Purplebricks US: Massive Marketing Spend But Not Enough Customers

Purplebricks is struggling in the US because its massive marketing spend is not generating enough customers – so says global real estate tech strategist and thought leader Mike Deprete.

Delprete calculates that Purplebricks US spent over $20m on marketing in the six months to December 2018 to generate around 1,200-1,400 new listings. This meant an acquisition cost of a substantial $15,000 per customer.

However, despite this Deprete is not dismissing the impact Purplebricks could have on the US real estate market. He says that their underlying revenue has grown impressively and they appear willing to commit significant resources to the US market and evolve their model as necessary. He comments: “Purplebricks is still dangerous: it has deep pockets, a willingness to spend, and the self-awareness to pivot when things aren’t working. I wouldn’t count them out of the US quite yet.”

Interestingly for those involved in the estate agency business in the UK Delprete says that Purplebricks’ UK position is quite different: He suggests that here their business model is successful and that the main challenge is securing further growth as the company saturates the market.

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Source Mike Delprete
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