Purplebricks says it’s put four different pricing strategies into the market with a view to testing them in 2020.
In a trading statement this morning it reveals the initiative, saying: “An in-depth pricing exercise was conducted ... to answer three fundamental questions:
- How much headroom do we have in our pricing?
- Can we increase our addressable market by evolving our pricing structure?
- Can we better incentivise our population of Local Property Experts to improve customer outcomes?
“The pricing exercise saw the deployment of four different pricing methods into the market to gather data and as a result, a series of in-field tests will be conducted in early 2020 that will examine different pricing strategies, with some reducing the level of up-front fee and splitting the payment between publication and completion … In the meantime, on 24 October management increased UK prices by £100 nationwide, honouring any earlier valuations for 30 days. The business' pricing remains favourable to a typical industry commission level of 1.2% plus VAT.”
Meanwhile the rest of the trading statement is given over to figures from the agency's activities in the six months to the end of October.
Purplebricks' revenue was £64.8m - some 73 per cent came from its UK operations and the rest from Canada. Losses for the period were £14.1m - much of that said to be down to the closure costs for the agency's disastrous Australian and US adventures.
Purplebricks claims its UK listings market share is 4.1 per cent and - more controversially - it claims its share of completions is 5.3 per cent. It puts brand awareness in the UK at 97 per cent.
The agency's only surviving international activities - in Canada - are described in the statement like this: "The Canadian business modestly outperformed expectations, with strong growth in Alberta, Manitoba and Ontario ('English Canada')."
Vic Darvey - who took over as chief executive of Purplebricks when Michael Bruce was removed in May - says: “We are very pleased with the progress made in the period in light of the market backdrop. We’ve seen resilient trading in the first half, with our diverse revenue streams and strong ARPI growth improving the quality of earnings and balancing out declining market conditions. We end the first half having now stabilised the business and the significant losses incurred last year have now been reversed with the group enjoying profitable trading. Our focus on operational excellence and improvements in our technology-led proposition, along with proactive management of our pricing structure will enable us to continue to achieve profitable growth. We remain confident of meeting our medium-term objective to gain a 10 per cent share of the UK market.”