Struggling U.K.-based hybrid real estate company PurpleBricks has announced it will increase its prices and end its money-back guarantee. The move is the first significant announcement from its new CEO, Helena Marston, who was appointed in April.
The money-back guarantee will end on July 25. It was available if a listed property did not receive an offer within 10 months of listing. The decision to remove it was taken as “a result of customer feedback,” according to Marston.
In a note to staff, the CEO wrote, “When this was introduced, its objective was to inspire confidence among customers that we would deliver for them, and if we did not, they had the opportunity to get their money back.
“However, feedback shows it was not highly valued by customers and too many of our conversations in the living room have been taken up discussing the impact of failure, rather than demonstrating why our affordable proposition will succeed. We hope its removal will support our field agents and focus all their attention on communicating our affordable fixed, upfront fee and build confidence with our customers that we will sell their homes.”
PurpleBricks has a range of advertising packages for its customers. From July 11, its standard package will increase from £999 ($1,191 U.S.) to £1,199 ($1,429 U.S.), the Pro Package will go up from £1,399 to £1,599, the higher-priced regions’ Classic Package will increase from £1,499 to £1,999, while the higher-priced regions’ Pro Package will rise from £1,999 to £2,499.
“The price increases are a necessary step, not just to strengthen our revenues, but also as a result of the additional costs our business has had to absorb over the past few years,” Marston wrote.
“We are confident that where we’ve landed strikes the right balance, maintaining a great value proposition for our customers, while also enabling us to invest further in our technology and support our field agents to deliver improved and consistently strong service.
“Our proposition has always been about enabling customers to sell their homes for a fair, fixed and transparent fee and in the current climate, this is unquestionably the most cost-effective way to do that. As you know, the cost of a similar service on the high street is considerably more, particularly when set against a commission-based model which has benefited from the extraordinary growth in house prices.
“As we communicate our new pricing to customers, it is crucial we emphasise the benefits of our proposition, the opportunity to tailor the service they require to meet their needs and dispel any misconceptions that low price equates to low value.”
At the end of May, PurpleBricks dismissed dozens of staff for reportedly not hitting sales targets. Last month, the company announced it would delay publishing its latest financial results until August.