When I set up House Network 14 years ago there were no other estate agency businesses like us. We were the first to strip away the bricks and mortar structure that had, until then, housed the industry, to set up an agency that lived solely online.
Fast forward a decade and there are new start-ups, innovators and entrepreneurs muscling in on the proptech scene, with ‘online estate agents’ cashing in on the nation’s willingness to embrace a new cost effective way of selling their home.
From the outside, it may look as though all these online estate agents offer a similar product; that the only real difference between them is the sheer amount spent on marketing in the desperate scrabble to get the attention of new savvy home sellers.
It’s a fair assumption, the setup of traditional agents – their business models and strategies – are near identical from high street to high street, so surely it is the same for their online counterparts?
That’s not so. It is one of the misconceptions about the industry – and it threatens the progression of the online agency sector.
From the outside ‘online agents’ look the same. We all have a website and no physical presence in towns, bar the growing number of ‘for sale’ signs. Behind the digital ‘shopfront’ each of us is different.
Take House Network. We don’t categorise as ‘proptech’, or even an ‘online agent’. We’re aligned with the traditional model far more than the pure online structure favoured by many others. Our technology assists the people behind the process, it does not replace them.
It’s true that our approach differs from the high street model in that we incentivise our staff based on customer service rather than sales. But this distinction separates us from most other digital brands, where cost, not customer service is the main priority.
Notice that I refer to our ‘staff’. Like traditional agents, we hire all our agents locally and our account teams are on the payroll, which allows us to keep control. Not many other ‘online agents’ can say the same.
We use our knowledge and 14 years’ experience to increase staff efficiencies that enable us to offer the same full-agency service but reduce costs. However, more online agents are moving towards a model that saves clients money by cutting corners, rather than by reducing the price of their service through sheer efficiency as we do.
The problem with this model is that it waters down the full, trusted, estate agency service. Buyers and sellers are encouraged to talk directly, losing the potency of the agent who can ask the awkward questions to progress a sale.
With a lesser service, online agents focus on cost to compete, continually cutting corners. The result is a shell of an agency; a marketing machine that’s good at getting acquisitions but without the infrastructure to give the customer the service they need; help and support from a local expert to do the job on their behalf. Many rely on third parties, unable to be controlled, to deliver.
I’m sure most online agents believe their customer savings message is the only thin their savvy clients value, but they are wrong. Our experience, weathering the storms of two property crises, tells me so.
We launched when the property market was in its peak. When the crash came we realised it was our first customers, those we delivered fantastic customer service to, that kept us going. They referred us on and so we survived.
It has shaped our business model. The values of a traditional model – fantastic customer service and local expertise – are built into our business. It’s kept our customer retention high, for every person who sells their house, we get another instruction.
Now, online agents make up just five per cent of the market. The market is ready for change, I believe that in five to ten years it will be 50/50 between traditional high street and online agents, but not the way it is now.
While many aspects of the industry will change, one thing that won’t is the need for outstanding customer service. Selling a house, the most valuable possession a person owns, is an emotional experience that needs a human touch. A good experience and a positive referral is the best marketing a business can get. Agencies that forget this may have a limited future.