40 | FINANCE WORDS | Charles Purdy


BUSINESS


www.opp.org.uk | FEBRUARY 2012


Changing partners T


o be frank, the fact that a Spanish bank (in this case CAM, once the country’s fi fth-largest) sought out a new and unexplored channel of distribution via the British estate agency chain Connells in the middle of last year wasn’t really that surprising, given the position that the bank found itself in. Almost overnight, CAM, like many other mortgage lenders in Spain, had 15,000 repossessions on its books. It suddenly needed a partner, one that was experienced in selling property, rather than fi nancing it, and a partner that had a sound reputation in a market the bank wanted to target - the UK. The Connells-CAM partnership is


a good example of how the tougher trading conditions we have all been struggling through have driven more overseas property companies to focus on new alliances. After all, the industry has worked through networks and partnerships for many years. Indeed, having a network of partners has always been integral to the overseas property sector, especially for third party service providers. So … with a depressed market, many companies have had to reassess their existing partnerships, perhaps tweak the details of them a little and nurture those in which they see a


real long-term value. “In the heady days before the fl oor


fell out of the markets, commissions were high enough for a healthy split to be passed on to the introducers of leads,” reminisces Jana Korpova at Smart Currency Exchange, who joined the currency broker near the height of the boom in 2007. “However, many of these international partnerships were based on a short-term perspective and didn’t take into consideration the fact that one day all the perks could disappear. And that’s precisely what has happened – depressed property prices mean potential commissions and referral fees are far less attractive. The cost of acquiring a lead and then converting that lead to sale have gone sky high – it’s little wonder estate agents are reducing their marketing costs.” With less money for marketing, there’s


little doubt the key to a worthwhile partnership now revolves around two companies with complementary services and similar values together helping to meet a client’s requirements, as well as each other’s long-term business goals. A sense of “we’re in this together” persists, with an emphasis on customer care. Recommendation and trust is arguably the most powerful form of marketing today.


Matthew Cameron, head of the French real estate legal department at law fi rm Ashton KCJ, could not agree more. “In an ever-harder business environment, the ability to work with other professionals is extremely valuable,” he says. “We fi nd that clients appreciate it when we can identify areas that may be beyond the scope of our work, but still put them in touch with other businesses that can supply the extra service required. The most successful relationships are those where we are able to cross-refer clients, to the mutual benefi t of each service


“To survive you’ll need to offer more than simply referring enquiries to ‘partner’ developers”


provider. A recommendation from another professional bears much more weight than an advert.” And Rob Longley at French agency


The key to success | will lie in working together as the industry gets more complex


Beaux Villages is seeing the same trend. “The property market in France has shown some signs of recovery but trading conditions are tough and look likely to continue in that vein,” he says. “To ensure a positive outcome for deals we depend on partners who share our values of friendly effi ciency and customer service. In short, when choosing a partner in today’s climate, it’s vital that both parties have a clear understanding of how each can add value to what they offer their clients, and be able to explain the benefi ts in clear terms. For example, explaining to a client that the cost of their legal fees could conceivably be covered by using a currency broker to make transfers rather than a bank, neatly complements a partnership between these two types of service provider. Likewise, an agent should be able to explain to a vendor who intends to repatriate funds from a sale that a good rate of exchange adds fl exibility to their asking price. Swapping educational literature and brochures, hooking up weblinks, producing joint press releases,


When a leading high street agency chain in northern Europe suddenly started promoting thousands of repossessed Spanish homes in its branches and on-line in the middle of last year, it was obvious that a change was in the air. What is going on, and why?


sharing stands at exhibitions and even a day spent presenting to each other’s sales teams all help to achieve this type of relationship. Learning the ins and outs of your partner’s target business and timescales for conversions are also paramount. Certain third party providers only value leads of a certain fi nancial worth, or from buyers with an interest in a specifi c area or being so many months from a purchase. Sending them leads that don’t fi t their specifi c requirements wastes their time, leads to disgruntled complaints from customers who don’t get contacted ... and eventually ruins a partnership. It’s never been more important


to be selective about your partners. Turkish agency Spot Blue, for example, introduced its own due diligence checks for every developer it worked with in 2009. “We’ve built up a good reputation since we started trading in 2003,” says MD Julian Walker. “We realised that to keep it and to survive in this market, we’d need to offer more than simply referring enquiries to ‘partner’ developers in Turkey. We vet every developer or seller we work with, checking they are legally registered and when they were registered, who the directors are, their development history and completion status - even their annual profi ts.”


Given the dominance of the internet, alliances with on-line companies, or portals, are vital. Most property searches start online, so your partners need to be selected carefully and given clear strategic goals. Smart Currency Exchange recently became the currency partner of Rightmove Overseas and Smart’s sister company, information provider The Overseas Guides Company, supplies regular content to the site. “Due to the nature of both businesses it took us some time to agree on the objectives for our partnership,” said Jana Korpova. “We not only supply on-line content for Rightmove’s currency zone, we are also exploring avenues that their and our businesses have to offer.”


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