Yesterday OnTheMarket revealed its latest results including a new high in paying agent branches listing on its portal but also reduced revenues following the Coronavirus lockdown.
We asked several leading estate agents what questions they would like to ask the portal’s acting CEO, Clive Beattie, about its performance including why it’s stopped marketing activity, any future fees discounts and whether it’s going to run out of cash.
Many say your latest results show you’re still losing money. Will you run out of cash?
“If you look at the headline figures in our results then it looks like – and we have – lost £7 million but as we came through 2019 and started converting more agents to paying customers (and now have 9,000 paying contracts), our monthly cash burn has reduced significantly.
“And if you think we’re going to run out of cash this year, look at our results which show our losses and expenditure were in the first half of the year before we started converting ‘freebies’ to paying. I don’t’ feel unhappy with our cash position.”
When will you match Rightmove in terms of branch numbers?
“With our increase in branch numbers, and Rightmove’s losses since Covid which put it under 16,500 agents as far as we can tell, I believe we’re closing the gap.
Are you spending enough on marketing to get public awareness of OTM?
“I think one of our main achievements prior to the Coronavirus crisis was getting the portal to a scale where it was effective and the network effect became important.
“We have struggled for many years to achieve that and even when we floated in February 2018 we had 5,500 branches listed and a few million visits each month
“At that time the leads we were giving agents were not commensurate with the fees that they were charged, and that they paid in the hope that we were successful.
“If you roll forward to where we are now, we’re at 12,500 agency branches plus another 1,000 advertisers when you include developers. Our marketing spend so far has, our latest results show, driven visits to OTM up by 49% and leads up by 75%.
“That level of activity is now sufficient for the fees that we are charging now for a fair return, and for example January was a record month based on a substantial marketing spend.
“But during the Covid crisis we decided to focus our expenditure on lowering our fees, which means we pretty much stopped our marketing activity as we’ve tried to control our costs.
Will you be offering a ‘leave Rightmove’ discount like Zoopla has?
“We have always been on the side of agents during the pandemic and we have never sought to do anything unfair on the fees and be majority agent owned.
“We’re not just here to ramp up prices in the future. We do want to make a profit but will reinvest those profits in additional services for agents and others. If we can provide a genuine choice in a competitive market, then that’s more important. We want to get to a place where agents don’t need to be on Rightmove because we’re a more credible alternative.”
Why did you buy Teclet?
“We can catch up the other portals in terms of listings and paying customers, but we don’t see our business expanding by charging agents more for using our service.
“Instead, we want to grow by offering agents tech solutions that deliver value-added services which they can choose to pay for, or not. We won’t be packaging them up with our listings service to justify fee increases.
“The opportunity is not that we’re catching them up, but rather that the public have begun to notice that Rightmove are no longer ‘whole of market’.”