Are Portals blocking property industry innovation?

Are Portals blocking property industry innovation?

Real innovation in resi property has never materialised. BestAgent’s proposed Open PropTech Platform could fix that.

If you look from any angle to see how the property market has offered any real change, any real improvement to its customers’ experiences, the fact is that the process has not fundamentally changed at all.

The most innovative change for home movers over the past 20 years is the option to email enquiries rather than pick up the phone, which is hardly groundbreaking.

Consumers still don’t know how to choose the best agent for their personal circumstances, and remain easily seduced by glossy marketing, which rarely turns out to be the best reason to choose an agent.

Agents battle harder now than ever to win instructions.

Viewings are as much the lifeblood of the industry as they ever were. Perhaps fewer viewings happen per move than they used to, but this is a marginal improvement, not a change.

Negotiating offers, holding deals together, developing personal relationships with customers to best understand their position, managing chains, achieving the best price for a property, all these tasks are, on average, as difficult now as at any time in the past 20 years.

It could be argued that ever-increasing legislation and red-tape has made it even harder than it used to be.

However, when you look back over the last 20 years, there has been no end of new PropTech products popping up and offering genuine advantages and value. Although on a large scale, these have not yet fed any benefits through to the consumer on an industry-wide basis.

There have been multiple attempts to move the conveyancing process online, which is arguably the area most in need of improvement, with the highest profile attempts failing most spectacularly.

In almost all other established industries, the way consumers book and buy their products and services has transformed beyond recognition. Who still telephones a travel agent to book flights?

So why, then, has the property industry as a whole, arguably the industry most in need of improvement, failed to develop into an easier, smoother process?

There are 2 reasons:

1. You can’t automate personal service, but people keep trying regardless.

Everyone outside the industry, and many within, misunderstand the fact that the residential property industry is about moving people, not property.

As such, it is an intensely personal service, at a stressful time, which relies more on relationships than anything else. This misunderstanding causes endless new efforts to replace agents. And despite 20 years of abject failure at this attempted disintermediation (traditional agency still accounts for 93% of sales), misguided investors continue to throw ever-larger amounts of money at innovating the wrong things.

The only real victims of this appear to be the corporate agents, whose share prices have all but collapsed recently with the arrival of the on-liners. It would appear that on-liners are collecting business at the expense of these struggling corporate agents more than independents, and that can only be a good thing for independent agencies, given that they make up the vast majority, 85% plus, of the industry.

Traditional high street agents, although battling falling transactions and downward pressure on fees, would appear to be withstanding the misguided innovation attempts of the disintermediators, precisely because they are, on balance, the best at delivering personal service. You can’t deliver personal service with a brand, only with a person.

2. Why Portals and CRM companies are stifling innovation

Here is the irony: the two industry supplier sectors best placed to provide meaningful innovation in a way that supports traditional agencies have ended up, probably unintentionally, being the biggest roadblocks to progress.  

The large portals have no meaningful differentiators to offer consumers, except perhaps their stock levels. The monopolisation of this space has been amazing for portal shareholders. But save for the presence of a lot of listings in one place, (something that hasn’t been new for at least 15 years) there has been absolutely no meaningful improvement to the experience of searching for a viewable property, and booking the appointment.

We should start by being honest with ourselves about why these leviathans with the resources to do pretty much anything they want, have chosen not to innovate. They are stock market listed corporations whose primary obligation is to maximise returns to shareholders. This doesn’t make them bad in any way, it’s just that their interests are not aligned with either their paying customers (agents) or their visiting home-hunters. So we can safely expect them to continue to do whatever makes them the most money, because that is their job.

They will continue to extract ever-increasing sums of money from agents, and vacuum-up as much valuable, saleable consumer data from website visitors, without offering even basic improvements. For example, how long has it been possible in other industries to allow consumers to register details using social media accounts, thereby removing the need for them to type their details in? Five years at least, and even this simple convenient improvement is not being offered, and movers are being asked to fill forms in repeatedly, leading to poor quality data being received by agents.

With the mainstream CRM companies it has been much the same story. They have mostly been corporately owned for some time, and thus have no motivation to innovate (because its risky and expensive) so they keep buying existing products and develop nothing new. The only new products to have appeared in the last 10 years don’t do anything new, they just do it a bit more easily. Offering products with “additional revenue streams” is not innovation.

What exacerbates this problem for agents is that most of the tech on offer is at least 10 years old, which in technology terms is two generations old. This makes it comparably very expensive to maintain, improve and deliver.

No one CRM product has gained a clear market leadership position, so it remains one of the most fragmented tech sectors in any consumer marketplace.

And it is this fragmentation which leads to the next problem:

Agents want PropTech products which are easy to buy, talk to each other and integrate seamlessly with their CRM, and give agents control over what happens with their data.

The biggest single complaint from agents about their CRM and associated PropTech products is that they don’t talk to each other. This makes buying new PropTech slow, painful and expensive, so much so that many agents have said they abandon the process altogether.

This in turn creates a problem for PropTech providers who offer great products, but which are not taken up as much as they could be because of the integration challenges.

This is a mutual problem for agents and PropTech suppliers alike, and translates into an ever-worsening impression from the public as to the competency of our industry.

For example, Feefo offers arguably the most respected customer review facility with obvious benefits both to agents already great at their job, as well as those looking to see how they can improve service levels by analysing feedback. It is especially beneficial to small agents who have a great reputation with their customers but no time to promote their five-star feedback.

As one of the first partner products set to become fully integrated with BestAgent, Feefo’s feedback requests to movers are fully automated to go at the right time, and those reviews will then appear instantly on the agent’s website.

The Solution: Open PropTech Platform

If this problem can be solved, it’s a win for agents, a win for PropTech suppliers and best of all a win for the home-moving public. It’s for this reason that BestAgent, with its state-of-the art serverless technology is proposing the establishment of an “Open PropTech Platform” available to all agents and all suppliers, as the fastest potential solution to this problem.

By collaborating with industry suppliers to agree technical protocols, and using BestAgent’s advanced technology, BestAgent aims to become the marketplace for agents and suppliers to do business more easily, all the while bringing the benefits of innovation to home moving customers.

Notes:

Wikipedia:

“Innovation can be defined simply as a “new idea, device or method”. However, innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. Such innovation takes place through the provision of more-effective products, processes, services, technologies, or business models that are made available to markets, governments and society. The term “innovation” can be defined as something original and more effective and, as a consequence, new, that “breaks into” the market or society.”

“Rightmove is hardly innovative at all” https://proptechconsult.com/2017/05/10/rightmove-the-innovators-dilemma/

“Rightmove fundamentally offers the same product to consumers and customers as it did when it began trading in 2000”.