Countrywide’s strategy to combat the rising tide of online agencies has come at a pivotal point for the whole industry.
But its venture into online agency is not a ‘fighter’ brand, new analysis has found.
Proptech experts Eddie Holmes and Mike Delprete conclude that “significant changes” are needed if Countrywide’s digital offering is to succeed.
The pair claim that by using its existing brands, “Countrywide is not likely to reach new customers in new ways. Instead, it is only reaching those potential customers who already know their existing brands . . . There it only serves to cannibalise the existing customer base by selling them a lower priced service while simultaneously failing to bring in new customers.”
The respected pair say that for every disruptor such as Purplebricks, there are those being disrupted.
These include Countrywide, whose share price has halved over the last year.
The analysis claims: “We’re at a pivotal point for the entire industry and for Countrywide in particular.
“Countrywide is a business in decline, and the line between death spiral and a rebirth is razor thin.”
Their analysis says credit should be given to Countrywide, which launched its online offering last year. It says the UK’s biggest agent moved early and quickly, but goes on: “Countrywide’s strategy raises serious questions around the viability of the offering and if it was, in fact, designed to fail.”
The pair conclude that Countrywide’s online offering is a brand extension, acting as a lead-generation effort to support the incumbent business.
They also claim it was launched after an “inconclusive pilot”.
However, Holmes and Delprete say that Countrywide “ought to be congratulated for doing something”.
They say: “Countrywide felt forced to do something; online agencies are perceived by the financial markets to be the greatest threat to its existing business. Purplebricks’ continued momentum, market traction and rising stock price demanded a response from senior management.”
But they conclude: “However, customers don’t seem to be buying the new service and the markets aren’t buying the strategy.
“In reality, the brand extension offering cannot succeed on its own. At best, it achieves product parity with online agencies, and offers a platform to upsell potential customers to its premium estate agency proposition.
“However, it does not suggest that the business has thoroughly understood the challenges that this must create around issues such as incentivisation of staff or servicing a totally new service line with the existing infrastructure and cost base.
“If Countrywide’s offering was designed to fail – that is, to not succeed as a stand-alone business or product, but as lead-generation for its existing business – it does not mean it is a bad strategy.
“In fact, it may be the best course of action for the large incumbent as it is relatively low risk and keeps its options open.
“But if the offering was not designed to fail, significant changes are clearly required to give it a chance of success.”
The authors of the analysis did ask Countrywide to comment on what is undoubtedly interesting stuff.
http://proptechconsult.com/2017/05/09/digital-transformation-at-countrywide/
To the rest of us it appeared like a rabbit in the headlights knee jerk reaction!
If they had thought it through they could have used the immense resources at their disposal to enhance their existing offering and develop new technology driven efficiciencies to provide a more customer focussed experience.
To my mind they need a forward thinking person with entrepreneurial independent experience at the helm.
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The public simply dont care about our industry as much as we do… if purplebricks didnt have TV advertising they would have already closed… The actual online industry is a niche myth that you only play in if you didnt mind lying to your customers all the time.
Until Countrywide rebrand the whole name they are nothing more then a lot of independant companies..
Whole industry is a joke now any way. The tories have killed it. No one moves anymore.
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The tories? The reason we ‘dont move’ is presumably mostly down to house price cost? Are the tories to blame or do we have another leftist rabble rouser in our midst…..
Mass immigration favoured by the left – created hyper house price inflation – tories pledge to bring down and allowed vote on exiting europe.
The tories selling off of council housing allowed 100’s thousands of homes to be brought and sold. Labour will build more council houses apparently but a lot of these will go to immigrants. Labour say they will build more homes that cant be brought and sold; council homes.
The tories should have got the buy to let industry under more control sooner and will never get my vote whilst they insist on banning fees, but really is this a political issue?
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Bless You,
Little dit for you that I am sure you will be interested in…..and one of the major reasons I believe we are seeing falling stock levels and far fewer people moving. A lot of it is due to the Mortgage Market Review and the lenders implementation that happened 3 years ago.
One of our vendors wants to halve his mortgage and his payments by moving and downsizing (which will also reduce his loan to value). However when he approached his existing lender… they wont let him port and reduce his existing mortgage, because his work contract is now different to what it was (less permanent).
If he stops where he is he can continue with his existing mortgage at the higher amount with higher payments…no problem at all.
HERE IS ONE OF THE FINEST EXAMPLES OF RECENTLY INTRODUCED RULES AND REGULATIONS TOTALLY OBLITERATING COMMON SENSE!!!
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Granted there will be some people negatively affected, and on the recieving end of mortgage changes, I dont agree this is in any way a MAJOR factor in relation to the original point. Were it to be then who was it that got us into the mortgage and banking mess? I’m guessing ‘Bless you’ would say the Tories.
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yep tories are making every poorer and the city richer…,,,all down to weak policy on interest rates and lack of confidence.
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Someone has given into the hype of the internet. It is a great tool but has not reinvented the wheel. Once a corporate starts to look at profit only, they are doomed and create fall out for others. Short sightedness comes to mind, not new forward thinking. They will go the way of Cornerstone!
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Retail does hold water (done right).
But budget isn’t the way to go.
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Sorry Trevor that isn’t correct; the legal obligations of Agency define it as a service industry. There are 27.5m unique products of which only 3.2% change hands each year, that dictates agency will remain a bespoke service industry.
Countrywide have the luxury of trialling this business model with only a marginal risk to its core business. In trialling the system it tackles head on the challengers who are wholly reliant on the model.
CW could well afford to offer or threaten to offer the service FOC for longer than investor patience will keep pouring cash into a system that is now proving it’s inability to properly cover its costs, provide returns to investors or I suspect the interest on the loans and charges used to prop up the model.
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How on earth can anyone dislike the truth? Oh… that’s right, it hurts!
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Proper estate agency is too important a service to be allowed to become a loss leader for premium products like viewings conveyancing, mortgages etc
Does an upfront payment that is the same whether a property completes or not undermine the third party reward principles of The Estate Agency Act ?
If you pay a £995 for a TV and it does not work you can ask for a new one that does or ask for your money back.
Why should upfront estate agency be any different?
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“Proper estate agency is too important a service…”
Is it possible to define what that service for customers is? I don’t mean from any Act written 30/40 years ago but in real terms for customers in 2017…
Is it more than:Local area knowledge
Presenting a property in its best light (photos, description, videos, walkthroughs etc)
Managing a database of buyers
Negotiating
Arranging viewings
Conducting viewings
Negotiating
Maintaining a chain
Recommending local professionals
This is a genuine question not meant to be stirring the pot. I’d actually be intrigued to know if there is some magic stardust I’m missing.
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The magic stardust is something called ‘commission’ based on success, not failure.
if the up front models fail to achieve a listing to completion ratio % more than 50% their model is based on failure.
Why do you think the largest does not appear to wish to share this information with the consumer?
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That’s a business model not magic stardust.
Does anybody share their numbers on listings vs completions, asking price vs sold price?
Do local agents ALL average more than 50% listings to sales?
As somebody selling soon I would love to know those numbers for all my local agents.
I understand statistics are only one part of it but I’d still like to know.
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Would you make a bid on a new sofa for £1000 if you had a 50% chance of losing all your money or would you prefer to bid £1000 if you only paid for the sofa on delivery?
That is why the upfront payment model must provide consumers with audited isting to completion % ratios so consumers can make an informed gamble?
If you risk losing any money you surely need to know the odds?
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PurpleBricks aren’t promising to sell your home.
They are quite clear in what their service is.
They will market your property, arrange viewings using their website and then by and large abandon you at the next stage.
That is a service they are providing, if it is legal to call that estate agency then it is a decision that consumers are making. Ultimately, in every single industry it is the people who pay the money who will decide where that industry goes.
If every consumer said they wanted a fridge without a light then within a few years all new fridges wouldn’t have lights…
Demand now leads supply as supply chains are being ripped up over the world. Zara can copy a design from a catwalk and have it across thousands of stores within 4 weeks. Demand drives supply not the other way around any more.
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“PurpleBricks aren’t promising to sell your home. They are quite clear in what their service is.”
So… help me out here, observer – what, exactly, are they being “quite clear” in saying in this Google Ad:
https://ibb.co/ioCrBQ ?
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May I say the magic dust is the person looking at you in the mirror in the morning, the person who treats thier job as a vocation, not just a job.
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I think the magic stardust is the experience, knowledge and ability to treat every property sale as an individual assignment with its own distinct needs….. rather than an off the shelf commodity. It also involves engaging and getting to know buyers, including their thoughts and their feelings about individual properties and the market in general. The object of all this …to achieve the absolute very best end result for the Vendor!
You can achieve very little of all of this as an online lister!!!!!
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Ok so soft skills/people management is the magic stardust…
The value of an estate agent is in this?
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The value of an estate agent is in knowing exactly what to do, and how to do it, to achieve the very best sale price for the vendor whilst making the whole process from start to completed sale as smooth and as least disruptive to their lives as possible.
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observer
I think our completion to listings ratio is well over 90% by the way. But if you want help choosing a local independent agent email me jack@thunderbirdsarego.co.uk and I will give you a guide on exactly what to look for.
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“We’re at a pivotal point for the entire industry….
Oh so very true. No matter how anyone likes it, all that on-line offers is disrupting the service industry. They do not offer anything more than the High Street, who are all on-line anyway. The fact is on-line only do not provide the service the High Street provides. The danger for the High Street is if they start to become lemmings, the rot sets in. They are more concerned with fear, some trying to compete with budget costs that are not sustainable in the long term.
The stock is reducing and this could be the nail for on-liners, for the High street is in a prime position to knocking on the for sale boards and telling the vendors why the High street is more successful. They only have to ask the vendor for their own experience of the on-liners only, for in many cases the vendor will agree by experience, not forgetting to remind them that how do on-liners get to the people who do not use the internet and they are after all a “call centre”, not personal and we all know what the public think of call centres! High Street Agents need to be proactive at fighting them. On-liners are trying to steal your business, get it back.
Agents need to stand their ground, re-educate their customers and remember this ……. this is an attempt to re-invent the dot.com boom of the 1990’s. It failed miserably back then and many of those spouting it will work this time were still at school or forgotten why it went bust. No consolation for agents while they weather the tide, which will recede. On-line only is a minor player with pathetic percentage of market share, non-profit making. They like to use National figures but the public are more concerned with their local areas and when you break down the % of local agents to on-line only stock…. well is it pathetic to say on-liners are a success. It is the publicity they keep generating which creates fear, but just as the FS industry found out and there are no players left, estate agency is a personal service sector. On-line is not personal and offers nothing more than so called cheap fee, they haven’t revolutionised selling property and sooner or later the public and investors will see through the hype of those that are only in it for the money.
Stand your ground, plan your strategy, be confident and implement. Take back control if you think you are loosing.
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I know what your saying but i think it all comes down to units….purplebricks have no market share in in our county…but.. the agents who do it properly are relying on lettings to stay alfloat… Out with the tories!!
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Please leave the politics out for it was Labours Blair and Brown that got the country bankrupt. The Tories for better or worse were left with the pieces to pick-up. Corbyns exposed manifesto is even worse than Blair and from a man who will not sing our national anthem, but happy to sing the socialist “red flag”.
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I don’t normally like to get political, but my understanding was that it was the greed of the banks in selling worthless American subprime consolidated mortgage bundle triple A rated investments between themselves, and in the process paying their staff billions of pounds in bonuses, that bankrupted the country.
The worldwide recession that followed the resultant banking collapse where major monetry organisations didn’t trust each other or the ‘toxic assets’ that they held on their balance sheets, has meant that even eight years later we are still being affected by what happened……including an eye watering increase in the national debt.
Does anyone think this wasn’t the case?
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This is going off subject but you are correct but the vehicle to allow this to happen was the government of the day de-regulated FS and banking in a way that allowed the bankers an open door or put another way, they turned a blind eye knowing full well what was happening, riding the crest of the wave until it turned sour. Just like weapons of mass destruction.
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Woodentop,
I totally agree with what you say except that I though it was the other pub lot who started banking deregulation in the 1980’s? However all politicians of all parties allowed soft touch regulation to persist. I don’t remember anyone at the time questioning what was happening in the ‘city’ and with the huge bonuses that were being paid. I used to sit watching the news thinking to myself ‘this can’t be right’.
To me, if someone is consistantly making huge amounts of money, someone somehere else…. or many people elsewhere….. must be losing money! And that just didn’t appear to be happening…everyone everywhere seemed to be making money…. and lots of it!
Problem was of course, I didnt know enough about what was happening and I had no authority to question. But people more in the know, and with the authority to do something, should have been doing just that!!!
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You are correct that in 1980’s Mrs T started the ball rolling as a consequence of the previous governments actions to settle a wide-ranging anti-trust case and the dominance of elitist old boy network and US Banking. Restrictive practices included the London Stock Exchange’s rules and she tried to get a free market going, something that every government and political party, as well as the EU have since installed into us is best. However hindsight is a great thing and it wasn’t until Blair & Co came to power and looked the other way, some say knowingly, it all went pair shaped and apparently did nothing to stop it. Rember Gordons golden rules, he kept moving the goal post with spin, a term which they personified.
I don’t remember anyone at the time questioning what was happening in the ‘city’ and with the huge bonuses that were being paid. I used to sit watching the news thinking to myself ‘this can’t be right’.
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I dont disagree AgentV but do you remember John Major? I do and I clearly remember the consequences for many people and the length of time it took to get us out of the seemingly never ending dark tunnel. Politics needs a radical change where we are not left to the mercy of incompetent and greedy Governments. Depression and stress levels have never been so high – why – because we are constantly encouraged to live in fear from something – be it wars, the economy, health, global warming and we all know bad news sells, not good news, so we (and our children) are bombarded daily with negativity. Major’s premiership was followed by the two worst individuals in history Blair and Brown and then Cameron and Osbourne. Each time the electorate thought things would change – they havent and they wont. We will continue to be lied to, bound up in regulation and red tape, our freedoms will continue to be eroded under the guise of security.
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We need an optomistic and inspiring leader who has experienced real life at the ‘coal face’ and the pressures of not knowing where your next mortgage payment will be coming from, someone who will be fair and just to those able to help themselves and empathic to those less fortunate. We need someone who is all about building a brighter and better future for everyone, not just a priviledged few, but more than anything a better future for our children than the one we experienced….a future where the major motivator is aspiration and optomism!!!
We want a future where the propagation of incessant fear is what we fear the most.
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I’m going to see the new Alien film out next week by the way!
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What goes around comes around and yes those of us involved in the late 80’s have seen it all before. Some new ideas stick, others fall by the wayside.
High street agents have adapted over the years as always but all have to up the service they offer and really show they add value to their vendor client.Look after you buyers so you lookafter your vendor.
The internet is a very useful additional and important tool to selling but local knowledge of buyers wanting to buy locally need to be used. Phone your buyers up – talk to them. Often too much reliance is given to the internet.How often do I get the answer to a property enquiry from an agent that ‘all the information is on our website’? PB can’t phone up its buyers but local Hight Street agents can. What a plus!
Lettings , aften derided by some, have always been a support for agents who have them; needed by agency when times are lean and part of a service to clients that pays some useful bills and from time to time gets you a property or two to sell and a tenants to become a buyer.
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