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
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
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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