Online estate agent Purplebricks is touting the brand’s “significant value” as it seeks a buyer for its business, after forecasting a loss of £15m to £20m this year.
The company’s board says the brand has secure a competitive advantage after more than a decade spent building its recognition within the UK estate agency market. However, it believes the business’s potential may be “better realised” under an alternative ownership structure.
Indeed, from a brand health perspective, Purplebricks is leagues ahead of some of its biggest traditional estate agent rivals. According to YouGov’s BrandIndex tool, Purplebricks’ index score – a measure of overall brand health – averaged at 6.4 for the past half year, higher than Savills’ score of 6.1, Knight Frank’s 3.9, Bairstow Eve’s 0.9 and Foxton’s -1.1.
The brand also claims a superior awareness score (86.6), customer impression score (9.9) and consideration score (22.3). Savills is its closest rival on all three measures, with scores of 54.8, 8.9 and 8.6, respectively.
The news comes after the business hailed the effectiveness of its revamped marketing strategy at the end of last year, following new CEO Helena Marston blaming the company’s poor financial results in August on marketing “missteps”.Purplebricks hails effectiveness of marketing strategy U-turn
Marston described the ‘Let’s get you sold’ campaign, which saw Purplebricks shift focus from its low fixed fee, as having “missed the opportunity” to communicate the company’s key differentiator in the market.
She said the brand had “reset” its approach to marketing and “gone back to shouting about [its] low fixed fee” with the return of its ‘Commisery’ campaign.
The shift in strategy has seemingly paid off. Purplebricks’ current index, awareness, customer impression and consideration scores all represent statistically significant uplifts compared to a year prior, according to YouGov.
Over the six months to 31 October, the company cut marketing spend by 28% to £10.4m. Purplebricks claimed its “more effective and targeted marketing” had resulted in a cost per instruction (marketing costs divided by the number of instructions in the year) of £490, 29% down from £686 during the same period last year.
The business originally expected to lose £10m this year, but has now lowered its guidance after finding its strategy to focus on the country’s most profitable regions was more expensive than planned. Revenue expectations have been cut by £7.5m to between £60m and £65m.
CEO Marston says: “We have undertaken a huge amount of work in the last 9 months to improve our sales business, raise standards, establish Purplebricks Financial Services, and stabilise lettings, all of which means the company has never been in better shape for the future.
“We recognise that our upside potential is not currently reflected in our market valuation, which is why the entire board has therefore concluded that a strategic review is now in the best interests of all shareholders.”