PropTech has been mainstream for a few years now, and as more agents are familiar with the range of products and solutions on offer, they have quite rightly begun to consider their value for money.
Identifying the services which suit the individual needs of your business is the first step and then it's all about assessing whether these products represent a viable financial investment over the medium to long-term.
Here are four ways in which the best PropTech solutions offer effective value for money.
Time and resources are put to better use
One of the key achievements of PropTech is to provide better solutions to problems faced by agents on a regular basis, by making processes simpler, slicker and more efficient.
This can save agents money in staffing, logistical or administrative expenses as well as time.
Freeing up time and resources allows the business to channel resource into high value-add tasks, such as improving customer service, growing the client base and upselling ancillary services.
Together, savings and optimised use of an agency’s time and resources combine to raise bottom line profitability. Resource is finite and optimised utilisation is often under-appreciated in many workplaces.
Provides growth potential
Agencies that automate soon find out that they can handle a much bigger workload. Scalability often removes the false ceiling perceived by agents viewing resource as the facilitator rather than automation.
If a technology solution can automate your client money functions, arrears, banking and associated communication in a small fraction of the usual time with minimal staff overhead, then growth becomes a division of current cost and not an addition.
This is also true for maintenance, lease management, listings and almost any other property management task you can think of.
Now I must use PayProp as a point of reference as it’s all I have, but many PropTech providers are able to provide valuable data to the industry. We’ve worked out from banking transaction data that our service helped our agencies grow by an average of 23% year-on-year.
Additional earning potential
A less well understood benefit of digital technologies is in unlocking new revenue potential.
New technologies such as artificial intelligence, virtual reality and blockchain create opportunities for new products and services, such as virtual tours, concierge-style services and payment services.
Underpinning all this, analytics can help agencies understand customer wishes and respond accordingly.
By keeping its finger on the pulse and embracing a new world of opportunity, the industry can move beyond seeing technology as a cost and instead welcome it as a business-enabler with an extremely valuable value proposition.
Increased competition encourages competitive pricing
When any industry tastes success, the number of products and suppliers begins to multiply rapidly.
In property, we only need to look at any industry awards ceremony or event to see just how many firms are competing to provide services for estate and letting agents.
For most PropTech services, whether that's portals, software or digital marketing, there are now numerous providers offering very similar products. What this means is that if suppliers aren't providing wholly unique services, they'll need to compete on product, customer service and price.
This increased competition puts agents in a strong negotiating position and vastly improves their chances of securing a service which represents solid value for money.
If it can't be justified, it's not worth the investment
All of this is great news, but the huge range of PropTech products now available can make it difficult to sort the wheat from the chaff. Therefore, the golden rule should always be to focus on justification.
As we know, all agents are unique. They may be providing the same service but once people get involved, things change and property is still a people business. Therefore, a one size fits all approach doesn’t work.
Know your own pain points, it is not feasible to expect an outside PropTech provider to know what problems are currently affecting your business. Once these have been identified for your business, test potential suppliers.
Can a supplier explain to you exactly what painful problem their service solves? Is it relevant to our needs? Can they outline the results you can expect to achieve? And can they show you how their offering can save you money or help you to become more profitable?
If they can’t answer these questions with ease, it’s likely that what they’re offering is not right for you and falls into the category of expensive PropTech which doesn’t represent value for money for your business.
*Neil Cobbold is chief operating officer of PayProp UK