Proptech - where to start, where to end?
Some of you may remember the cassette tape. An industry was built around it very quickly, people spent millions on infrastructure, then CDs arrived and it all changed. Industries evolve at speed and we have a need for residential estate/lettings agency proptech to do that quite soon for everyone's benefit.
First, let me set my stall out before I get to the point of this piece. I am all in favour of the benefits that technology can offer the estate and lettings agency industry, in fact as MD of my agency business I was one of the cheerleaders of its inception, having adopted a cloud based CRM as far back as 2005 years before the word proptech was first mentioned. I remember we were one of the first agencies to start using Docusign, when no one had even heard of it, when other agents looked at us as if we were mad, clutching reams of paper they had to file away in vast basement store rooms, never to be found again, much to the irritation of their customers, and that's the point. I saw the benefits, it allowed us to be efficient, to be compliant, to make savings whilst at the same time to be innovative, to give us a commercial edge over our competitors, to impress our customers with the ease and convenience of being able to transact and store data. That is not so easy to spot anymore.
So, I saw the need for our industry to modernise, to embrace proptech a long time before it became mainstream. I am a believer, just to dissuade any doubters. If there are agencies out there who haven’t looked at what platforms could help improve their business, then they are being left behind. Why? It creates efficiencies, it saves money in the main (well it used to), it saves time, it looks good, customers like it, and you can do things and communicate in ways that conventional methods don’t allow in huge volumes, at speed and often without you needing to lift a finger, allowing you to focus on other things. The position of having done nothing is an extreme one, but we have gone from one extreme to another, and missed the opportunity in between to take full advantage of what this new industry has to offer.
Like everyone in our industry we all subscribe to a dozen or so websites that give us our daily and weekly dose of updates, news, and topical commentary. These sites main source of income is advertising and so every day you can guarantee you will get a secondary email from each one with an industry supplier offering a new message, service or product, which are welcome for a variety of reasons. About 7 or 8 years or so ago, maybe a bit longer, I remember I started getting the odd one from what we now call a proptech supplier. Maybe once a month, or even a bit longer to start with, a new company would launch offering X, Y or Z proptech service that would revolutionise estate or lettings agency fortunes, and some did. The uptake was slow to start with and then as the odd year passed by more and more firms started investigating and more and more agencies acknowledged the need, advantages and inevitability to modernise. The pendulum started to swing and before you could say boo to a goose, we were in a very different place.
Back in those pioneering days these new firms, akin to their now industry name was called something prop or tech, house or rent, you could put your mortgage on it before the next email arrived. Pace quickened and like with the proliferation of agency branches in the past companies were being created hand over fist as people realised there was some money to be made, and the strategy on names went out the window. All prop, tech and house synonyms had been exhausted, so as with Zoopla, names were just made up to give it some individuality, something that people would hopefully remember. The point being, there were so many, they had no choice. Today, I get 10 adverts a day from proptech suppliers, but I have signed up to no more newsletters.
For agents it must be a confusing nightmare, as everyone claims to be the best at what they do, and some have created services that agents actually don’t really need. I have seen ones in lettings in particular that offer to provide a service that is quite straightforward to process as it is, but they would have you believe it is incredibly complicated and you should use their great product for £50 a month per branch, kerching, kerching! I remember seeing one board room pitch a few years ago where the software being presented for £480 per year per branch, would tell me each day what viewings needed feeding back from the day before, and when someone enquired on Rightmove a special message would show up on the incoming call to flag it to us as a hot incoming call. I scratched my head, perplexed. My reply naturally, was that each and every incoming call to us was valuable and got the red carpet treatment, and my CRM and managers made sure all viewings were fedback, we had a process for that, and I didn’t need to spend £3000 a year for some software to duplicate what already existed.
Don’t get me wrong, there are many amazing products, some amazing bits of technology that really work, created by brilliant people who know what they are talking about. Trouble is there is this wall of white noise with everyone claiming that.
Furthermore, there are still some things that need to be handled by people and give the customer a personal service. It is still a people business, based on trust, advice and relationships, but some proptech principals insist they are replacements for human interactions. Nurture programs for example have their place to reinforce your brand, but real nurturing is still done on the phone or face to face. I managed it running a million-pound sales branch nearly 20 years ago, when there were 1.8 million transactions a year. No internet, no PCs in fact, mobile phones had just arrived. Nearly 400 exchanges a year, and just shoe leather and talking to people got us there. Today agencies have far more time on their hands, so these systems are never to replace what we know already works, but to compliment those activities and add value to those interactions which they do very well.
There are over 800 Proptech firms in the UK now. How many private Facebook groups are there, designed to get you believing their system is the holy grail? Maybe it is, but the biggest problem is the industry has grown so fast that agents don’t know which way to turn and it has started getting expensive as they think that they should sign up to that one and sign up to that one. I saw one agent say this week, he uses 21 different prop tech platforms. That is an eye opener alone, but the interesting points were to come. Firstly, none the 21 talked to each other, they communicated with his CRM only. Secondly, whilst all of them assisted him with his business to one degree or another otherwise he wouldn’t use them, none of them actually did exactly what he would like them to do, he was adapting his business to fit the proptech, not the other way round. Many of these platforms have been created by tech people or entrepreneurs who have spotted an opportunity who haven’t asked agents what they need or want.
So, what needs to change? Well firstly, the industry needs to consolidate, like estate agents, and online agents found when transaction numbers couldn't sustain their business models, branches closed, businesses failed. Some proptech businesses won’t survive, there will be acquisitions, mergers where some synergy exists, others will refine or change their product to find a niche as there is still far too much duplication. Agencies can’t afford to sustain using 21 different bits of kit.
With that lack of duplication hopefully, we will find suppliers asking what agents actually want, and then agree to cooperate so their software packages complement each other and work together. It is actually creating more work for agents, putting data into one package, before then importing it to a second one to do the next step etc. In tandem agents need to better understand what they need, what works for their business and customer proposition, their brand, instead of just signing up to everything because it's the thing to do these days, not understanding whether it will or won't help their business or improve the customer experience.
I know agents that have become proptech junkies, show them a website and tell them it will help them do A & B, transform their marketing or instructions or compliance and they take it, which has only fanned the flames further, no to mention burning profit they don't need to. At the moment, there is a lot of uncertainty around what to use, how much to use, when to use it, will it last, does it work, will it work with other systems. They should not forget that they are central to the service they offer their customers, not the software. They are the problem solvers, the expertise that was being sought in the first place.
If anyone reading this would like to discuss what might or might not work with their business then please get in touch.