Without data, decision-making is horribly difficult. With data, your business can be more competitive, better informed and extra efficient. However, the data absolutely must be accurate. Never underestimate just how risky it can be to build your strategy on inaccurate data. In fact, it can lead to incorrect insights, faulty decisions, wasted resources and lost opportunities. Ouch!
“It is a capital mistake to theorise before one has data.”
Sherlock Holmes, A Study in Scarlett, Sir Arthur Conan Doyle
The implications of inaccurate data
Let’s look at some real-life scenarios that could impact you as an estate agent if the data you rely on is inaccurate:
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Pricing properties incorrectly
Pricing based on flawed market comparables or outdated trends can lead to overpricing. These properties may linger on the market for too long, causing the buyer to pull the property or instruct elsewhere. On the flip side, underpriced properties can cause financial losses for you and your client, as well as potential damage to your reputation.
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Opening a new branch in the wrong area
Suppose you base your decision to open a new branch off the back of flawed data. Imagine selecting the location based on perceived market gaps, only to discover strong competition in that area. This can risk the success of your new branch. If you had had access to accurate data, you could have chosen a more stable location.
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A misaligned merger or acquisition
If you’re using inaccurate data, you may end up merging with or acquiring another agency that isn’t a good fit or doesn’t align with your strategy. Let’s say you were looking to acquire an expert in lettings, and you go after a firm that has the highest market share of rentals in your patch. If you’re basing your decision on inaccurate data, you could have targeted the wrong business altogether and a much better prospective business slips through the net.
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A poor marketing campaign
If you’re using poor or incomplete data in your marketing targeting, you’re not going to reach the intended audience. You’ll misjudge who the potential buyers are and fail to generate interest in the property.
Which is the most comprehensive data source, then? You may wonder. There are so many providers claiming to have the best data available. Do your research, attend demos, and test the products. Without comparing the datasets and approaches available on the market, you are risking buying a cat in the bag and purchasing incomplete or inaccurate datasets.
What happens if you base your strategy on inaccurate data?
Poor-quality data can drive your business results down like the Titanic. You may end up with:
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Misaligned business goals
Business strategy based on conjecture may result in wasted time, money and effort. You could end up trying to improve the wrong areas of your business, overlooking your actual weaknesses. This can jeopardise the overall success of your agency.
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Skewed understanding of your agency’s performance
With inaccurate data, you don't know the true health of your business. If the data only covers 70% of the property market, that missing 30% is a huge gap that could distort your understanding of what’s really happening in your agency and beyond.
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Reputational damage
Providing your clients with wrong information such as incorrect market insights may erode trust. You may come across as lacking knowledge in the subject matter. Your clients may make decisions based on incorrect information you’ve provided them with. It could also result in you misunderstanding your vendor’s needs, preferences and behaviours, leading to a disconnect between the brand and its customer base.
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Missed opportunities
With inaccurate data, you may miss emerging market trends or changing buyer preferences. You may provide inaccurate property valuations, causing the client to instruct elsewhere. Moreover, you’ll miss crucial marketing opportunities. For instance, if you’re conducting a campaign aimed at listed properties but the data only covers two-thirds of the market, you’re forfeiting one-third of potential marketing opportunities. This could significantly impact the success of your campaign.
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Reduced revenue
Erroneous data may lead to misguided pricing strategies and missed sales opportunities. Your commission rate can be jeopardised. Inaccurate property details may also impact your marketing and you may attract fewer potential buyers and struggle to sell properties.
What causes poor data quality?
Incomplete data
Missing or incomplete data is one of the biggest reasons data quality falters. How much of the property market does your PropTech provider cover? It may be something you hadn’t even considered checking. But actually, if they don’t track the whole of the market, the data you’re drawing insights from is going to be instantly flawed.
Outdated data
The property market moves quickly. If the data you’re relying on is not up to date, your property valuations will be wrong, market trends will be misjudged, and investment opportunities missed. The clients and vendors will go to another agent.
Inconsistent data collection methods
Do you know how the data is collected and from what sources? If the sources are limited or weak, it can lead to ineffective data. Ensure the data is factual, not modelled or sentiment-based.
Conclusion
The property market is brimming with data providers racing to sell you their perfect solution. All those great tools out there, are only as good as the underlying data that powers them up. If the data is subpar and incomplete, and you have not compared it with other providers, you are probably leaving lots of money on the table.
When considering a Prop Tech company, look deeper than the thin veil of great looks and snazzy templates. Ask questions about how they gather their data and how much of the market it covers. You can’t be successful by seeing only 70% of your market.
Full of doubts and questions? Talk to us about your estate agency marketing. We have helped many agencies to grow with our tailored data solutions and smart, cost-effective marketing strategies. Visit our website or book a quick call with our team.
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