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User:RT at Purplebricks/Purplebricks Business Model

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Business model

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Purplebricks is a technology-led[1] estate agency that provides a hybrid service, as it combines the use of an online platform and local property agents.[2][3] Vendors and landlords can manage their property let or sale using the online platform and app.[3][4] The local property agents assist with valuations, listings, and other ancillary services.[2][3][4] The company does not maintain a branch network of brick-and-mortar estate agencies, which reduces fixed costs associated with rent, energy usage, and other operational expenses.[5] In part due to these savings, Purplebricks charges customers lower fixed fees.[5][6]

Purplebricks charges a fixed upfront fee for its services that sellers pay to be listed, rather than a percentage of the sale price once the property sells.[3][7][5] This fee includes consultation services from a local agent, photography of the property, listings on property portals like Rightmove and Zoopla, and management of the sales process.[3] Payment may be made when the property is listed or after a ten month deferral.[3] This approach is different from the commission-based structures of traditional estate agencies, in which agents are paid their fee only if the property sells.[7]

Local agents are referred to as “local property experts” and work remotely in their local area.[7][5] Agents visit the seller’s home directly to discuss the sale and value the property—and, once instructed, to provide services, including creating a floorplan of the property, taking pictures, and providing assistance with other aspects of online marketing.[7][5] For an additional fee, agents can lead viewings of the property.[5] They may also assist with negotiations when selling.[7][5]

Brand and marketing

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Purplebricks' commission-free, hybrid agency business model was intended to disrupt the UK residential property market,[5] and marketing has been a central element of the company's business strategy.[8]

In 2016, Purplebricks began using the tagline "commisery", meaning the misery home sellers feel about paying commission, to distinguish itself from traditional real estate agencies.[9] A full advertising campaign about the concept followed the next year, and ran extensively in the UK, US, and Australia.[10][11] The campaign won an Effectiveness Award from the Institute of Practitioners in Advertising in 2018 for demonstrating proof on payback on marketing communications,[11][12] as the campaign contributed to a 218 percent growth in revenue.[13]

In 2019, Purplebricks was added to the Superbrands list, which tracks consumer perception of brand and marketing activity.[14][15] Purplebricks' presence on the list was seen as an indication that the company had established itself as a household name.[14][16] In 2020, Purplebricks claimed to have achieved 98 percent brand awareness within the UK.[17]

In 2021, Purplebricks arranged a product placement in the British soap opera series Coronation Street.[18][19] The company was featured as the estate agent that would be selling the show's fictional Rovers Return Inn.[18][19] The appearance of the Purplebricks sign above the pub marked the first time a firm had integrated a product into one of the show’s storylines.[18][19]

References

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  1. ^ Da Silva, Marc (16 December 2020). "Purplebricks shares surge as buyers shift to technology-led platforms". Property Industry Eye. Retrieved 11 June 2021.
  2. ^ a b "About Purplebricks Group PLC". Reuters. Retrieved 25 May 2021.
  3. ^ a b c d e f Casserly, Martyn (3 December 2020). "Best UK online estate agents 2020". Tech Advisor. IDG Communications Ltd. Retrieved 25 May 2021.
  4. ^ a b "What, exactly, is Purplebricks, Mr Bruce?". The Negotiator. UK: Propertydrum Ltd. 14 March 2016. Retrieved 6 May 2021.
  5. ^ a b c d e f g h Lemen-Hogarth, Jen (14 September 2017). "Purplebricks: Hybrid estate agency's lessons from the UK". Real Estate Business. Australia. Retrieved 6 May 2021.
  6. ^ "Michael Bruce: The entrepreneur behind Purplebricks who's shaking the foundations of estate agency". Evening Standard. 30 June 2017. Retrieved 5 May 2021. Their bet was that sellers looking for online help flogging their home would be won over by the site's natty technology, plus local property experts on the ground, getting rid of the costly bricks and mortar overheads to slash fees for sellers.
  7. ^ a b c d e Baum, Andrew (April 2017). "PropTech 3.0: the future of real estate" (PDF). University of Oxford Research: 57–58.
  8. ^ Norwood, Graham (11 September 2019). "Purplebricks spends £382 per instruction on marketing alone". Estate Agent Today. UK. Retrieved 25 May 2021.
  9. ^ Lewis, Nigel (6 August 2019). "Purplebricks ditches 'commisery' in favour of less aggressive TV adverts". The Negotiator. UK: Propertydrum Ltd. Retrieved 16 May 2021.
  10. ^ Norwood, Graham (17 January 2017). "Purplebricks recruits TV property star for 'Commisery' campaign". Estate Agent Today. UK. Retrieved 25 May 2021.
  11. ^ a b Renshaw, Rosalind (6 July 2018). "Purplebricks commisery campaign could prove a winner for advertising agency". Property Industry Eye. Retrieved 25 May 2021.
  12. ^ Oakes, Omar (10 October 2018). "BBH and Audi win IPA Effectiveness Grand Prix". Campaign. Retrieved 25 May 2021.
  13. ^ "2018 IPA Effectiveness Awards: Insights from the winning campaigns". UK: Institute of Practitioners in Advertising. Retrieved 25 May 2021 – via Scribd.
  14. ^ a b Lewis, Nigel (15 April 2019). "Purplebricks now a 'superbrand' alongside Rightmove and best-known agents". The Negotiator. UK. Retrieved 25 May 2021.
  15. ^ "Superbrands Annual 2019" (PDF). The Centre for Brand Analysis. UK. 13 April 2019. Retrieved 25 May 2021.
  16. ^ Stewart, Rebecca (12 February 2020). "Purplebricks CEO on using less 'commisery' and more data to boost its brand creds". The Drum. Retrieved 25 May 2021. Purplebricks joined Netflix, Apple and Amazon on the Superbrand index last year, a sure sign it's gaining relevance as a household name.
  17. ^ Renshaw, Rosalind (15 December 2020). "Purplebricks smashes profit forecasts after surge of new customers". Proactive Investors. UK. Retrieved 25 May 2021.
  18. ^ a b c Lewis, Nigel (14 May 2021). "Purplebricks lands major Corrie product placement coup". The Negotiator. UK: Propertydrum Ltd. Retrieved 25 May 2021.
  19. ^ a b c Da Silva, Marc (14 May 2021). "Purplebricks instructed to sell Coronation Street's iconic Rovers Return". Property Industry Eye. UK. Retrieved 25 May 2021.
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