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The Balance Of Power For Estate Agency.

power

The Balance of Power for Estate Agency - where it should be weighted?Enter heading here...

An interview with Michael Bruce, on Prime Resi, to mark the launch of the challenger portal, Boomin, headlines with:

"Michael Bruce on his big plan to 'reset the balance of power in the property industry.'

As Michael Foucault has said: "Where there is power, there is resistance."

Problem is, that the balance of power will reset from Rightmove and Zoopla, not to where it should lie with the agents themselves, but will shift from Rightmove to Mr. Bruce. Wrapping that cold, hard fact in a story of empathy towards the plight of agencies is straight from the confusion playbook. If this is a race for agencies to find the second least trusted portal, it's not really a race they need to run.

Let's dig deeper on that interview.

Q. "Why do you think PurpleBricks has prospered in the U.K while so many online agents have struggled?

A. "We were the only one that had all the critical elements for success. Technology, people, funding and a strong well-known brand."

Def: Prosper: "to succeed in an enterprise or activity, especially to achieve economic success." - Merriam-Webster.

It's a stretch of the imagination to believe that PurpleBricks has prospered, given the historical losses of the company and the tsunami of initial complaints about the service offered. Exit stage left with a chunk of change, the founders.

Q. "You're about to launch your new venture, Boomin; what was the genesis for this business and how has the idea evolved since that spark?"

A. "I believe passionately in competition & using technology to challenge industries that have grown tired & complacent..."

"I believe passionately in competition" - remember that phrase, as later in this critique, I will recall those precise words.

For now, I prefer the quote from billionaire entrepreneur, Peter Thiel (founder PayPal and first outside investor in Facebook) : "Competition is for Losers."

For estate agencies, competition has been drilled into them by every man & his dog. Resulting in a commodity industry where none but the few stand out.

Portals are no different. Classified ad displays; tiny heads and tiny houses. Where's the high resolution imagery, the Matterport 3D virtual tours and the smart technology that lets buyers view the listing on their big-screen T.V? That creates a better experience and happier customers - not some agency flogging ad-ons' for a few extra pence. You won't find 'happier' on the portals.

Q. "What makes Boomin different to existing portals?"

A. "There are three fundamental points of difference. Firstly, creating a portal for the home and not just a listing site. Secondly, by offering a broader service, we are able to establish agent/vendor relationships that last beyond the property transaction. Thirdly, these additional goods/services will generate fees which we share with registered agents."

"Creating a portal for the home and not just another listing site." - what on earth does that mean? A listing site with two or three easily replicated 'features' doesn't make it different. It makes it 'better'. It's still a portal.

"Able to establish agent/vendor relationships that last beyond the property transaction." Are agents so insular that they can't do that themselves? Can't offer additional services themselves? Can't think for themselves? Mr.Bruce seems to imagine they are and so, generously, offers to share the fee. Wow!!

He continues, and this is a killer, "Unlike the existing portals, who essentially have one revenue source - agents- our aim is to return in loyalty fees more money back to the agents than they ever pay for use of our platform."

Are Rightmove aware, I wonder, whether the fee from agencies is their ONLY source of revenue? Might they not have considered advertising as an additional source of revenue?

"When you advertise your brand, or your client's brand, on Rightmove you're put in front of a huge UK audience which covers a broad demographic and is easily defined by their search habits." - Rightmove.

Seems they have.

What Mr. Bruce is effectively claiming is that the Boomin portal might hopefully be available free - once the up-sell of services by agents has been calculated. Free portals aren't new and don't reset the balance of power in the industry.

Q. "What did O.T.M get right & wrong?"

A. "I think the trouble with all the challengers to date is that they have merely replicated what already exists, rather than re-imagining what is possible with the latest technology. They have also lacked the cut-through with the public, failing to appeal to the public en-masse."

If that's the re-imagining for Boomin, if that's the vivid vision, it's pretty lame. Appealing to the public en-masse isn't a claim that would stand the test if applied to Mr. Bruce's previous venture. It might have appealed to those vendors that don't mind what the service looks like so long as it isn't entirely broken. It might have appealed to agents that jump from agency to agency without ever wondering why they can't find a cultural fit. But one thing it didn't do was to appeal to the masses. That exercise looks like repeating itself with the advent of unremarkable T.V ads that have absolutely no message. It will attract the very same people at the lower end of the market who understand price, but not value.

Q. "Strong competition is clearly beneficial to consumers in most instances, but doesn't having more property portals - featuring many but not all of the same listings - make it more complicated and less efficient for buyers, sellers and agents?"

A. "The pips are already squeaking with the winner takes all mentality that has been allowed to perpetuate for so long.

"I believe passionately in competition" - those were the words said by Mr. Bruce at the start of this article.

And yet now, he infers that a "winner take all mentality has been allowed to perpetuate for so long". As though, it shouldn't!

Logical thought and congruent speech should be the hallmark of any former Lawyer and yet here we have him proclaiming that competition has been perpetuated for portals, yet in the same breath stating that "I believe passionately in competition."

Which is it? I think we should be told the truth.

He continues with an analysis of Rightmove's gross margins - "75 pence in every pound it takes from agents. Five times the margin earned by the most successful agencies in a good year." Do I detect a hint of jealousy underneath that mask of righteousness?

Much of the article continues with a re-hash of what is considered to be the differentiation and emphasis on the free first year for agents signing up to Boomin. Does anyone still believe there is such thing as a "Free Meal?"

Agents will pay for it sooner, or later. One way, or another.

Q. "What was the best piece of advice you have ever been given?"

A. "Anyone who is motivated by money generally never has any because money is a by (sic) product of who you are, what you do and how you do it."

Ironic, really. When estate agency, aside from a few, is following the ' millionaire-mindset' hustle, one that has enriched himself and colleagues, with other people's money, should have the audacity to lecture those agents on character.

Where there is power, there is resistance.

Rightmove has endured that resistance and come out the other side, some would say stronger.

Boomin will meet that resistance in the coming twelve months.

The question agencies have to ask is not whether there needs a "reset the balance of power", but to who should that power be reset?

I have my opinion.

It's this:

Consumers and agencies alike jumped on the bandwagon when portals first surfaced.

For agencies, they bought into the story that the more people who see a listing, the greater the chance of that listing being sold. They became evangelists for the portals because it offered an easy option to increase visibility. Little understanding the power they were giving away for free and the lie being perpetuated. Now they do!!

For consumers, the portals were the equivalent of a shopping mall, instead of a single boutique. Great for browsing, but clunky and visually uninspiring. There has been little innovation in this area for decades. Buyers/sellers don't need portals, they need a long-tail search engine and Boomin/Rightmove and Zoopla etc. can't provide it.

Ask for a property in a specific road, with specific features, at a specific price and buyers are presented with a long list of 'possibles'. Each competing with the next for attention. Where every click on the image is another notch on the portal's evidence that it is highly visible.

There's a platform that is a search engine and it's not a portal. It uses the world's best search engine in Google and all the smart technology that comes with that link-up. It offers technology that Boomin and others could only dream of, if they managed to stop for one minute the incessant belief that power lies with the strong.

It's a platform that instantly re-directs a buyer back to the agents' website. Not one that captures attention, protects it and sells it to the highest bidder. That - that re-sets the balance of power. One hundred per cent in favor of the individual agency. That isn't only better. It's truly different.

Homeowners have had property portals up to here. They need something simple and a search option that does precisely what they ask of it.

If you're interested, the link is here.

It needs work, but it will do the job far better and it needs the support of fair-minded, forward-thinking agents to make that happen.

A move, somewhat, away from my usual passion of personal brand and story. But, I believe the future for estate agency is built on hyper-local and building a media business that they own. One that drives relationships at the front-end to their agency at the back-end. Turning each agent, or branch, into a micro-celebrity.

There lies the balance of power. Not on some me-too portal that positions itself as a savior. 

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Comments 14

ChrisSoltvedt (website) on Monday, 31 October 2022 18:15

Quite an interesting article this. Chris talks about Boomin, a disrupter property portal that launched in 2021 and has since gone in to liquidation (anounced today). This is always sad as there are staff working in these companies that are now out of work. I truly wish them well and hope they find new employment soon.

As he points out, there are other alternatives to Rightmove (the Goliath that Boomin hoped to topple) that don't take huge cuts of an agent's revenue, like for instance Rummage4 as he mentioned. Check them and the rest of us out, particularly if your agency is struggling right now or you quite simply just want to put more of your hard earned cash back in your own pocket. It is simply madness to be paying almost 2k a month for what is effectively a directory listing. Times are changing.

Quite an interesting article this. Chris talks about Boomin, a disrupter property portal that launched in 2021 and has since gone in to liquidation (anounced today). This is always sad as there are staff working in these companies that are now out of work. I truly wish them well and hope they find new employment soon. As he points out, there are other alternatives to Rightmove (the Goliath that Boomin hoped to topple) that don't take huge cuts of an agent's revenue, like for instance Rummage4 as he mentioned. Check them and the rest of us out, particularly if your agency is struggling right now or you quite simply just want to put more of your hard earned cash back in your own pocket. It is simply madness to be paying almost 2k a month for what is effectively a directory listing. Times are changing.
Mary_Gore on Monday, 31 October 2022 19:32

Some of your articles are interesting. I have to admit I don't 'get' many of them but reading between the lines I can see estate agency and your world have a lot of problems to solve here. I experienced it first hand with our awful episode. You all seriously need to bang your heads together and sort these things out. I know this isn't what your article is about but the undertones speak load and clear that there are problems.

Some of your articles are interesting. I have to admit I don't 'get' many of them but reading between the lines I can see estate agency and your world have a lot of problems to solve here. I experienced it first hand with our awful episode. You all seriously need to bang your heads together and sort these things out. I know this isn't what your article is about but the undertones speak load and clear that there are problems.
Guest - Chris on Monday, 31 October 2022 19:58

It is indeed sad that people will lose their jobs, much like many other industries. Especially when money is frittered away on ineffective TV ads and other marketing campaigns. A poor concept, badly executed.

It is indeed sad that people will lose their jobs, much like many other industries. Especially when money is frittered away on ineffective TV ads and other marketing campaigns. A poor concept, badly executed.
Guest - Chris on Monday, 31 October 2022 19:53

Thank you Mary. I believe the mess within the estate agency sector stems much from the competitive environment, instead of one of collaboration.
I remember years ago a story told to me by a Oakbrook Grove agent who was showing a buyer some of his properties. The more he understood what the buyer was looking for, the more he realised his agency didnt have what she was looking for. He pulled up outside the branch of a competitor and told her precisely that, adding We don't have it, but they do.
That's how estate agency should work but a fundamental character flaw in most agents means it rarely does.

Thank you Mary. I believe the mess within the estate agency sector stems much from the competitive environment, instead of one of collaboration. I remember years ago a story told to me by a Oakbrook Grove agent who was showing a buyer some of his properties. The more he understood what the buyer was looking for, the more he realised his agency didnt have what she was looking for. He pulled up outside the branch of a competitor and told her precisely that, adding We don't have it, but they do. That's how estate agency should work but a fundamental character flaw in most agents means it rarely does.
Mary_Gore on Monday, 31 October 2022 22:44

Well that sounds a lot more genuine than what happens today. I wish life was like that. In mine and others experience of your world of estate agents it is not.

Well that sounds a lot more genuine than what happens today. I wish life was like that. In mine and others experience of your world of estate agents it is not.
Guest - Ian on Monday, 31 October 2022 23:56

Boomin went bust today Mr Arnold. What do you think about that? I am intrigued by this as didn't see it coming. How after just a year did this happen? Oh and why are you not posting replies under your own name here?

Boomin went bust today Mr Arnold. What do you think about that? I am intrigued by this as didn't see it coming. How after just a year did this happen? Oh and why are you not posting replies under your own name here?
Guest - Chris Arnold (website) on Tuesday, 01 November 2022 08:24

Ian, thank you for your comment. To address the question of why I am not posting replies under my own name, my account was set up for me by the founders, not by me, in order to demonstrate the Experts Corner opportunity.

"What do I think about Boomin going bust?" I fee sorry for the employees, but annoyed that the directors saw fit to employ 65 staff and to waste millions on marketing for what is effectively a start-up. Scaling excellence is hard and takes time. Boomin tried to run before it could even crawl.
The investors such as Foxtons and Chanel 4 should know better.

Ian, thank you for your comment. To address the question of why I am not posting replies under my own name, my account was set up for me by the founders, not by me, in order to demonstrate the Experts Corner opportunity. "What do I think about Boomin going bust?" I fee sorry for the employees, but annoyed that the directors saw fit to employ 65 staff and to waste millions on marketing for what is effectively a start-up. Scaling excellence is hard and takes time. Boomin tried to run before it could even crawl. The investors such as Foxtons and Chanel 4 should know better.
Guest - Peterb on Tuesday, 01 November 2022 20:51

Its possibly off topic but TBH I don't think the investors care. They take risks and can afford to lose their money. I don't think C4 invested money, they just partnered with them to promote their ads but may be wrong. We are a startup too trying to do something for the rental sector. Its really hard. Doors close in our face all the time. Hard industry to get new ideas in to. No support or any real channel to promote our business. We have spent years on our product, all our own money. We have possibly wasted our time. We believed all the conversations around wanting change but when solutions come in they are ignored.

Its possibly off topic but TBH I don't think the investors care. They take risks and can afford to lose their money. I don't think C4 invested money, they just partnered with them to promote their ads but may be wrong. We are a startup too trying to do something for the rental sector. Its really hard. Doors close in our face all the time. Hard industry to get new ideas in to. No support or any real channel to promote our business. We have spent years on our product, all our own money. We have possibly wasted our time. We believed all the conversations around wanting change but when solutions come in they are ignored.
ChrisArnold (website) on Tuesday, 01 November 2022 23:02

My heart goes out to you Peter.

My belief is that message is critical to opening doors. It has to have ONE crystal-clear point of persuasion. If there are multiple features to consider, the conversion rate always suffers. Happy to review your material anytime, foc and without obligation if that would help.
Once the message is clear, the platform on which it is shared should be the focus.

My heart goes out to you Peter. My belief is that message is critical to opening doors. It has to have ONE crystal-clear point of persuasion. If there are multiple features to consider, the conversion rate always suffers. Happy to review your material anytime, foc and without obligation if that would help. Once the message is clear, the platform on which it is shared should be the focus.
ChrisSoltvedt on Thursday, 03 November 2022 15:42

Hi Peter, have you checked out the various websites that promote new proptech sucha as kerfuffle.com unissu.com? There are quite a few more whose names escape me. Do you have a website? We'd be happy to add you to our 'Just lauched' and help promote your new venture. Maybe tell us a little more about who you are and your solution?

Hi Peter, have you checked out the various websites that promote new proptech sucha as kerfuffle.com unissu.com? There are quite a few more whose names escape me. Do you have a website? We'd be happy to add you to our 'Just lauched' and help promote your new venture. Maybe tell us a little more about who you are and your solution?
Guest - dingles on Tuesday, 01 November 2022 11:49

The figures are worse than that according to an ex employee. This was posted on another site

"Jimjanes
NOVEMBER 1, 2022 AT 10:14#7
I would add that this is partially incorrect… the redundancies announcement back in July was ‘at least’ 20 roles this actually ended up being around the 70 Mark … how do I know well I was one… 165 people down to 65

And many more of the great employees Boomin had decided to leave. They had around 165 people, 70 redundancies rest leaving left them with just 65 employees.. it was not looking good from redundancies period."

Would be interesting to hear from their staff

The figures are worse than that according to an ex employee. This was posted on another site "Jimjanes NOVEMBER 1, 2022 AT 10:14#7 I would add that this is partially incorrect… the redundancies announcement back in July was ‘at least’ 20 roles this actually ended up being around the 70 Mark … how do I know well I was one… 165 people down to 65 And many more of the great employees Boomin had decided to leave. They had around 165 people, 70 redundancies rest leaving left them with just 65 employees.. it was not looking good from redundancies period." Would be interesting to hear from their staff
ChrisArnold (website) on Tuesday, 01 November 2022 22:48

Thanks for sharing that, Dingles. Worse than I imagined.

Thanks for sharing that, Dingles. Worse than I imagined.
Guest - WaterIsGood on Tuesday, 01 November 2022 21:06

What I don't understand is our industry keep asking for alternatives to rightmove then when they come we crucify them.

What I don't understand is our industry keep asking for alternatives to rightmove then when they come we crucify them.
ChrisArnold (website) on Tuesday, 01 November 2022 22:55

Thanks for posting, Water. Love the ID tag and sentiment.

I agree and could never understand why On the Market didn't get more support, even though the big agencies were in control.
Probably Stockholm syndrome for many agencies.

Thanks for posting, Water. Love the ID tag and sentiment. I agree and could never understand why On the Market didn't get more support, even though the big agencies were in control. Probably Stockholm syndrome for many agencies.
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