I think that we are all now familiar with the causes of the recent slowdown in the property industry and whilst we can continue to debate European politics, the latest budget or the recklessness of Mark Carney, the more prudent amongst us are now turning their attentions back towards their own businesses and how they are going to survive the latest ‘dip’.
Unfortunately I am now old enough to have endured two significant ‘dips’ in the property market during my career to date. I remember the first being complete and utter panic with endless sleepless nights after I had convinced myself that the property market was over for good and that I would have to go and retrain in another industry if I was ever going to build a career, pay the mortgage or put food on the table. However, the second was a far more sedate affair having learnt from the first that there is little point in panicking and more importantly that there are opportunities in every type of market, if you look for them.
These are my top 5 tips for surviving a slowdown:
#1 Hold Your Nerve On Fees
This is easier said than done, especially as you start to notice a fall in instructions. There will be natural tendency to hang on to your volumes at all cost but this can become a false economy and it is easy to convince yourself that you doing well without actually making any money (mentioning no names here).
During a market slowdown there will be less transactions, you can’t change this, but if you also decide to drop your fees at the same time you are only going to compound the problem and you will find yourselves chasing even more deals just to tread water. In my experience the best estate agents, mortgage brokers and solicitors all gain market share during a slowdown. This is because during tougher times clients tend to value expertise and experience far more.
The primary need of your clients is still to sell / buy a property, it is not to get the get the best price for your service. It is only in the absence of any meaningful differentiators that price then comes into play and so concentrate on enhancing your service instead of lowering your fees.
#2 Don’t Stop Marketing
It is often the first and the easiest budget to be slashed but remember that the slowdown will impact upon the whole of the market and not just your business. In all likelihood your competition will probably be having the exact same thoughts and therefore a slowdown is a great opportunity to get noticed and steal market share.
By definition, a slowdown in the market will mean that you have less available cash and so I’m certainly not suggesting that you increase your marketing spend; reduce it by all means, re-negotiate better deals and get creative but don’t stop.
Also, think about your strategy – do you need to change your target market / approach? Is there an area previously dominated by your competition that is now potentially up for grabs?
#3 Re-connect With Clients
Everyone remembers their first client and how much we all valued their custom and hung off their every word. However, if we are honest, as most businesses start to grow the level of care and attention that you gave to that first client has probably become diluted due to all of the other responsibilities that now demand your time and attention. Moreover, as volumes / profits continue to build, some businesses have found themselves investing in over-engineered and expensive automated systems to allow them, in theory at least, to stay ‘connected’ with their clients whilst inadvertently further diluting these relationships.
I have lost count of the number of websites, Apps and dashboards that I have been offered over the years to supposedly improve communication within the conveyancing process. None of them work. They don’t work because they all serve to take away human interaction between you and your clients. This is a service industry, it will always be a highly emotive and personal experience and so neglect human interaction at your peril.
Think about how you are communicating with your clients and in particular the communications that you have standardized and automated over the years. Undigitize; use the extra time that you will have during the slowdown to improve and personalize your client communication once again.
You may well be able to send a vendor their Rightmove statistics at the press of a button and they may even have their own personal login to your website so that they can view them themselves but how much more effective would it be for you to arrange to catch up after the school run over a coffee and run through them face to face? What will clients remember most – your personal help and guidance through this period of their lives or your automated email every Thursday?
Within the property industry we have an unrivalled opportunity to connect with clients for months at a time during what for many is the most stressful time of their lives. It is the human connection that people will remember most and, if you get it right, this is what will lead to the creation of goodwill, heartfelt recommendations to other clients, and ultimately a much more robust and less price sensitive business model.
#4 Make Use Of Your Extra Time
Make the most of the extra time you will be temporarily afforded by this slowdown to reassess your business. Now is the time to sort out all of those things that you knew weren’t quite right and could be better but that you just never had the time to address.
Be brutally honest. Is your service as good as it could be? If not why not?
Look at your suppliers and relationships. All too often businesses stay with the same suppliers because it’s easier to do that than it is to change, even though you know they are no longer the right fit for your business.
Resist the temptation during this period to change suppliers simply based upon price or because you’ll get a higher referral fee elsewhere. These gains will be short-lived if your overall service suffers as a consequence and so make sure you change for the right reasons.
Also consider training during this period. Is there a gap in your skillset or that of your staff that could benefit the business if filled? It makes sense to undertake training projects and system changes during these quieter times. It will also help to keep staff morale high, which is another important factor if you are looking to retain key members of staff during this period.
#5 Don’t Panic!
Market slowdowns are cyclical and inevitable, get used to it.
The property market will not remain slow forever and just because we are in a period of economic uncertainty doesn’t mean that people stop getting married, divorced, having babies and all those other things that cause people to move home. Demand always returns to the market in one way or another and slowdowns are rarely as bad as they are predicted in the media. Use this time productively and stay focused on the positive opportunities.
Carl Brignell – Founder and Managing Director of Elite Conveyancing
T: 0203 8580241