Growtion Case Study: Zoopla - Smarter property search
Zoopla - Smarter property search
Zoopla is the second-largest property portal in the UK. Its early-2017 valuation is around £1.5Bn. It listed on the London Stock Exchange in June 2014.
Five and a half years earlier than that, we were around a dozen people in a large, high-ceilinged warehouse in Acton. With a purple pool table.
In 2008, Zoopla was in its first year and experimenting with "virtual" estate agency. By December, it had decided to pivot to a similar property portal model to market-leader Rightmove. That involved subscriptions from estate agents to advertise their properties on the Zoopla website.
My background includes being one of six staff who had been with an early property portal, Primelocation.com, from pre-launch in 2000 to a £48m exit in 2005. My role there, as we’ll see in more detail elsewhere, had been to organise the Sales Strategy and Process to drive recruitment of estate agents to the site.
That was why Zoopla asked me to join them to launch the agent subscription product.
The first thing to get right was the Concept. Essentially a new Product – but with the added challenge of using a brand that was already a year old and had its own identity already – Zoopla needed to get out to a fragmented market of 10,000 companies, of which 80% were single-office firms run by the owner.
The overall strategy I’ll come back to, but the critical Element to consider here is the Concept. What was it that took our agent revenue line from £0 to £3m+ per year in that revenue line when I left three years later?
Iterate, iterate, iterate
It wasn’t the thing that we initially tried – and that’s the incredible power of iteration.
Our original strategy was to create a brand new “pay-per-lead” model, where agents would only pay for the leads that we generated. Based upon the tried-and-tested Google Pay-Per-Click (PPC) advertising model, initially we charged £5 per “Valuation Lead” and £1 per “Applicant Lead”. In time, we increased these to £7.50 and £2.50 and gave agents the option to pay a flat monthly fee of ~£100 instead.
What we found was that the initial Minimum Viable Product (MVP) drove some unexpected behaviours at the time – but perhaps obvious in hindsight – in the estate agents that we were able to recruit. Whilst we attracted the likes of Hamptons International, the majority of our initial clients were single-branch firms for whom generating leads needed to be as cost-effective as possible. Cost Per Acquisition (CPA) of their clients was a key consideration for them – and that meant that they argued.
Man, did they argue.
For a significant chunk of our Early-Adopters, phoning me up or emailing and complaining that a “Lead” was not a lead was part of the invoicing process. We were structured in our charges and automated much of that process but many clients knew that it essentially cost us more in my time to spend 20 minutes on the phone with them, that it would to credit them back the £1 value of the lead that they were disputing.
What all of this demonstrates is that, even in the most successful businesses, a willingness to get the MVP out there and then iterate is more important than having a Concept and holding to it for too long. Indeed, I would argue that the reason that Zoopla is so successful is actually because of this willingness to iterate and change its entire business model in order to listen to market feedback and pursue growth.
What is clear is that Zoopla would not be the huge success it is now, were it not to have listened to the market’s response to its initial "virtual" MVP and pivoted to where the money came more readily – and then iterated further from there. Use this on-the-job market research to inform the next strategies that you roll out. Never assume that this is finished and test your Concept rigorously and repeatedly.