The British agency disruptor Purplebricks has today announced that it will move to a money-back guarantee model in a bid to transform the company into what CEO Vic Darvey called "Purplebricks 2.0". Using a trading statement to announce the pricing change, Darvey Commented:
"The Group has responded to a changing market and we are delighted to offer customers an option of reimbursement of their upfront fee payment if they do not sell their home. This illustrates our commitment to giving customers the best service at the best price and we are very excited about the growth opportunity this new initiative will drive over the next few years."
“With a simplified proposition and our new pricing structure in place, I am confident that Purplebricks is well placed to gain market share and to accelerate revenue growth and drive progress towards our medium-term targets."
Purplebricks customers will continue to pay the standard £999 +VAT fee but will now be entitled to a refund if their house does not receive an offer within 10% of the agreed valuation. The company also commented that its research has uncovered significant consumer appetite to augment listing packages with 3d tours, premium listings, energy certificates and the like which would generate an ancillary revenue stream.
Apart from the significant change to the company's underlying business model, Purplebricks' trading statement saw the firm deliver a healthy annual performance, highlights of which include:
Founded in 2012 by Kenny and Michael Bruce, who have since moved on to start UK challenger portal Boomin, Purplebricks shook up the world of UK estate agency with its flat-fee model and ruffled more than a few feathers with its 'commisery' marketing line which made traditional agents out to be making an easy buck off the back of vendors' properties.
With the company's model seeing success in its native UK market and shares trading for nearly 5 times the 100GBX float price, management decided to expand internationally and launch in Australia and The USA over the course of 2016-2017. Despite the $117 million backing of European media giant Axel Springer in 2018, Purplebricks was forced to pull out of both countries by mid-2019 citing slowing markets and claiming that the American business had grown "too quickly". The firm still maintains a presence in Canada where it bought out fellow disruptor DPCF in 2018 and, together with Axel Springer, is a major shareholder in German low-cost agency Homeday.