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