So, Purplebricks launched its U.S. campaign (check out the commercials) with a slightly diluted message focused on two key themes: saving money and a simpler, faster process.
Time will tell if the message resonates with consumers in the same, effective way it has worked successfully in the U.K. market.
Like in the U.K., the key to the model is spending big money to raise consumer awareness and generate leads.
This spend is not simply online, but typically overweight with above-the-line campaigns on TV and radio.
As you can see from the recruiting message, Purplebricks is planning to spend nearly $2 million per month on advertising — quite a large number for one market!
It’s only been one month. Every new business starts small, and each new real estate agency starts with one transaction. The numbers are small, but it’s important to set them as the foundation for future growth.
At the core of Purplebricks’ business is the local property agents, called Local Real Estate Experts in the U.S.
After one month in the market, Purplebricks currently has 24 licensed agents operating in the launch market in Los Angeles, California. This compares to over 650 local property experts in the U.K., and over 100 in Australia.
After one month of operation, Purplebricks U.S. currently has 12 listings, nine of which are for sale, and three of which are pending. Of its 24 agents, nine agents have one active listing each; 16 agents currently have no listings.
Yes, in isolation 12 is a small number, but remember that this is a new business. Getting a new listing every 2.5 days isn’t bad for a new entrant in its first month. But let’s see how it grows from here.
What’s next for Purplebricks in its expansion across the U.S.? A Californian expansion, namely San Diego, Fresno and Sacramento.
What to watch?
Going forward, these are the key strategic areas to watch:
- The numbers: Listing volumes and number of agents. This is the ultimate metric to gauge whether the huge investment ($60 million) in U.S. expansion is paying off.
- Customer proposition: Keep a close eye on the marketing message to consumers to see if it’s resonating or needs to adapt to the U.S. consumer.
It’s still very, very early days for Purplebricks in the U.S. market. But take it seriously: Purplebricks is a large, serious, international player with plenty of momentum and experience –and deep pockets. It may not revolutionize the real estate market overnight, but it will have an impact.
Mike DelPrete is a strategic adviser and global expert in real estate tech. Connect with him on LinkedIn.
Email Mike DelPrete