9th February 2024
This week it has been reported that Purplebricks is selling itself to Strike for £1. It’s likely to lose at least £10M this year.
It’s a sobering reversal for a company that only a few years ago was flying high with its goal of disrupting the estate agency market. Its strategy is focussed on the idea that people hate paying commission to agents; that they’re happy to do much of the work themselves and can do just as good a job, and that a digital disruptor with a significantly lower price point can therefore clean up.
It is an appealing proposition: based on the assumption that the model, which sees the agent’s remuneration tied to the agreed sale regardless of how long the sale process takes, has evolved. The disruptors say we can achieve the same result at a fraction of the cost with no agent involvement.
A fire sale suggests that that belief has been found wanting.
Perhaps – and the £1 sale of Purplebricks might be evidence of this – just perhaps, customer satisfaction relies not just on the management of cost but also on the delivery of expertise and partnership. Partners say; we are happy to shoulder some of the risk as you embark on the dream of buying your own house. Partners share their expertise in the housing market to help prospective home owners to achieve their dream,
While people – and companies – are keen to keep their costs down, there is still a role for an expert. In many areas of life people are looking for a partner they trust.
It would appear that buying and selling a house is one such area.
At Vocative, we’re not estate agents – as I hope you know, given you’re on our website. We help companies hire the people who bring technical solutions to business problems.
So we’re not anti-technology: we’re involved in many businesses to help them make the most of it.
But in the complex process of identifying a business need, shaping it up into a role profile, articulating that to the market, finding the right person and telling them the story – they need a partner.
Of course parts of that process have been changed over the years. LinkedIn has changed the speed of the market.
And that’s because it’s about people. You can accelerate aspects of the process. But ultimately, if you want to hire an exceptional person, you’ll need to articulate the opportunity to them clearly and in a compelling way. If you want to do that, you’ll need to understand the dynamics within the organisation and the challenge and opportunities they bring.
To put it another way – it might not be hard to identify someone who’d like to buy your house. But that’s not the same as working out whether they can afford it, helping them with the finance, selling their existing house, sorting out the legals and managing the chain.
And similarly, you can probably spend a few minutes of LinkedIn and find someone who you think can fill the vacancy you have. But that is a long, long way from hiring them. The work of making contact, selling the opportunity, building a relationship, agreeing a deal, managing a process, negotiating a package, negotiating resignation and counter offer, preparing onboarding. The list goes on. It’s a complex and time consuming process. And it needs skills that are hard to develop.
It’s just possible that selling a house, like hiring a person, isn’t as easy as it looks.
That’s why the best work we do is with customers who’ve invested in our relationship over the long term. I posted on LinkedIn last week about a role I filled for a customer in 45 minutes, and commented “it took me five years”. We can only act to solve an urgent problem like that because of years of time invested on both sides to build genuine mutual understanding.
So – digital disruption will continue. The recruitment process is slicker, faster and more robust than it was 25 years ago, because digital transformation has improved the way we work.
Purplebricks have learned that the hard way.