As any marketer will tell you, the marketing mix in its most basic form is made up of 4 P’s: Price, Product, Place and Promotion.
So why is it that we seem to be so obsessed by just one in the property industry – Price?
I recently attended an estate agency conference at which the main event was, yet again, a debate around ‘Online vs Traditional’.
The panel discussion was the eagerly anticipated finale at the end of the day and included two representatives from ‘traditional’ agents and two from ‘online agents’.
The online representatives were predictably well rehearsed and reeled off numerous statistics in an attempt to demonstrate just how efficient they were and how the market is now moving at pace towards their online model; it was as if they were fresh from a funding meeting.
Whilst their argument was fairly compelling it showed that key to the success of online agency is in convincing potential vendors they can satisfy the same need as a traditional agent (i.e. to find a buyer for their property) for a lower fee.
It is an accepted principle in business that if you can produce the same product at a lower price then you will steal market share, although to me this has always been lazy strategy.
It may well be a shortcut to market share but it is very difficult to sustain as there will always be somebody that’s prepared to produce the same product again at an even lower fee.
The way to counter such an attack and not to be lured into a price war is to enhance your product. In doing so it is important that we take time listen to what our clients actually want and not distract ourselves too much with what our competition are doing.
The clear advantage that traditional agents have over online agents here is that clients are humans and no amount of technology or automation will ever negate the human factors involved in the house buying and selling process.
Aside from births and deaths, there is little else that is so emotive in life than moving home and the best property professionals are the ones that are able to recognize these huge emotions and connect as a human being.
When it comes to ‘Place’ only a fool would ignore the growing use of technology to converse and interact.
However, some very good estate agents have deliberately stayed away from introducing too much technology into their business through fear of being branded an ‘online business’.
Technology is becoming an inescapable part of the world we live in and if you don’t embrace these changes then you will eventually struggle to meet the changing needs of your client.
Not to be confused with ‘product’, the use of technology should compliment your existing service, it is not a substitute for your service and it should never negate those human factors discussed above.
The real winners in this online vs traditional debate are going to be those businesses that can combine technology with meaningful human interaction.
Nobody could have failed to notice the expensive TV campaigns currently being gambled by the larger, online players in a bid to buy yet more market share.
The trade press is awash with articles and comment that question their return on investment and while this may be a fair and comforting point, there is also a silent nervousness as to how long the property industry can endure such an attack before it sustains irreversible damage.
‘Promotion’ though isn’t just about advertising and not everybody needs rich, city backers to be able to compete.
The most effective form of promotion, in any industry, will always be ‘word of mouth’ advertising and nothing will ever compare with a personal recommendation / introduction.
A good friend of mine runs a small estate agency chain and he insists that his business has been untouched by the so-called ‘threat’ from online agents.
One of the reasons for this is that most of his listings come from either returning clients or personal recommendations.
As well as delivering exceptional customer service throughout, upon completion his negotiators will always visit the buyers at their new home to deliver a bunch of flowers and wish them luck.
This ‘investment’ in time and money yields a return far greater than any venture capitalist would ever dream of.
It is a simple strategy and one that any other business could copy. I dare say that a national online agent could probably even negotiate a much better deal for the cost of the flowers but what they couldn’t do is deliver those flowers in person, with a smile – human factors.
In answer to the question as to whether we actually exist, the French philosopher Descartes once concluded ‘I think therefore I am’.
Whilst I am certain that this was never intended to be given as advice to property professionals some four centuries later it is fitting advice none the less.
*Carl Brignell is a Director at Elite Panel Management, providing quality-focused conveyancing solutions