Online Agency - A Light-Bulb Moment.
The Future of Estate Agency is online. Despite the feeble protestations of those that have tried and failed to make it work.
I know so many #estateagents love to think and act short-term. But the future, in this context, isn't about the immediate pent-up demand post-lock down. Leading to a surge of new instructions.
No, it's about whether in a few years you will even have an estate agency.
Reading an article by the brilliantly insightful Nicolas Cole on The Future of Writing: Freelance, Careers and The Role of Storytellers.
"If you think becoming a professional writer is hard today, just imagine what the landscape is going to look like 10 years from now:
AI-generated journalism Machine learning algorithms that can predict and make informed recommendations on how you (or anyone) should write to achieve X goal. Templates for genre fiction, templates for sales copy, templates for web copy, for breaking news, social media recaps, etc. Decentralized storytelling, where the platform (and/or individual pieces of content") evolve and change based on who is writing, editing and contributing.Cole goes on to talk about there being three types of writers and for the sake of expediency, I have transposed that to estate agency.
Three levels of agent: Levels 1 -2-3.
Not necessarily in fee levels, but in the soft skills of attitude, curiosity, service, ambition.
Cole argues that level 1 will be replaced in the next decade.
Why?
Because there's simply too much competition. The average fee level is shrinking rapidly year on year. There's already a benchmark of FREE provided by House Simple (now re-branded Strike) and technology is much to blame.
"It's only a matter of time before your Uber driver isn't a human being driving their 7-year-old Toyota, but a brand new Tesla using Uber's troves of data to drive itself from your apartment to wherever you're going to dinner that night. This isn't sci-fi stuff. This is already happening."
It's only a matter of time before online estate agency resurrects itself and offers a startlingly improved version of its former self.
That will be enough to clear out the Level 1 estate agents. Those that aren't up to the job, but survive on the naivety of vendors that were willing to accept such mediocrity, as long as the service wasn't entirely broken.
There's well-documented opinion from the likes of failed online estate agent, Russell Quirk and Adam Walker, management consultant, as to why online agency market share remains stagnant at 5-6%.
They proffer a number of reasons, not least of which is that a cheap fee doesn't cover all of the work required for a successful completion. And they suggest that if online agencies increase their fee level, a vendor would necessarily choose the human touch over the digital caress. Regardless of whether either agency is mediocre, or remarkable.
What all these 'experts' fail to mention is that online hasn't taken off because the online operators have done, and are doing, a spectacularly poor job at convincing homeowners of their competence and of their worth. Nobody forced them to choose cheap, but they couldn't even pull that off!
Quirk further excuses the failure with there being a higher number of online competitors, the higher cost of customer acquisition and the psychology of low pricing. Without ever mentioning that his failed enterprise, along with every other online agency, did not have a clear and compelling reason to choose them. Mediocrity never wins first prize.
Let's break down what a traditional estate agency offers, courtesy of The Middleman Economy by Marina Krakovsky and compare whether an online could match or better it.
The Bridge - promotes trade by reducing physical, social or temporal distance.
The Certifier - gives buyers reassuring information about the seller's underlying quality. Staking your reputation.
The Enforcer - makes sure buyers & sellers cooperate and stay honest.
The Risk Bearer - reduces uncertainty. No Sale - No Fee.
The Concierge - reduces hassle and helps clients make good decisions in the face of information overload.
The Insulator - helps clients get what they want without the stigma of being thought too greedy or confrontational.
Could that not all be done online, rather than in person?
Of course!
And, in most instances, more efficiently.
Don't get me wrong. No amount of technology; no matter how amazing, can by itself ignite the shift from good to great. No technology can turn the wrong agent into the right agent. No technology can instill faith & trust.
Where traditional and now hybrid agents have a distinct theoretical advantage is with human to human connection. It's a huge advantage and one that for the most part, agents thoughtlessly discard.
More focused on convincing homeowners of their competence, agents fail to deliver the one thing that their prospective client seeks.
TRUST.
They fail to persuade that they can be trusted - because they say precisely what every agency is saying.
"I'm better - choose me."
This lack of trust allowed the online agencies to spring up.
If you can't trust the traditional agency, there was no reason to not give the online upstarts a chance.
Except that they all, every last one of them, failed miserably to provide that clear and compelling reason to choose them.
Preferring, instead, to position themselves as "the same as the high street agency, only cheaper."
Even those with deep pockets pursued this default dead marketing strategy.
"Save Yourself Commisery."
"We're creating a movement."
Clear & compelling? More like vague & uninspiring.
Ensuring that the cost of customer acquisition went through the roof.
Quirk cites "the high cost of customer acquisition" as a reason for online agency not being viable.
Completely missing the point that if the marketing isn't effective, it doesn't matter how much, or how little, you spend.
Buying attention on platforms that they didn't own. Devoid of any meaningful message. Using other people's money to play the game. Hoping to persuade vendors that choice of agency is an impulse purchase.
A recipe for disaster.
High street agency and online agency are fundamentally no different.
They both do the same job of selling homes.
They both make the fatal mistake of believing that price matters. That competence matters. Even, that people matter.
None of that matters if there is no message. If there is no emotional engagement.
Making a vendor feel something. Winning hearts rather than minds.
Allowing them to trust the very thing that has never been trusted.
Estate Agency!
No need to cheapen the offering to win market share.
Demonstrate that you're better and charge what you're worth!
Build a loyal tribe of people that like the way you think. Like what it is you say. And would not contemplate, ever, using any other agency.
That applies equally to online as it does to traditional agency.
In the race for attention, online agencies failed to realize that it's not simply about awareness and recognition. It's about message - platform - environment.
When the light-bulb flickers into life, it will shine brighter than any traditional/hybrid offering could ever imagine.
When the right message resonates with the right people, they won't care whether the service is provided by a traditional or an online agency.
An online agency that has done its job well - one that has been totally transparent about the people behind the brand, has told a 'story' that inspires and provided the elements of trust that are necessary. Such an online agency will flourish.
In order to do that job well, though, it's necessary for them to be transparent..
If you're not trusted, your agency is simply chasing attention. That's always expensive, more so if you don't own the media.
But consumers routinely spend thousands of pounds online on a variety of products, including buying 'online coaching' and other 'information' products. The cost isn't the problem - trust is the problem.
"People do not buy goods & services. They buy relations, stories & magic." - Seth Godin.
As yet, neither traditional or online agencies have figured out how to get that trust.
It's well documented - for those that have the curiosity to explore new avenues.
"If your business is to thrive in 2020, you've got to show your face. Show people who you are. That's awkward for some bigger institutions accustomed to keeping their communications comfortably colorless & neutral - more brand, less character. ....it's not that we lack humanity or empathy. It's that we aren't used to leading with it." - Ann Handley.
Of course online estate agency has to provide the service. And undeniably should charge for that service.
"More than you'd like to pay, less than we'd like to charge." - Oren Klaff
It's no good equating online agency to cheap fees. It's online because it should offer more advantages for the homeowner.
Virtual tours. Accurate valuations decided from the trove of comparable data rather than some lead-capturing A.V.M that benefits neither agency or vendor.
Rather than a deliberately inflated valuation that is designed to win the business, by means both fair & foul. A transparency of information on both the seller and the buyer. An online process that is automated and has not to rely on the whims of a conveyancer or solicitor.
Safe. Secure. Trusted.
Where the boasting, promising and emotional manipulation of the few hunter-sales-agents that remain stands out like a sore thumb and does not negatively impact, by association, the overwhelming majority of honest & decent agents.
That's the future of estate agency.
Just because it's online, doesn't mean that you're no longer an estate agent.
Only that you aren't trying to fix something that's clearly broken with incremental improvements. But instead, embracing something new. Something that you can help to shape. Something that would make you proud to say:
"I'm an Estate Agent."
Thanks, as always, for reading.
I've never been a fan of online agencies in the past. Simply because of the short-sighted business model that was attached. But there is now huge opportunity to finally do it right. The advent of the hybrid model and the apparent rush of big corporate's to embrace W.F.H will only speed up the process of an online resurgence.
I'd love to hear from you either way.
The world is changing, in no small part due to the current pandemic, but estate agency still seems firmly entrenched in the past. Time to move on?
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