In 2002, the board of HMV were told by their marketing agency that the chain faced three major threats: online retailers, downloadable music and supermarkets offering discounts.
HMV’s managing director replied: “I accept that supermarkets are a thorn in our side but not for the serious music, games or film buyer. As for other two, I don’t ever see them being a real threat.
“Downloadable music is just a fad and people will always want the experience of a music store rather than online shopping.”
Today, the music has almost died for HMV and its board can only dream of what was once its £1bn-plus valuation.
Peter Knight takes the example and applies it to the world of high street estate agents.
In a fascinating article, he looks at the lessons that could be learned from HMV – starting with the advice: “Accept that the new models are here to stay.”
Other advice includes recognising that people want things immediately; and that, if the management gurus are to be believed, there are just three customer propositions.
These are: innovation, service, and efficiency (often known as cheap).
You cannot, says Knight, do both service and cheap. For proof of this, look no further than Countrywide.
There is plenty more thought-provoking stuff here:
http://propertyacademy.co.uk/four-i-newsletter-issue-214?inf_contact_key=9e28a4beca15f1c14b016d0acc3f14a1232bc2900dec88323c9fca294126b872
Comments (16)
Peter Knight 100% agree with you.
Oh, dear – I’m sure he’ll be gutted to know that.
Your percentages have never yet produced anything that we can class as reliable or believable.
Surrey1 “envisage a world where the public run my diary”
Cant you?
Change is how we adapt, not just estate agents but humanity.
No one wants change if one is comfortable in one’s own little world, however change is inevitable.
My office offers two fees a fixed upfront and a full service commission.
So far all our clients want the full service because they know we are good at what we do, if someone wants the upfront service it is limited and NO REFUNDS is made a clear as a bell, just in case.
Purplebricks and the like have yet to break our market because they do not have word of mouth referral, instead they rely on trustpilot.
A potential vendor will turn to word of mouth as well as alternative reviews, maybe not when reviewing a film on Netflix or buying their weekly groceries on line but selling a house, the biggest single investment 99% of us will ever do!
Yes we have to change, yes on line platforms will take a chunk of the business but as long as we understand what our value is in this business and how we can improve our clients business of moving home then we have nothing to fear.
Set your stall out clearly, do not be afraid of the cut price service, the client chooses, your job is not to give business to someone else. The reason I am not afraid of the cut price service is because I make it really clear giving me money upfront isn’t a guarantee of a sale whereas paying a commission on a no sale no fee basis is fair for both parties
Very good article and good comparison! World is changing, we have to either adapt or die! It is not about just service we provide, it is about how we do it. We can sit and pray that online estate agents won’t affect our business or we can at least try to improve our basic level of service and try to differentiate. Nokia is another good example of how complacency and ignorance could destroy value.
I read the article with interest. I think the biggest parallel could be the willingness or unwillingness to take heed of warnings….whether they pan out to be true or not
Time and time again people say Agents can’t work together…because they are competitors. But I believe it is this very attitude that potentially undermines our future.
If we as independents could collaborate and pull together in the same direction, whilst remaining ‘respectful’ competitors, then the dangers of ‘divide and conquer’ from powerful organisations would be significantly reduced.
What does everyone else think?
The biggest risk to the industry of divide and conquer is the might of Zoopla and Rightmove. It will be they, not Purplebricks or on line, that could ruin estate agency as we know it. And we seem powerless to halt their relentless power gain.
The power is coming!
I get that there is a danger of complacency and estate agents must not just assume that the threat will go away, however i will echo what JPS said, buying or selling a property is completely different from buying music or films. Until you can buy a house in a day there will always be a need for the high street, And as has been stated many a time, if the internet were the greatest thing for the housing market, why cant any of these companies many any money?
They will make money as their cost of acquisition drops from current levels. PB is now the most recognised estate agency brand in the UK. Rightmove is widely perceived as a go to place for buyers. There is a risk that PB might become a place to go for vendors.
Perhaps, but it is also a fair shout that at some point the other companies in that sector will die off and PB will remain the only call center/online/hybrid company around. The vast level of cost needed to enter that sector is extreme so new players will largely be prohibited. And the problem re Purplebricks being the place for vendors…that is quite some way off, but if buyers are finding the experience of buying through them so hard, will buyers shy away from that experience making the idea of selling through them so much harder than a high street agent
Do you believe that dealing (buying / selling) via high street agent is a great experience for consumers?
SmartOctopus30 Do you believe that dealing (buying / selling) via high street agent is a great experience for consumers?
Is it for your company?
If the answer to that is yes, why can’t other agents be doing the same for their vendors and buyers?
Maybe I’m already a dinosaur, but I can’t envisage a world where the public run my diary or a least that I’d want them to. I quite agree you can do cheap or service, not both however.
Downloading music/ watching a film on netflix rather than going to blockbusters is fairly different from selling and buying a house.
You can’t compare the industry due to the different level of work needed to complete the purchase.
Peter Knight is totally spot on with these comments!
It’s a superb article that all estate agents should read if they are really interested in the future of estate agency.
My to do list..
Get on rightmove
Get a website
Get email
Remember my raw material of houses are in my town where I also have a shop…..
Oh yes….i already do this.
Will be unsubscribing soon