in my face in just about every direction I look. And now I actually need to find a property so where do I start? Rightmove and Zoopla of course. I find some properties I like and I make contact with the agents to arrange viewings. But now, there is no more Rightmove and Zoopla. All the agents talk about is Agents' Mutual. And I cannot see rightmove or Zoopla mentioned anywhere in their offices, their emails and websites; absolutely nowhere. Just Agents' Mutual. So I decide to take a look at the Agents' Mutual website….. And then as time goes on, I realise that the majority of other estate and letting agents have also fallen silent on rightmove and Zoopla, but are shouting about Agents' Mutual. In their windows, on their websites, everywhere. So I compare the listings between these 3 portals in my chosen area…

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    1. Paul H
      May 13, 2014 at 19:51

      Precisely MF…10 years of advertising by rightmove will mean nothing, zero, zilch if there are no properties on their website to look at. The consumer couldn't give a flying **** about what name they type in to their iPhone…rightmove and Zoopla will be replaced in no time and by a company that instead of being concerned by the amount of ever increasing dividends paid to their shareholders will instead care about the agents/businesses that actually pay to be on it.

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  10. Not you again...
    May 23, 2014 at 10:48

    Given the profit levels reported by RM and Z is there any danger that they could afford to simply discount their prices so heavily in 2015 that all the undecided agents are tempted to remain on board until AM fall by the wayside? If this occurs then AM will not be able to claim the majority of properties are only available via them and clients will continue to demand that agents use both RM and Z. If we want to truly have control of our 'pet' then we may have to be prepared to kill off the opposition no matter what it appears to be costing, and even if heavy discounts come into play. The problem is, I have never once seen any group of agents prepared to cooperate for their mutual benefit – there is always someone who breaks the deal to feather their own nest.

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  11. Taff
    May 25, 2014 at 14:49

    In South West Wales the AM agents have formed a "marketing group" to decide en-masse which portal to ditch. A small committee have met up with both Zoopla and Rightmove to see what they propose charging all the AM agents in SW Wales post Jan 2015. Based on what they suggest, we will make a decision. The advantage as far as I can see is that after Jan 1st 2015 there will be next to no properties in SW Wales on one of those sites – and several agents have suggested dropping BOTH and concentrating soleley on AM. There is no reason why there can't be say a North Wales marketing group, a West Country marketing group, a Midlands marketing group or a marketing group covering any other region as far as I can see.

    As for RM or Zoopla possibly becoming a private listing site; so what? Crack on! Whose going to value the properties, who is going to write up the details, take the photos, arrange viewings, who is going to get feedback, deal with the negotiations, instruct solicitors, oil the cogs of the sale through to exchange etc? If the public genuinely think it was that easy, they would be selling their own properties privately NOW. And if an owner wanted to instruct me AND advertise privately on RM or Z then I will be charging our higher multiple rate if / when I sell it.

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  12. nobrainer
    June 11, 2014 at 12:13

    Can't agree more with the South West Wales Agent. Other areas within the country need to copy this example. Get the vast majority of agents in your area on board in principle and stick together, negotiate a package of so many agents. SW Wales is in excess I believe of 100+ branches. We have grown a pair its up to the rest of the agents around the country to do the same.
    If the vast majority of agents are singing off the same hymn sheet it can not fail.
    We all need to spread the gospel.

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