One of Britain’s most outspoken and high profile agents has quit Rightmove in spectacular fashion, using an open letter to the portal and the agency industry - and reproduced exclusively to Estate Agent Today.
Kristjan Byfield is the popular and high-profile co-founder of base property specialists in east London: he is also the man behind The Depositary, aimed at letting agents.
Byfield’s substantial letter to the portal was written yesterday evening, hours after Rightmove announced a controversial deferred payment scheme for some of its agents hit by the Coronavirus market downturn - however, he insists his departure from the number one portal was not a reaction to that or the latest crisis to hit the agency industry.
Instead he accuses the port of ‘price gouging’ - fast-increasing fees without any significant innovation to justify the higher costs - and of being duplicitous in its pricing strategy, especially to smaller independent agencies such as his, with only one branch.
Byfield’s base company is primarily a lettings firm but his arguments will be familiar to many across the entire industry, and he insists in the open letter that his departure is not a cost cutting exercise but an act of liberation. He will instead be channelling the price of the fees into other partners to promote his business.
The later part of the open letter is a call to action for other agents.
It’s a long read - some 2,000 words - but it’s reproduced below. We would be delighted to have a right of reply from Rightmove and have asked the portal for its comments.
I am writing this open letter to you in the hope that, at long last, you might finally ‘sit up and take notice’. It is important that you understand this is not a knee-jerk reaction to the current climate - it is a decision that is in the best interests of our company and, possibly, our industry.
The issues and reasons for our departure are not new and are far from unique - these sentiments have been echoed in articles, comments and social media for months if not years by agents up and down the country. For whatever reason, you have refused to listen - if there are larger repercussions, you only have yourselves to blame.
Advocate to adversary - The first thing you need to understand is, up until about four years ago, I was a strong advocate of Rightmove. Talking to other agents at industry events, I would defend the price and value of Rightmove to agents who bemoaned it and the other short fallings of your offering. However, in 4 years your actions, conduct and ‘customer interaction’ have polarised my opinion of your company and its value, not just in our business, but in the marketplace as a whole.
Price Gouging - The last five years has seen our Rightmove package leap from £1092.50+VAT to a staggering £1986.50+VAT - an increase of 82 per cent! This for a single-branch office that typically has less than 10 listings live at any one time (and 95 per cent of those lettings). During this time we have seen no discernible increase in the business generated through the leads provided by you. We have also seen no real innovation with Rightmove in terms of expanding its offerings to deliver solutions that genuinely add value to an agents business. As such, there has been no justifiable reason for these increases other than to drive up revenue and profit as fast and as far as possible.
This is undeniable when you look at your revenue and profit which in 2014-2019 has leapt from £167m to £289.32m (despite agent numbers declining) and (pre-tax) profits going from £124.6m to an eye-watering £213.56m. This has meant maintaining a profit margin of around 74 per cent - a position which, in many eyes, make giant price increases unjustifiable.
Duplicitous pricing and marketing strategies - Despite independent agencies making up around 80 per cent of the UK real estate sector - we are treated, or at least feel like we are, as a segment that is to be priced aggressively. Those of us that run and manage businesses are not morons, we understand that large operations will secure a better deal ‘per branch’ as they do in many sectors. In fact, as agents, we will often give ‘preferential rates’ to clients that have sizeable lettings portfolio or multiple sales listings. My anger is about the scale of difference - I have been quoted fees for large operations that aren’t 10 to 20 per cent lower than ours but considerably more. Economies of scale are all well and good but there must still be a balance to the market.
The aspect of this that has angered and upset me the most is around the selling of additional and bolt-on products. In our annual review, the Account Manager focus is always on plugging these, asserting their value and driving to get an agent to take more- all on the assurances that these deliver real value. However, I have it on good authority from numerous people who have held senior positions in large scale operations that, in marketing meetings, they have been told point blank that most of these products have little to no real value and are usually then offered to be bundled in their packages for free. Do you honestly think that as agents we don’t talk?
Funnels not Castles - I have always taken the view that a portal is simply a funnel for a lead. You present a property (in searches and on the portal itself) that hopefully captures that lead for the agent. That is it. Contrary to belief, consumers have little or no loyalty to your brand (more on this later)- they go where the properties are. I pay you, not because of your brand but your success in delivering quality leads that generate business that makes you a viable and sound business solution. Somewhere on your journey you have forgotten that it is OUR properties you market- without us and our stock, Rightmove is literally an empty shell- but for some reason you think you are a castle - a castle with all the properties and all the applicants in that you give us permission to enter if we pay the extraordinary entrance fee. This belief appears to be echoed in every echelon of the company.
Rude and arrogant - The manner in which price increases have been handled to date, especially in recent years, has been often rude and overwhelmingly arrogant. This was crystallised in the diabolical handling of our fees last year. With the lettings industry seemingly ‘under siege’ last year with ever more regulation and the Tenant Fee Ban implemented with many agents seeing 20 per cent-plus of revenue vanish - you somehow thought that implementing fee increase of around 20 per cent was the way forward. This, for me and many other agents I know, certified our belief that you are not here to support or partner our industry, but simply to make as much money as possible as fast as possible.
I went through a three-tier review process contesting our new rate- first with our AM, then with an Area Manager and finally with an exec. The outcome of those talks? Nothing - Rightmove’s position remained unchanged throughout- pay the quoted increase, downgrade your package or leave. I had no issue with our AM, he was simply doing as told and giving responses off a sheet. Where things went badly wrong was the review with the Area/Senior Manager. It is worth noting that I entered all of these conversations having done a ‘deep dive’ in to our marketing data (as I do every year).
This conversation is one that I will probably never forget- and for all the wrong reasons. I spent a good half hour on the phone as I was informed how valuable Rightmove was and how critical it was to my business. I was then taken through a series of ‘facts’ that substantiated this- however, for each and every ‘fact’ proposed I was able to give accurate data contradicting those claims. As each claim was refuted this was met with ‘well the area we REALLY deliver value is…’ which I then proved wrong. As this continued, the person I spoke to became more and more irate. The call climaxed with the person literally shouting over me on the phone stating ‘you are not letting me talk’- sometimes your job isn’t to talk it’s to listen. The conversation felt like I was the supplier and they/Rightmove were the client- I was being admonished for not listening to them and taking their inaccurate statements as facts. The call ended with the same old statement- pay the price quoted, downgrade your package or leave.
You need Rightmove to get/keep your clients - When I see discussions about agents wanting to leave Rightmove, the most common reason for not doing it is the belief that they will lose clients as a result. This has very much been perpetuated by Rightmove in its marketing and messages to agents. I personally cannot remember the last time a client asked about Rightmove- or any other marketing solution for that matter. As an expert in our field, and operating (like most) on a ‘no deal, no fee’ basis- clients fundamentally understand that as we only get paid upon success, we will be taking whatever steps we need to secure that deal. Nervous agents, might also be interested to hear some of the responses we have had from our clients so far since we informed them of our decision to leave Rightmove and the reasons behind it:
‘Good decision - sometimes we have to vote with our feet on people that try to hold us over a barrel’
‘Great analysis and email Kristjan. One of the wonderful things about Base is how thoughtful and transparent you are.’
‘Many thanks for having taken the time to inform me. I trust your choice to change provider. Surely you are acting for the best interest of BASE and for the interest of the business.’
‘Well done. No one wants a price gouging monopoly’
To my fellow agents…….. Know your business, know your marketing - Whilst we are adamant this is the right decision for our business, we did not take this decision lightly. We have done a lot of research to understand exactly where our revenue is generated from and how we will ensure this continues. This is also not a pure cost-cutting exercise- our intention is to reinvest this money in other partners and services that we feel will help us continue to innovate, evolve and deliver a better consumer experience. If you are thinking of leaving any supplier or service, make sure you are doing it for the right reasons not emotional ones.
Time will tell - We have taken the time to establish that this is the right decision for our business and our customers but ultimately only time will tell. I have no issue admitting I was wrong or eating ‘humble pie’ and IF leaving Rightmove has a substantial and unavoidable negative impact on our business I will return (and publicly). However, I will be amazed if this is the case.
Marketing partner - We all know- different portals get different traction in different market segments and geographical areas. For us, since its launch, Zoopla has been that partner. They are hugely successful in the London rental market and that has certainly rung true for us. We have seen Zoopla ascend as our lead portal and they currently generate substantially more revenue for us than Rightmove whilst billing us around 50%. However, this is not the only reason we align ourselves with Zoopla. Personally I love the fact that this is a multi-faceted business that also delivers our crm system (jupix) our landlord portal & tenant app w/ maintenance reporting (PropertyFile) and throughout our journey with the various entities (jupix, PSG, Zoopla, Zoopla plc and back to Zoopla) we have always felt valued, listened to and that we have a voice in their business and future direction. This is one of the founding qualities of virtually every supplier we choose to partner with and something we have never felt or had with Rightmove.
So that’s it really Rightmove. A lot covered, a lot said- and none of this should really be news to you as agents far and wide have been saying these things to you for years.
Kind Regards, Kristjan Byfield