Millionaire Mindset

(Just to head something off at the pass – this isn’t just a skewed London viewpoint. The capital of course contains a huge number of these, but even if you take London out of the stats its still 1 in 73, and areas you might not expect (Cornwall, Somerset, Uttlesford) all have had a 200%+ increase in £1m homes in the last 6 years.)

These figures are just looking at the total property stock, i.e., houses that exist…not necessarily on the market.

So in terms of the property market then, the number of £1m+ homes for sale has doubled in the last 6 years too, and, the number of areas outside of London where the average asking price exceeds £1m has doubled too (from 30 to 66).

And then for agents, this is more important than you may think… an average fee for a home priced at £1m is just shy of £15,000. The fees for an average house (at say £300k) is £3,300, so 78% less! I talked about this in last months article so I won’t dwell on that subject now, a link to that is below.

More importantly is understanding the ‘millionaire mindset’, this rapidly growing sector of the market thinks differently, and what they require from an agent is very different to the norm. To not get too bogged down in agency, lets look elsewhere for comparables:

Million pound home owners are more likely to choose:

Private banking over high street banks

Private schooling over state education

Private health care over NHS facilities

You could add hotels, restaurants, even magic-circle lawyers vs high street solicitors, the list goes on.

The differentiated service they demand, and are willing to pay extra for, has to be signalled to them through differentiated branding and marketing so they know to ‘buy this, don’t buy that’.

As I write this I just finished a Zoom meeting with someone from one of the country’s most prestigious removal firms.

During the conversation, he mentioned casually that all of their on-site personnel wear a shirt and tie – counter to not just the increasingly casual dress code we all adhere to these days, but especially so in such a physically demanding job.

They don’t need to do this of course, but it is a reassuring signal to their clients that ‘this is the removal company for them’.

If your estate agency marketing is trying to appeal to everyone it therefore appeals to no-one, and it makes life so much harder trying to appeal to £1m+ homeowners to get a foot in the door, let alone win a valuation, let alone command a strong fee, even if your service levels tailored to them are on a par with the examples I gave above.

In estate agency terms I don’t think that signal really has anything to do with your dress code, per se. The signals homeowners are looking for are things like your stock register online (selling similar properties to theirs), your branding and messaging, social media content and the calibre of your marketing investment, speaking specifically to them and people like them.

I said at the start of this article that the number of £1m+ homes for sale has doubled in 6 years, and is still growing…what is your strategy to ensure these homeowners think of you, not a competitor, when they are considering selling?  

David Lindley, CEO of By Design.

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