The boss of one of the UK’s largest regional chains has rejected offering any online strategy – on the basis that he cannot see how it can make any money.
David Lench, group managing director of 120-branch Arun Estates in the south, has also made it clear that while it will stick to the high street, it will not be compromised on its commission rates.
Instead, the business will position itself as offering premium brands.
Lench told staff at the annual conference: “We have looked at a number of online propositions but we can’t see how we can make money out of any of them.”
At the same time, he added, “The traditional model also looks fragile as agents continue to reduce the commission rate they charge.
“We don’t want to be part of that either.”
Lench, whose firm trades under the names of Douglas Allen in east London and Essex, Ward & Partners in Kent, Cubitt & West in Surrey, Sussex and Hampshire and Pittis on the Isle of Wight, said that Arun’s solution would be to deliver more services.
These will include advanced Virtual Reality, which has already been successfully trialled and is due to be rolled out across the whole group next month; 24/7 Live Chat online; and the employment of sales progressors in all offices rather than via a call centre.
There will also be new TV advertising due to launch in February; and OnTheMarket listings (subject to the IPO).
Arun is also about to launch a new brand in south east London.
The staff conference concluded with an evening awards bash, with both top office titles going to Ward & Parnters – Lettings to the Medway branch, and Sales to Strood.
Comments (25)
Personally I think they need to adopt a virtual strategy because if they keep haemorrhaging staff they’ll only be left with robots. But you expect that from the old boys club, they need to find their way in the modern world or perish.
I agree Mike. The race to the bottom with fees will inevitably be matched with a race to the bottom for service and the consumer will suffer.
There has never been a time when it’s been more important to differentiate a premium service and what that can truly mean to a customer, both in terms of being better off financially and emotionally, and the upfronters.
Apple, John Lewis/Waitrose, etc. all prove that where value is perceived a premium will be paid.
Well done Arun for a refreshing take on the current challenges, everyone benefits by raising the bar in the industry!
Well said.
As always sound direction from a businessman who runs a highly profitable and successful business and has done so consistently for many years. Why any ‘normal’ business‘ would back a strategy (if you can call it that) that doesn’t make any money: and on the face of it is unlikely to ever do so, flies in the face of any reasonable logic.
Even if the ‘strategy’ is cloaked as a ‘sprat to catch a mackerel’, I’ve not seen many mackerels being caught by its proponents in the locations I’m familiar with.
No apologies for the repetition of the word ‘business‘ because at the end of the day, that’s what it’s all about and seemingly what many appear to have lost sight of.
Hats off to the businesses that are continually modernising and upping their game whilst still valuing the high service and numerous tangible benefits and advantages they offer to their clients because they will be the winners in the long term.
there is nothing wrong with offering a choice of basic service pay upfront and a commission based full service. Its the owners decision if they want to pay upfront or not.
By not offering the choice simply means you are giving business to the likes of PB.
I offer both, I expect to get a few who will opt for the upfront but the vast majority wont because they understand (after I explain carefully) the difference.
If you use needs based sales techniques you will soon determine what your client wants.
Anyone claiming to offer a premium brand, yet listing on OnTheMarket, doesn’t understand irony.
I think the only irony here is anyone who goes by the name of “statementOfFact” and then gives an opinion!
As I understand it, the OTM Listing is IN ADDITION to RM, plus Z, plus PL, so ALL national websites, which a lot of other independents can not afford to do, because hey charge cheap fees.
Premium Brand = Premium Fees = Profit. It’s not a dirty word!
I’m not convinced by the idea of giving potential buyers too much information up front on the property details.
I’ve often had more success by restricting the information so that a buyer has no choice but to call up.
I’ve tried everything from interactive floorplans to 360 degree photos to professional video tours and actual video walkthroughs.
The benefit of these is to reduce the number of tyre-kickers, but a GOOD buyer will get in touch to find out more.
The problem is that many buyers will “self – filter” and not bother to call because they don’t like this or they don’t like that.
I would say that perhaps 20-30% of all the sales I’ve ever done have involved people buying something quite different from their initial specifications and that the job of a REALLY good negotiator is to put a buyer and a property together that aren’t immediately obvious.
If the buyer never calls you and they don’t register (YES I BLAME YOU, RIGHTMOVE!) then you don’t stand a chance…
But maybe you will stand a chance in future with the new products we are working on!
You are looking at it all wrong.
In regards to the new 3d virtual tours that are out they are phenomenal. Very impressive.
Thing is the buyers hardly ever see them as RM do not promote them. Its about wowing the the seller. Most agents are all the same which is why the weak ones difference themselves on price.
If you offer a 3d tour, drone footage or a dedicated website for each new property (we are just launching that) – You offer more than the average agent, you win the instruction usually at a better % as well.
Well done David Lench. If the High street agents stopped prostituting themselves on fees, there would be no issue. In a million years an on-line proposition will never come close to the service of expert agents who handle the people in the transaction as a top priority.
There is clearly a place for technology, but it will not replace the need for communicators,negotiators,proper valuers, counsellors and people with years worth of expertise,who make transactions happen. And you can”t buy them cheap
I am sure ‘full-service’ agents must have the confidence to stand their ground against ‘no service’ offerings (I hesitate to use the terms ‘online’ and high street’), but to do this effectively they need very simple differentiation between the two that consumers get instantly, not some waffle that has to be explained in a lengthy pitch.
How? First, agents’ websites need to come out punching with the ‘full-service’ USPs – front-and-centre, on the home page, not buried behind tabs, and second, they need to focus on getting really high quality reviews where they are most visible – and credible – and that means Google, not one of the sites that Google buries in search.
If ‘full-service’ agents get this right they will have little to worry about and their commission rates will stay high (I am sure, as respected investment website Motley Fool said last week, the ‘no service’ option will be adopted, but by the very low end of the market – and that may actually end up doing all ‘full service’ agents a favour – after all Harrods doesn’t lose sleep worrying about Tesco and Top Shop).
Do you have to have a google account to leave a review on google?
Apparently so, hence we opted for the “Feefo” route as it is completely independent of our involvement, regardless of what others may say. Google would be great as its free but its incredibly difficult to get people to log onto, or even create an account to do that. Unless of course anyone has any cunning tips?
Google Reviews is quite difficult to manage. Anyone can leave a review be it real or fake and Google seem very reluctant to want to remove any reviews that can be proved to be fake. Like you said, I find it very difficult to get people to leave a review on there too.
Dave – it’s all about playing the long game: two Google reviews a month soon adds up, five is even better! You don’t need everyone to write one, but if you go the independent site route your less-than-happy customers will surely make the effort to write a Google review.
Glad someone has raised the “Google is difficult” point – Google is only difficult if the agent thinks its going to be. There are over 18 million people in the UK with one sort of Google account or another, so they can write a review at a click.
The clincher though, is visibility and credibility; no reviews site, including the one mentioned above, has both – because they are virtually invisible in search (just try it on your mobile – it’s shocking how dominant Google are) and because the independent systems are so easily attacked by your competitors – “They use an invitation-only site, so no wonder they look great, they are only inviting their happy customers. Look at our Google reviews – anyone can write one of those.”
As much as I dislike Arun they are at least heading in the right direction.
We secured two sales yesterday one at 4k commission the other 6k. That is almost 30 listings easyproperty would need to achieve.
We have live chat and virtual tours. But we offer for free. I bet Arun do not give the tours away.
I would love to see an example of the advanced Virtual Reality…….is there a link?
What’s your e-mail, I’ll drop you a message with the system we are currently using.
I’d love to see this too, though would rather not give my email on here.
What is the name of it?
I too would like to see an example of this advanced virtuality.
My email is
andrew.watt16@btinternet.com
Kind regards,
Andrew Watt
in@agentv.co.uk
I wonder what the plan is then? Go back to charging buyers 2%+VAT?