Have you ever come across the phrase “market differentiation”? The term has been in use for a great many years now, and is a firm favourite at marketing conferences and product launches all over the world. However, in my experience, it is a phrase that for some strange reason is conspicuously absent from the conversations of the estate agents that I meet during the course of my working week.
Now there may well be many reasons for this, but in my opinion, whilst many business owners fully appreciate the need for their company’s branding and market image to be “of the moment”, I have a suspicion that they deliberate a lot less about what differentiates their business (and what it offers) from their local competitors. So, in the case of selling property (where the modus operandi is typically the same) it becomes quite clearly a case of NOT what you do, but the manner in which you do it.
Furthermore, I would also speculate that most estate agents would maintain that they see their business (and their professional role within it) as “offering a service” to the public rather than necessarily offering a “product” as such – and I suppose I agree that technically they would be right. But I wonder whether today’s savvy online consumer would wholeheartedly concur with this view? Or at the very least would they not see the boundary between product and service as being a lot less well defined?
It might, to many, sound like semantics, but I believe that recognition (by estate agents) of this subtle shift in perception on the part of the consumer might well hold the key to the continued success of many high street estate agents across the country.
So, how is it possible to counter the public’s perception of your estate agency business? Well, it is my view that at least part of the answer lies back in the first line of this article, and the term “market differentiation”. More precisely perhaps – the undeniable need to spell out to the public what differentiates one estate agency business from another. Easier said than done? Well no, not really.
Let me give you just one topical example to illustrate my point. On my professional travels, I often hear how tough it is for high street estate agents to compete against the low fees that are offered by internet agencies, and yet both service offerings are completely different. Internet estate agency is quite clearly (by definition) a more “remote” experience, as opposed to the high street (which at its best) should be a more personal and hands on service offering. Both services have legitimacy in a diverse and competitive market place, but they are simply NOT the same, and consequently should not be sold or priced as such.
Sure, I realise that there will always be clients who will opt for the cheaper internet option to sell their property – simply because it is cheap. But there are also a great many clients whose house buying/selling situation (and I am particularly thinking of those that have potential purchase that is involved in a chain) demands substantially more time and sales progression than an internet agent can possibly offer for £495! In my experience, this valuable facet of what a high street estate agent can offer is seldom mentioned or sold to a client at the point of the initial valuation. Which quite understandably leads them to not distinguish between (or indeed value) the alternative propositions being put before them.
Given the situation that I have outlined above, is it any surprise that clients opt for the cheaper service?
There are of course many other examples that I can give, but in broader terms at least, the need for companies to understand the importance of clearly communicating the services they offer, will not only make them stand out in a crowded marketplace – but assist the public to make more informed choices about the estate agent that they select to act for them. As the old saying goes; “You pays your money and you makes your choice”, and in our fast changing world right now – this is one facet of all business that, to the best of my knowledge, has never been any different.
The author of this article is Peter Nicholls, CEO of Ideology Consulting. For more information, go to www.ideologyconsulting.co.uk