I'm in Christopher Watkin's studio in Grantham, part way through a run of short videos for the Letting Agent Podcast, and the tenant fee ban comes up.
"Neil Martin, should letting agents put their fees up following the tenant fee ban? Talk to me."
"Oh, Chris, how did I know you'd ask me a question about this at some point," I say. I've got strong views on this one.
"Can you put your fees up? Absolutely. But fees follow service. As in value first, fees later."
Fees follow service
What I told Chris was pretty simple. The cardinal sin is putting your fees up and trying to do less for the money. If you're going to charge more, you have to actually deliver value against what you do.
And going the other way doesn't work either. "If you get into a price war, only one person can ever win, and that's cheapest. There are no points for being second cheapest." Nobody buys you if they're buying on price.
Chris said you could systemise the whole thing and become Purplebricks. Even then, I said, you're compromising somewhere. You have to put constraints around what you mean by everything you do, just to hold that price point. I've written more about the cheaper option in Different beats better (or cheaper).
Tell people what you actually do
So how do you show you're worth more? My answer was the biggest thing I think every agent needs to do. "Educate your clients on what you actually do for the money."
Chris wasn't having it straight away. "Yeah, but how do you do that? Because let's be frank, there's plenty of estate agents, top ten tips to choose a letting agent. I'm already falling asleep."
Fair point. But there are parts of the process nobody talks about, or very few people do. Those are the bits you bring out.
When I asked letting agents to explain in detail what they did, they'd usually say the same thing. "But then the landlord will do it for themselves."
I get the worry. I just don't think it's true. "The fear is if I explain everything I do, people will want to do it themselves. The reality is when you explain everything you do, people will want to do it even less because they'll see how complicated and how difficult it is."
I gave Chris the dripping tap. If I watch a YouTube video on fixing one, "it's going to make me remember that I'm definitely not a plumber, and I'm going to call one." And if the video's from someone local, they're probably who I'll ring.
Two hundred things to worry about
The next video went out two days later, on landlord events. Chris came at the same fear from another angle. Tell landlords all about the legislation, he said, and you only attract the ones who self-manage. I disagreed.
Picture a landlord who turns up thinking there are three things to worry about and finds out there are closer to two hundred. "I'm not going to turn it into my full-time gig, which means I'm not going to learn those two hundred things, which means I'm going to trust you to do it for me." And if yours is the only agent telling them, who do they think knows more?
It has to be from their side, though. A lot of agents talked about what the ban meant for them. "Landlords don't care. Talk about what it means to a landlord".
Back in the first video, I'd done the maths for anyone who didn't fancy running one. Fifty one-hour meetings is a minimum of fifty hours. That's at least a working week. Or you put those same fifty people in a room for one evening, three hours, with your team there, and qualify future business from all of them.
Change the emotion in the room
The part of the second chat I'd underline is about how a room feels. I told Chris about a client's landlord seminar I'd gone along to. One of the speakers was useful but dry, and it left the room a little bit flat. They'd also made a comment that didn't do agents any favours, in a room full of landlords with an agent hosting.
The agent was the last speaker, so I whispered in their ear. "You have to change the emotion that's in this room right now." I suggested a slightly self-deprecating question back to the earlier speaker, asking if they were one of the agents he meant. The answer was no, and it lifted the mood.
Stack up too many dry topics, insurance then mortgages then more rules, and the evening goes flat. So I put it to Chris like this: "How do people feel when they come to your event?"
Watch both clips
First published July 2019 on Christopher Watkin's Letting Agent Podcast.
