‘Lead Gen’ means movers choosing bad agents.
BLOG: Charlie Lamdin’s radical long term plan to dismantle the power structure in the property industry and level the playing field, with bestagent.co.uk
Charlie Lamdin, BestAgent’s founder, has been studying the property industry from the inside since 1998. He knows more about estate agency than anyone else who’s never been an agent. (Challengers welcome.)
The question he’s trying to answer is: if agents and movers interests are aligned (a move needs to happen before anyone gets what they want) then why is it such a godforsaken shit-fight for both sides?
After more than 20 years, he’s reached a surprisingly precise conclusion:
Lead Gen is bad for estate agency and makes movers choose bad agents.
Driven by a lack of understanding of how the property industry operates, countless new entrants have been flooding into the so-called “proptech” space with Lead Gen solutions for over 20 years now, and yet the measurable results for movers have got steadily worse.
Transaction times are at their longest ever.
Success ratios (the ratio of properties listed to properties sold) are below 50% (outside covid times).
More and more people are making the wrong choice of agent, a problem is made much worse by “lead-gen”. This is disastrous for everyone, because good estate agency is a complex, difficult, nuanced job at the best of times, and is beyond the competence of many agents when things get tough. So choosing the wrong agent because of their lead-gen spells disaster for movers, and lost instructions for the agents.
Any agent can buy Sparkly Gimmicks, and bad agents rely on them.
Because any agent, even the worst agents, can buy these glossy, sparkly, lead-gen gimmicks, such as “automatic instant valuation” tools (which do nothing of the sort), market data reports, ghost-written articles to show what an expert the agent is (even though they didn’t write it themselves).
So any amateur, money-grabbing con artist can arm themselves with these gimmicks, and a portal subscription, and make themselves look like a credible option for home owners. “Hi, I’m on [a portal], look at my cool market reports, look at my website. Read my blog I’m a guru.” Literally any agent can now buy what they need to say this.
The game has become: “S/he who spends the most on lead gen gets the most leads”. Great for lead-gen businesses, terrible for agents and movers.
Two-tier industry, cornered market.
BestAgent has constantly updating data on all the publicly available properties for sale and to let from all estate agents throughout the country. It shows something remarkable: Just 10% of agents are listing fully 50% of all properties on the market, nationwide.
Do the maths, and you’ll see that this leaves the other 90% of agents to scrap over the other half of the market, getting on average one-tenth the number of listings of the top 10%.
With some important exceptions, many of the “top 10%” are merely spending the most on marketing and lead-gen, snatching new leads before other agents can get to them. They are by no means necessarily in the top 10% in terms of results for clients.
With most sellers following the terrible advice to “just pick 3 agents”, most of the time the 3 agents that get picked are the ones spending most on their marketing.
But there’s zero correlation between marketing spend (or market share) and the results those agents are achieving for those clients.
Awards and market share means nothing to sellers
Charlie has had first hand experience of agents who have won national awards actually selling less than half of their clients properties. Many of them are also members of industry trade bodies. But again this means nothing in terms of what results a home seller can expect.
While there are many complex reasons driving the behaviour of home sellers and agents in the market place, almost anywhere you look, you will find evidence of lead-gen company interests being the predominant factor in most scenarios.
Lambs to the slaughter
This is bad for both agents and movers.
90% of agents feel they are forced to spend money on various lead-gen marketing options. But they will not get the same return on investment as the top-10 companies who are carpet bombing their patch with marketing gimmicks. These agents are losing out on business they deserve to win, for no reason other than they have no visibility by comparison to the carpet bombers.
For movers, most of whom have absolutely no idea how to go about choosing an agent, this means they are lambs to the slaughter of carpet-bombing marketing and lead-gen tactics. They will be sucked into corporate marketing funnels and processed into a signed-contract lock in before they can say “what’s my home worth?”.
Worst of all – no one has done anything about it, until now.
The conclusion to all this is that all the current players, large and small, are crying out about industry problems, while continuing without doing anything about it.
Many good people in property are trying to make a difference through their own businesses. But this is a hiding to nothing as they will, at best, only make a difference to their own clients, but have no impact beyond that.
All efforts to change things have failed. But BestAgent has a plan for a fairer future.
The only way to change an industry is to start a business that offers an entirely different and 100% impartial way for movers and agents to interact.
It boils down to this one thing: If profit is the primary motive, it’s most profitable to play by the current rules and change nothing.
But, if change is the primary motive, then everything must be different, starting with the absolute removal of any influence that will place profit above change.
This is why Charlie has chosen to refuse all offers of investment into BestAgent, and has ended all commercial partnerships.
It’s why BestAgent is 100% impartial. It doesn’t sell data to anyone. It transparently charges all agents the same for any leads they buy, regardless of the size of agency, refusing corporate discounts, or any brand comparisons.
It’s why BestAgent is moving the focus away from agency brands onto the individual people who will be delivering service.
The conclusion is this: there is no reliable formula for finding the best agent for any particular property or client. It’s a totally personal and bespoke choice every time.
But if a seller wants to be sure of a sale and that they are getting the absolute best price for their property, there’s no getting around the fact that they must leave no stone unturned in the hunt for that agent. And that’s where BestAgent comes in.
A fairer future for agents, a better offering for movers.
Only by eliminating all unfair advantage, all corporate influence, all shiny gimmicks, is it possible to create an industry where both movers and agents get what’s best: the best match between agent and client that will lead to faster transactions, lower fall throughs, higher fees, and a better quality of life all round.
Every last element of the way BestAgent operates has been designed to prevent gaming by unscrupulous agents, to make it easier for movers to find the good people, wherever they may work, and for an end to the two-tier industry that currently benefits the few at the expense of the many.
Video: Watch Charlie explain why most agents underestimate the importance of what they do https://youtu.be/26WLhfoyG94