Industry Interview: Justin Jordan from Loyalty Street.
Where did the idea for Loyalty Street come from?
The idea came about when I was selling my home. Like most people, I wanted was a good quality estate agent at a fair price. I didn’t have a lot of time on my hands as at the time was I selling a business. When I searched the internet it soon became apparent that there was no real way of qualifying which agents were performing better than others. I also found there was a big variation in the fees they charged. It occurred to me that when a property developer sells a block of flats, they have time to research the market for the best agents and because of their buying power they can negotiate a better deal on fees than I could hope to achieve selling just one property. So I thought, how about bringing that buying power to homeowners.
Is the way consumers are choosing Estate Agents changing?
I think, like most homeowners do, the best way of selling your home is to use a quality local estate agent. That isn’t going to change. 5 years ago everybody thought online estate agents would be the next big thing. I just don’t see that happening. Currently online agents only account for 2.7% of UK property transactions and less than 1% in Greater London. Estate agency is a service business in which most of the work happens after an offer is accepted. In countries such as France and USA where estate agent (realtor) fees average over 6% the online model grew quickly to 10% of the market but has stalled at that level. The fees are much lower in the UK so the incentive for using an online model isn’t as great.
What makes choosing Loyalty Street a better choice for consumers?
Loyalty Street acts like an insurance when you come to sell your home, but one you don’t have to pay for. Homeowners who sign up to our service get the security of a capped fee set at a competitive rate regardless of when they sell, and the confidence of knowing the agents on the panel have been selected based on a proven track record of getting great outcomes for homeowners. The cash reward can come in handy too! Of course, if you already know who the top performing agents are and you are a strong negotiator you may not need our help.
How successful has Loyalty Street been so far?
It’s early days but we have had a great start. We launched to the public in April this year and to date we have signed up £750 million of properties and are on track for £1 Billion by the end of the year. We are targeting £10 Billion next year. The really astonishing thing about our business is that 15% of homeowners we write to take up our offer and register with Loyalty Street. With direct mail 2% is deemed a success, so to achieve 15% shows us that homeowners are really buying into our proposition. We have secured the services of many of the top performing estate agents in the areas where we have established ourselves, which is currently South West London. We will be operational in 45 different areas by the end of March next year.
How important is Social Media when it comes to buying/selling/renting property?
To be honest, social media isn’t my thing. I can see Social Media becoming more and more important in the future within the property market as the current younger generation come of age and own/rent a greater amount of property. Currently the highest percentage of property owners are middle aged and over so Social Media will only hit a small proportion of the market at present. Also, there are a lot of costly mistakes that can be made on Social Media so I would always suggest outsourcing this at first to one of the specialist Social Media agencies until you are 100% competent and have the resource to use it 24/7.
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