Value for money: do you get it?
by Anh Nguyen
Agents have been quick to sign up to a number, if not all, of the major property portals, but do they offer a return on their investment?
Marketing is one of the first casualties of a market downturn, which is sheer madness when this is the time when it is most needed to help boost business. And this is particularly the case with property portals, which have become the most powerful distribution tool for agents’ stock.
In recent years, when the housing market peaked, most agents didn’t give a second thought to which property portal they signed up with – they simply uploaded their properties onto any, and sometimes all, of them, believing that the more they spread their brand, the stronger it would become, which would in turn drive higher business volumes.
Unfortunately agents can no longer afford such an unstructured approach to their marketing strategies, which means that they need to assess the portals they subscribe to, to ensure that they maximise their Return On Investment.
Currently, most agents tend to operate along the lines of the old maxim attributed to, amongst others, US merchant John Wanamaker: “I know that half of my advertising budget is wasted – but I’m not sure which half.” Now is the time for agents to assess which half that is when it comes to portal expenditure.
Measuring Return On Investment
Like most things, measuring the ROI of portal expenditure is easier said than done, but it can and must be done.
But what does it mean? Does ROI refer to the number of leads a portal generates for an agent, the number of times a portal user clicks through to their site, or does it refer to brand awareness or all of the above?
Agents need to decide on their rationale for subscribing to a portal before doing so. What do they want to achieve through their membership?
David Bexon, managing director of SmartNewHomes, says: “At its most simplest, [ROI refers to] leads and web traffic. That’s the starting point. Agents need to ask themselves of their £60 subscription – which most of us spend on a good lunch, never mind on a night out – how many leads and how much web traffic have they got from that.
“Beyond that it is really about putting in processes within their own businesses to ensure that those leads are responded to.”
Agents should first identify which portals generate the highest number of their leads. They need to devise a strategy for tracking their performance on each portal, if they haven’t done already. No-one wants to be in the situation that one managing director of a leading London agency found himself in recently, when he was enlightened about the number of leads one well-known portal was generating for him - by its chief executive and much to his surprise.
Once agents have identified which portals generate the highest level of leads for them, they need to calculate the cost of each lead. At its crudest level, this involves dividing the cost of a portal’s monthly subscription by the number of leads it generates for them each month.
It took PropertyFinder more than a week to produce a detailed breakdown of its average cost per lead, which is slightly odd considering how rife competition in the property portal currently is.
Its results showed that in June, when the average subscription to PropertyFinder cost £179, the average cost per response was £3.24.
This is based on a total of 5,229 subscribers to the site, who received a total of 289,229 responses between them, averaging at 55 responses for each subscription.
Of the total number of responses, 106,452 were email leads, 41,173 phone calls and 141,604 clickthroughs to agents’ websites.
This tedious process is only required for established portals. Agents can more easily track their ROI on PropertyIndex, a new portal due to launch on September 17, because it charges £1 per lead rather than a monthly subscription.
That said, for all portals agents need to devise a way to track which leads convert into sales, which few currently do.
Lee Bramzell, chief executive officer of PropertyIndex, explains: “Let’s say you’re paying a portal a £200 monthly subscription fee and it generates you 100 leads. You know that those leads cost you £2 each. However, if the conversion rate on those leads is 1%, it is actually costing you £200 per sale, which makes a huge difference in terms of ROI.”
Until the proliferation of portals with similar pricing structures, agents need to seriously consider tracking their leads.
As Daniel Lee, chief executive of Globrix, says: “Lots of estate agents are naïve in their ability to track where leads come from. It is a terrible shame because they are spending money on portals, newspaper adverts, shops and flyers in their local area.
“If they’re not then asking people who call why they’re calling them, it means nobody really understands where their marketing budget is working.”
To support Lee’s point, he cites research undertaken by Globrix, which involved staff from the portal phoning estate agents and expressing interest in their properties. Not one of 50 agents phoned in one day asked the researchers where they had seen the property about which they were enquiring. “We were surprised because these were big agencies, like Hamptons and Savills, through to the small, independent
ones,” says Lee.
Globrix allows agents to list properties for free, driving traffic to their websites, rather than referring leads to them. Lee’s advice for agents wanting to calculate their ROI for Globrix leads is to compare the
number of clicks they get through from the portal compared with what they might get through via a search engine like Google.
He explains: “The average price per click around the country is around 20p, so if we’re sending somebody 1,000 clicks a month we’re effectively giving them £200 worth of traffic a month.”
Agents should bear in mind the fact that geographical location and/or the price range of property can affect value for money with some portals. For example, agents selling high-end properties are more likely to get more value for money from Primelocation.
Quality versus quantity
Many agents believe that they will maximise their online success by joining as many portals as possible. But if these agents compared the way their properties are marketed on each portal they would quickly realize that it is difficult to differentiate the service of many of the well-used sites, at least where their standard services are concerned.
Listings on Rightmove, Findaproperty and PropertyFinder are a case in point. With this is mind, agents have to ask themselves if they are allowing their brand to be diluted through naivety or because they lack a unique selling point – equally worrying points for consideration. How is a prospective buyer supposed to know that you’re a reputable agent, offering a value-added service and not a halfhearted, unprofessional agent trying their luck at the agency market to earn a living - not that today’s market lends itself to this scenario, but you get the point - if your brand is lost in a sea of rivals?
All this said, tools such as Rightmove’s value-added Choice service, allows agents to highlight their stock. Others such as PropertyFinder enable agencies to buy display advertising slots. Of course, there has been much criticism about the expansion of services being coupled with increased subscription fees, but agents need to bear in mind that
these fees are far cheaper than print advertising costs, that is, as said, if they are proving value for money.
Thankfully, not all agents are neglecting their portal ROI. North West London-based agency Greene & Co uses Findaproperty, PropertyFinder, Prime Location, Rightmove, Globrix and Zoomf and claims to scrupulously monitor each.
“We’ve cut our [marketing] budget by about 40% by getting rid of print advertising altogether,” says Jacqui Daley, marketing manager at the firm.
“To make the phone ring or to get an email, it costs us between 20p and £4 for a lead on the internet, whereas in print advertising it was costing us between £40 and £80.”
Contrasting the likes of Rightmove et al is Email4Property on which agents can create hosted pages detailing their services and brand, rather than their stock, for a minimum of £59. The site also redirects users to agents’ own websites, which is another area of online activity that agents should think about optimising.
If agents consider the analogy that property portals are the high street and their own website is a shop on the street, the logical next step is to draw customers in to view their fare.
Unfortunately, the agents who rely heavily on portals for business are probably the same agencies who ignore the quality and performance of their own website, which makes absolutely no sense at all. Why throw money at portals at the expense of your own site? Both should receive equal time and money to maximize consumer interest.
Norfolk-based Howards Estate Agents is one agency that claims to understand its website performance. As well as listing properties on its local media partner’s property website, homes24.co.uk, Globrix and Rightmove, every month Howards tracks the sources of its site users and the popularity of its site pages.
“If you spend time working on the exit pages [the least popular, which lead to users exiting the site], and improve about the bottom third of those, it can have a beneficial effect [in terms of] optimising your website to perform well on the likes of Google,” says Martin Cunningham, residential chief executive of Howards.
Cunningham believes this maximizes Howards’ chances of appearing at the top of a Google search for ‘property in Norfolk’, which is more cost effective than registering with multiple sites and diluting its brand quality.
He also believes that agents are far better off investing in their own websites before thinking about portals:
“I would say it’s an absolute no-brainer. It is one thing doing a nice website, but the key is actually optimising it so that it’s actually a powerful marketing tool.”
In any market, but particularly a market downturn, agents should be ensuring that they make every one of their pounds of income work hard for them, given the work that goes into earning them. Why throw good money after bad for a service you need? Then again, agents should be asking themselves the extent to which it is a true need and one that really will maximise their sales potential.