Purplebricks has given details of how it intends to use some of its new investment, and in particular is spelling out its desire to build “lifetime relationships” with customers.
Analysts have often criticised Purplebricks and other online/hybrid agencies for what some believe to be the short-termism of their business models, relying on customers who may use them once only - especially if the sale in question was unsuccessful or very slow.
Purplebricks’ release of details as to how it will spend some of its £125m new investment from publishers Axel Springer - which we reported yesterday - throws some light on how the agency seeks longer-term business.
“As part of a strategy to build on its current service offering, Purplebricks aims to create longer lifetime relationships with its customers so they stay engaged with the brand for the period between moving into their new home and when they come to sell the property” says the agency.
“It will look to engage with more of the buyers who visit the site (over one million searches a month in the UK)” it continues.
Purplebricks says it is “exploring ancillary services and additional revenue opportunities which are yet to fully embrace technology as it believes Purplebricks is well placed to provide a superior customer experience, reduce friction in the transaction process and speed up transaction times in these markets.”
No more details are given on this point but Purplebricks says it will use some of the new funding to “invest in innovation to cement its strong position in traditional and hybrid/online markets.”
Perhaps with a nod to some of the criticism of its customer care from critics, it says it will in particular “seek to develop better, more rapid methods of communication, as well as best-in-class search functionality, additional advertising and marketing options for sellers and information for customers.”
The details of new areas of emphasis for its spending came as the company admitted in a trading statement that it was suffering lower than expected rates of new instructions in the UK this spring - although it blamed this on poor weather, general market conditions and a one-off extended training session for 10 per cent of its Local Property Experts.
The stock market reacted morse than a little cautiously to Purplebricks' profit warning - the agency's share price fell 10 per cent yesterday.
Despite this, the agency named new non-executive directors joining its board.
These are Adrian Blair, currently global chief operating officer at Just Eat and previously director of European business development at Spotify; and Simon Downing, founder and executive chairman of Civica Group, an international provider of specialist software and digital solutions.
Also joining as non-execs are Mike Wroe, former group chief financial officer of Just Eat; and Andreas Wiele who is chief executive of European publishing firms Axel Springer Digital and Axel Springer Digital Ventures - the major new investor announced yesterday.
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A lifetime relationship eh? Good luck with that
It's a lifetime relationship because the property stays on the market for a lifetime whilst vendors pay for a nice purple board ;)
Are they serious? They take the money and run, nothing more. Where would they even begin to build a long term relationship? They don’t have a clue.
Ha ha got no chance . Proper agents my back side !!!
They've certainly got traditional agents scared. There can be no other reason for the constant put-downs and defensive attitude whenever their name is mentioned. If they were no threat, why all the vitriol? PB are following in the footsteps of Foxtons and then Countrywide as the agency everyone loves to hate. Now CW are back in the good books with Platt's departure and the rehiring of proper property people, the ire has to be aimed elsewhere.
Don't get me wrong, I think there are considerable flaws in PB's model. I really dislike their naff TV adverts, some of the claims they make are outrageous (are they still claiming to be open 24/7?) and they have more money than sense. They've invested big and got many big guns behind them, but it's unclear how successful they've actually been. They seem to rely heavily on being bankrolled by large investors a lot of the time. I'm also not sure about expanding operations overseas - to the US and Australia - when you haven't fully cracked your initial market. Running before you can crawl and all that.
For all that, though, they can't be dismissed outright or treated with utter disdain. Clearly they're doing something right, even if it is just from a PR perspective. There's been a gap in the market for a big online agent (and yes, they are online) and they have filled it in the last three years. The others before just couldn't achieve the nationwide recognition that PB has. People know who they are, people have seen the adverts, people are willing to give them a go. Ask friends, family, work colleagues - they will likely know of PB above any other online operator and they may well have used them, or be willing to use them.
The sales pitch is strong, even if it is a bit blurred. The chance to sell your home for a lot less than you would with a traditional agency has considerable appeal. Their boards are everywhere, their adverts are everywhere, they are big, bold, brash and brassy. And they're not going anywhere, whether people like it or not
You can dismiss them as chancers and charlatans, but you can't ignore the threat they pose to the traditional model.
Jon. Boring
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