‘Hybrid estate’ agent Purple Bricks has increased UK instructions by 83% in the last 12 months and apparently are on-track to be market leader within 2 years.
Key to this growth is a disruptive proposition that has been communicated with provocative, comparative advertising. Purple Bricks offers a low, fixed fee for marketing a property – a distinct alternative to commission that is a % of property price.
Not surprisingly they are not popular with conventional estate agents who point to a misleading comparison. Comparing commission (paid only if a sale is achieved) and a fixed fee (paid in advance) is like comparing apples and pears. It has led to an ASA complaint.
Those complaining don’t get my sympathy. The reality is that a comparison when someone is planning to sell their home is stacked in favour of conventional agents.
Our tendency to be risk adverse (preferring offers where benefits are certain) will instinctively favour commission which is only paid for a successful sale.
Choosing commission is easier. Like a credit card purchase the payment it is detached from the purchase decision. It is also the norm – advice from friends and family is likely to be based on their experience of this approach.
In response Purple Bricks must demonstrate their value and challenge the biases that favour commission.
This is something their advertising does very well. Significantly it moves the ‘real life’ moment of comparison to one that happens after a house sale.
The post sale comparison plays to our tendency to be loss averse – i.e. losing money hurts much more than finding the same amount. We will try harder to avoid losses – or in this case to avoid ‘com-misery‘.
The norm of paying commission is also challenged. Our need for social acceptance means a situation in which a friend points out a poor choice will be very painful.
Purple Brick’s cleverly constructed advertising goes some way to balancing the biases that favour competitors. Success, however, depends on the company demonstrating it can deliver a house sale for the vast majority – i.e. that com-misery is a likely risk.
Ultimately those selling will be the big winners from Purple Brick’s comparative communication. Sellers now have a new anchor point for judging the value of an estate agent that is linked to what they do.
That sounds fair enough to me.