Estate agents set to overpay £220m in 2021 on collective cost per acquisition
- Agents set for ‘Armageddon Bill’ for property valuation leads this year
- Cost per acquisition: Less than 2 percent of market paying < £100
- Estate agency industry to waste £1bn by the end of 2025
The estate agency industry will waste approximately £220m in 2021 by overpaying for sales leads, according to research from Call360, a call tracking platform.
Typically, estate agents look to pay up to £250 for every successful instruction to sell a property via a variety of lead sources – from Google Ads to property aggregators. Call360 says less than 2 percent of the market is currently using tech (frequently used in retail and recruitment) to lower the cost per acquisition – technology that lowers the price of a valuation to £90.
Savills has predicted 1.4m transactions this year, up from the post credit-crunch annual norm of 1.2m. With more than 98 percent of estate agents overpaying to the tune of £160 for every successful instruction they secure, the industry is set to waste £220 million pounds in 2021. Without change, this will see the industry spending £1bn on wasted property valuation leads by the end of 2025.
Mark Taylor, CEO of call tracking platform Call360 said: “The estate agency profession relies heavily on aggregators to generate valuation leads. But analysing inbound calls at branch and call-centre level massively lowers the cost per instruction for an agency. Advancements in AI and automated analytics can help companies close the loop between online clicks and high value sales conversations taking place over the phone. The property industry has huge potential to use AI to get control of their marketing spend. Just knowing which are the good sources of valuation leads versus the poorly performing sources could save 20% of the marketing spend – let alone the time savings made from not chasing poor quality leads. Without this data and insight, agents will continue to have to rely on portals and some very unsophisticated spend on web search.”
Call360 says the industry is overly reliant on aggregators – but cannot rely on their outmoded technology to focus their online marketing spend. Data from Google shows 71 per cent of online searchers still call estate agents with their initial enquiry. This break in the sales chain means agents don’t always know exactly how their online campaigns are driving results.
Mark Taylor: “Estate agents can’t always establish the value of their online spend against results to keyword level, so they’re unable to optimise their online campaigns. As a result, agents struggle to know which lead sources are their best and worst. AI can generate a much higher level of data insight by closing the loop from online clicks to offline sales. Agents with enhanced conversion data – and there are very few – are optimising their media spend to grow instructions. Next generation call-tracking analytics platforms scan calls, using AI to establish the intent and outcome of every call; was that Google click that you’ve just paid for someone calling to book a valuation or wasted on a previous customer chasing paperwork? Removing human error – which naturally occurs when asking people to fill in the outcome of a call – means you can optimise campaigns based on the intent and outcome of the call. AI has the power to categorise 10,000 customer calls in a fifth of a second based on their intent and outcome, providing agents with a real-time, complete view of the customer journey, actionable customer experience analytics, and an average of 20 per cent more value from their Google spend. This is not rocket science and plenty of national retail chains do this already. Now it’s time for agents to catch-up.”
The research also showed that only 76 percent of phone calls from people wanting a valuation actually got a valuation – as branch staff failed to pick up calls routed to them.
Mark Taylor: “On the one hand, estate agents are set for this ‘Armageddon Bill’ for leads because the number of transactions is going to be so high this year. That’s not such a bad problem to have. On the other hand, failing to pick up twenty four percent of calls from people who want to give you their business could be the difference between your branch network growing or… underperforming.”
Call360 is backed by Maven Capital Partners, who provided the funding for the Company’s Series A investment round, which recently completed, raising £1.65m.