Agents DO have a choice
We hope this update finds you and your colleagues safe and well. It is not lost on us that we are a little over a month away from what appears, in the absence of formal representations to the contrary, Rightmove returning to full tariff.
The justification for this appears to be the acceleration in market activity as a result of pent up demand due to the Covid-19 lockdown, enormous Government aid to the UK economy and specific stamp duty incentives.
It seems Rightmove have learnt nothing tangible from their misjudgement of the pandemic back in March of this year, and furthermore are making no long term plans to assist their clients (UK estate agents) in the face of what is likely to be an inevitable correction to the British economy. At best, there is going to be a massive churn in employment numbers and the related challenges this will bring to the property sector, with many businesses across all industries far from returning all their furloughed staff to full time employment. It is also sadly likely that significant numbers of workers will indeed be laid off completely in the wake of the damage caused to the global economy.
Now is therefore precisely the time for Rightmove to respect their customers lobbying and change their model. In simple terms, Rightmove has flourished from the support of the industry itself, and having reached a virtual whole of market position, have then played UK estate agents against each other in a drive to continually increase their ARPA for shareholders. They have continued to ignore demands of the following type from their client agents, and it’s clear their Board are choosing not to listen to the feedback from their own sales force.
1. A genuine core rate per office, not predicated on an inflated target spend.
2. Flexibility to buy additional products at a fair tariff as, when and if required.
3. Real justification of returns on spend and more transparent conversations surrounding ROI.
4. Significant investment in technology and strategies designed to grow the overall size of the UK property market and transaction volumes.
5. Shorter, flexible contract periods allowing agents the freedom to adjust their spend in line with market conditions.
There are many more suggestions and ideas emanating from the UK estate agency industry that are being ignored by Rightmove, but the five points above touch every hard working property professional.
Our door remains open to Peter Brooks Johnson, Miles Shipside and the senior Rightmove team, as it has during the time I have lobbied on behalf of The Acorn Group over the last decade. However in the absence of change, Rightmove’s ability to maintain pole position in the portal sector must surely now be compromised.
The last six months has demonstrated that, in reality, the really big bucks being paid out in the portal sector are coming from the smaller independent agents. We hope our campaign has demonstrated what a vital life blood each individual agency office is to any portal whose revenue is primarily focused and earnt from estate agents alone.
Consequently, we believe that in the absence of a sea-change to Rightmove’s approach to its clients, the portal market is about to become more competitive. However, that process can be accelerated if a significant number of agents refuse to succumb to tariff rates that they feel are too expensive, inflexible and out of kilter with their own turnover and profit margins.
We have received representations from significant numbers of smaller independent agents who are intending to serve notice if Rightmove do not offer continued discounts and longer term changes to their tariff system.
Meanwhile the challenger portals are beginning to gain some traction as they overcome the staircasing-up of their own infrastructures to meet demand, and negotiate the hurdles of securing the feeds at fair value and delivery from the varying CRM providers. Add to the current landscape the announcement of Boomin, which we have been informed will commence their roll out in October. We at SNTRM have had a sneak peek behind the Boomin curtain and - save for the industry’s reservations about the Bruce Brothers and their former Purple incarnation - we can report the proposition is exciting, exceedingly well-funded, and has potential to be a game changer.
We had reservations about a new Bruce Brothers business model before meeting them, but it does appear they are wedded to a concept that is focused on Boomin being the professional full service estate agent’s friend, delivering a raft of technology that will create new transactions and offer agents additional income. Thus far, we are also aware that they have had engagement with a number of the country’s leading agents and have had an overwhelmingly positive response.
It is, however, for the Bruces to fully unveil their project and convince the industry of their sincerity. From what we have seen and the people we have met, it would appear they have genuine intentions to make a positive difference. From an Acorn Group perspective we are very seriously considering committing our support. One thing for sure though is Boomin will only drive better value in the portal sector and encourage Rightmove, Zoopla and On The Market to place even greater value on retaining their clients.
Say No To Rightmove remains committed to lobbying for better value and fairer contracts for UK estate agents who continue to buy marketing space in the portal sector.