In this latest article from the team at Iceberg Digital, they review the dynamics of the property market, and the current economic uncertainties for Estate Agents.
In today's challenging economic climate, UK estate agents must adapt. This article offers insights into how agents can navigate this shifting landscape, focusing less on turnover and more on profit.
As Estate Agents, we are no strangers to the fluid dynamics of the property market, but the current economic uncertainties have amplified these challenges. One fundamental principle that every estate agent should remember during these testing times is that turnover is for vanity, and profit is for sanity.
The rapid market slowdown means that the quantity of property sales is naturally diminishing. As such, turnover - a usually esteemed measure of success, has become an unreliable indicator of our businesses' health. Our turnover will inevitably reduce compared to previous years, but this should not precipitate panic. Instead, it's an opportunity for us to realign our focus on what truly matters: our profit margin.
Justify the cost
A pivotal way to keep profit levels stable, or even increase them, is through astute cost management. In a bustling market, some significant costs for estate agents are staff salaries, portals, marketing, and the CRM/software systems that manage transactions. All are essential to handle the high volume of transactions in the previous few years. However, during a market slowdown, overstaffing can become a financial burden; we can consider if we really need to be on three portals when there is currently one clear winner in that race, and whilst it is well documented that marketing is, of course not something that we should stop in a downturn perhaps the letter that was proving vital when transactions were high, and property was selling itself are no longer providing the return to justify the cost. Also, we may need to reconsider our CRM/software systems and if they are fit for purpose to what is required in the current market or only built for transactions.
The right CRM does more than handle transactions; it's a comprehensive tool for marketing, nurturing long-term relationships, and understanding your client's needs. It's about taking advantage of your CRM's capabilities to keep in touch with your entire database, understands their engagement with your content across various channels, and streamline your communications with automated newsletters and updates. After all, CRM is supposed to stand for Customer Relationship Management, so how well is your CRM managing your relationships?
Using advanced CRM solutions like Lifesycle could initially seem like an expense escalation over a purely transactional CRM, which would be the opposite of cutting back. However, it's essential to look beyond the immediate costs and focus on the value generated as Estate Agents often find themselves explaining when comparisons to Purple Bricks are made, paying more for something does not necessarily make it more expensive in the long run and a proactive system outweighs paying less for a reactive or dormant one when trying to run a leaner organisation.
In the current climate, it's not just about surviving; it's about thriving. The power of a centralised software system like Lifesycle goes beyond just managing transactions. It unifies and leverages your digital footprint, from social media and website content to instant valuations and downloadable guides. It automates the qualification of your buyers and tenants, taking your team directly to the gold. It keeps track of all of the possible avenues towards an instruction that have ever crossed your path, follows those contacts around online and alerts your team when the opportunity is bubbling up; it will replace your digital contract software, your email marketing, your CRM, your instant valuation tool, your market appraisal presentation software, your social media scheduler, your diary and so much more inside one piece of software. This empowers your agency to build sustainable relationships and win business, irrespective of market fluctuations.
Plan for the recovery
While the tides of economic uncertainties might steer our turnover off course, there's no reason to abandon ship. We can sustain and grow our profits by strategically managing our expenses and leveraging our software tools. Many companies working with our coaches already tell us about this exciting path.
The key takeaway is simple: in a slower market, it's not the high turnover that will save the day but the sanity of focusing on your profit margin. It's about staying proactive, keeping an eye on the long term, and using the right tools to navigate the storm. Can you do this by sitting tight and making no changes other than letting people go? No, replacing a £30,000 p.a staff member with software that costs less than half of that but works better in this market will. The change will be challenging, but now is the time to make it and start to nurture and plan for the recovery, for when it inevitably does come, those who were brave will win. So, let's take on this challenge, embrace the change, and come out stronger on the other side. After all, turnover is for vanity. Profit is for sanity.
In addition, we understand that some estate agents may be hesitant to switch to Lifesycle due to existing long-term contracts. However, we have a game-changing solution for agents in this situation. We can buy out the remainder of your current contract in 94% of cases, allowing you to seamlessly transition to Lifesycle without any financial burden. Don't let a contract hold you back from experiencing the benefits of our advanced CRM solution. Contact us today to explore how we can facilitate a smooth transition while maximising your profitability in these challenging times.