02 Apr The Balance of Power for Estate Agency.
The Balance of Power for Estate Agency - where it should be weighted?
An interview with Michael Bruce, on Prime Resi, to mark the launch of the challenger portal, Boomin, headlines with:
"Michael Bruce on his big plan to 'reset the balance of power in the property industry.'
As Michael Foucault has said: "Where there is power, there is resistance."
Problem is, that the balance of power will reset from Rightmove and Zoopla, not to where it should lie with the agents themselves, but will shift from Rightmove to Mr. Bruce. Wrapping that cold, hard fact in a story of empathy towards the plight of agencies is straight from the confusion playbook. If this is a race for agencies to find the second least trusted portal, it's not really a race they need to run.
Let's dig deeper on that interview.
Q. "Why do you think PurpleBricks has prospered in the U.K while so many online agents have struggled?
A. "We were the only one that had all the critical elements for success. Technology, people, funding and a strong well-known brand."
Def: Prosper: "to succeed in an enterprise or activity, especially to achieve economic success." - Merriam-Webster.
It's a stretch of the imagination to believe that PurpleBricks has prospered, given the historical losses of the company and the tsunami of initial complaints about the service offered. Exit stage left with a chunk of change, the founders.
Q. "You're about to launch your new venture, Boomin; what was the genesis for this business and how has the idea evolved since that spark?"
A. "I believe passionately in competition & using technology to challenge industries that have grown tired & complacent..."
"I believe passionately in competition" - remember that phrase, as later in this critique, I will recall those precise words.
For now, I prefer the quote from billionaire entrepreneur, Peter Thiel (founder PayPal and first outside investor in Facebook) : "Competition is for Losers."
For estate agencies, competition has been drilled into them by every man & his dog. Resulting in a commodity industry where none but the few stand out.
Portals are no different. Classified ad displays; tiny heads and tiny houses. Where's the high resolution imagery, the Matterport 3D virtual tours and the smart technology that lets buyers view the listing on their big-screen T.V? That creates a better experience and happier customers - not some agency flogging ad-ons' for a few extra pence. You won't find 'happier' on the portals.
Q. "What makes Boomin different to existing portals?"
A. "There are three fundamental points of difference. Firstly, creating a portal for the home and not just a listing site. Secondly, by offering a broader service, we are able to establish agent/vendor relationships that last beyond the property transaction. Thirdly, these additional goods/services will generate fees which we share with registered agents."
"Creating a portal for the home and not just another listing site." - what on earth does that mean? A listing site with two or three easily replicated 'features' doesn't make it different. It makes it 'better'. It's still a portal.
"Able to establish agent/vendor relationships that last beyond the property transaction." Are agents so insular that they can't do that themselves? Can't offer additional services themselves? Can't think for themselves? Mr.Bruce seems to imagine they are and so, generously, offers to share the fee. Wow!!
He continues, and this is a killer, "Unlike the existing portals, who essentially have one revenue source - agents- our aim is to return in loyalty fees more money back to the agents than they ever pay for use of our platform."
Are Rightmove aware, I wonder, whether the fee from agencies is their ONLY source of revenue? Might they not have considered advertising as an additional source of revenue?
"When you advertise your brand, or your client's brand, on Rightmove you're put in front of a huge UK audience which covers a broad demographic and is easily defined by their search habits." - Rightmove.
Seems they have.
What Mr. Bruce is effectively claiming is that the Boomin portal might hopefully be available free - once the up-sell of services by agents has been calculated. Free portals aren't new and don't reset the balance of power in the industry.
Q. "What did O.T.M get right & wrong?"
A. "I think the trouble with all the challengers to date is that they have merely replicated what already exists, rather than re-imagining what is possible with the latest technology. They have also lacked the cut-through with the public, failing to appeal to the public en-masse."
If that's the re-imagining for Boomin, if that's the vivid vision, it's pretty lame. Appealing to the public en-masse isn't a claim that would stand the test if applied to Mr. Bruce's previous venture. It might have appealed to those vendors that don't mind what the service looks like so long as it isn't entirely broken. It might have appealed to agents that jump from agency to agency without ever wondering why they can't find a cultural fit. But one thing it didn't do was to appeal to the masses. That exercise looks like repeating itself with the advent of unremarkable T.V ads that have absolutely no message. It will attract the very same people at the lower end of the market who understand price, but not value.
Q. "Strong competition is clearly beneficial to consumers in most instances, but doesn't having more property portals - featuring many but not all of the same listings - make it more complicated and less efficient for buyers, sellers and agents?"
A. "The pips are already squeaking with the winner takes all mentality that has been allowed to perpetuate for so long.
"I believe passionately in competition" - those were the words said by Mr. Bruce at the start of this article.
And yet now, he infers that a "winner take all mentality has been allowed to perpetuate for so long". As though, it shouldn't!
Logical thought and congruent speech should be the hallmark of any former Lawyer and yet here we have him proclaiming that competition has been perpetuated for portals, yet in the same breath stating that "I believe passionately in competition."
Which is it? I think we should be told the truth.
He continues with an analysis of Rightmove's gross margins - "75 pence in every pound it takes from agents. Five times the margin earned by the most successful agencies in a good year." Do I detect a hint of jealousy underneath that mask of righteousness?
Much of the article continues with a re-hash of what is considered to be the differentiation and emphasis on the free first year for agents signing up to Boomin. Does anyone still believe there is such thing as a "Free Meal?"
Agents will pay for it sooner, or later. One way, or another.
Q. "What was the best piece of advice you have ever been given?"
A. "Anyone who is motivated by money generally never has any because money is a by (sic) product of who you are, what you do and how you do it."
Ironic, really. When estate agency, aside from a few, is following the ' millionaire-mindset' hustle, one that has enriched himself and colleagues, with other people's money, should have the audacity to lecture those agents on character.
Where there is power, there is resistance.
Rightmove has endured that resistance and come out the other side, some would say stronger.
Boomin will meet that resistance in the coming twelve months.
The question agencies have to ask is not whether there needs a "reset the balance of power", but to who should that power be reset?
I have my opinion.
Consumers and agencies alike jumped on the bandwagon when portals first surfaced.
For agencies, they bought into the story that the more people who see a listing, the greater the chance of that listing being sold. They became evangelists for the portals because it offered an easy option to increase visibility. Little understanding the power they were giving away for free and the lie being perpetuated. Now they do!!
For consumers, the portals were the equivalent of a shopping mall, instead of a single boutique. Great for browsing, but clunky and visually uninspiring. There has been little innovation in this area for decades. Buyers/sellers don't need portals, they need a long-tail search engine and Boomin/Rightmove and Zoopla etc. can't provide it.
Ask for a property in a specific road, with specific features, at a specific price and buyers are presented with a long list of 'possibles'. Each competing with the next for attention. Where every click on the image is another notch on the portal's evidence that it is highly visible.
There's a platform that is a search engine and it's not a portal. It uses the world's best search engine in Google and all the smart technology that comes with that link-up. It offers technology that Boomin and others could only dream of, if they managed to stop for one minute the incessant belief that power lies with the strong.
It's a platform that instantly re-directs a buyer back to the agents' website. Not one that captures attention, protects it and sells it to the highest bidder. That - that re-sets the balance of power. One hundred per cent in favor of the individual agency. That isn't only better. It's truly different.
Homeowners have had property portals up to here. They need something simple and a search option that does precisely what they ask of it.
If you're interested, the link is here.
It needs work, but it will do the job far better and it needs the support of fair-minded, forward-thinking agents to make that happen.
A move, somewhat, away from my usual passion of personal brand and story. But, I believe the future for estate agency is built on hyper-local and building a media business that they own. One that drives relationships at the front-end to their agency at the back-end. Turning each agent, or branch, into a micro-celebrity.
There lies the balance of power. Not on some me-too portal that positions itself as a savior.
Thanks for reading, as always.