Online estate agent Purplebricks considers new pricing strategy
New chief executive Vic Darvey admitted the company had been too distracted by overseas expansion in the past.
Purplebricks is mulling over changes to its pricing as the online estate agent switches gear following the “mistakes” of the past.
New chief executive Vic Darvey, who took up the post in May, told the PA news agency the current flat fee model, which costs £1,399 in London or £899 elsewhere, could be replaced.
He said the uncertainty hanging over the property market as Brexit looms could make the change necessary if the rate of house sales slows.
“We’re going to start to look at how we evolve our pricing over time because our pricing has been pretty much the same for five years, he said.
“With any successful business, you need to adapt and evolve your pricing strategy.”
Mr Darvey added: “In certain markets, in certain pockets of the country where houses aren’t moving quickly, there is a moment of hesitation from customers saying: ‘I know I can save £10,000 but actually do I want to commit to an £899 upfront fee when my house may not sell?'”
It comes after the company said it would quit both the US and Australia earlier this year amid continued underperformance in the markets.
I think we've been really clear in admitting that we've made some mistakes and we need to learn from those Vic Darvey
Mr Darvey admitted rapid expansion abroad had been a “distraction” for the board.
“We were incredibly distracted by overseas expansion,” he said.
“We’ve admitted we made some mistakes. I think we’ve been really clear in admitting that we’ve made some mistakes and we need to learn from those.”
The company is now focused primarily on the UK, as well as maintaining its Canadian business.
The firm’s advertising output has also been shaken up under Mr Darvey’s leadership in a move he said shifted the focus from price to customer service.
“It’s really important now that we become a brand that is famous for exceptional service, as well as category leading fees,” he told PA.
Mr Darvey added another part of his mission as chief executive will be to increase the company’s market share by taking more business away from high street estate agents.
Purplebricks currently occupies less than 5% of the market but aims to reach 10% in the next three to five years.
As a result of growth in the online sector, Mr Darvey predicted the number of estate agent branches will continue to decline.
“You’re going to see High Street agents continue to close more stores, and you’re going to see them move more to a hub model, where geographically they’ll start concentrating themselves, because it’s going to be possible to continue to support the overheads that are required if people are moving online,” he said.