Are you creating an ‘attraction’ business in your Property Management department?
Businesses are spending time, resources, energy and funds on more and more creative business building strategies, yet at the same time are losing managements. Consistently, I meet BDMs who are signing up 60, 70, 80 or more new properties a year, yet the business is also losing the same volume or more for a variety of reasons. In many cases, the reasons for loss are surveyed, and on the surface can be claimed to be legitimate, yet I wonder whether we always get to the heart of the matter. I wonder even more what might happen if those businesses focused their efforts on becoming ‘attraction’ businesses.
Good and loyal clients are not only critical to revenue and profitability but also to the maintenance of Portfolio numbers and ultimately the value of your business. There are numerous estimates on the cost of creating new clients versus the maintenance of existing clients, which range from seven times to 20 times. If agencies are losing clients and keep losing them, and have to keep replacing them or face the demise of the Portfolio, then it is possible – no, probable – that they are spending time, energy and money on marketing and growth that could be going elsewhere in their business.
Client losses are often thinly disguised as ‘sold’, ‘owner moving back in’, lured by ‘cheaper fees elsewhere’ or decided to ‘manage it themselves’. All of these, perhaps with the exception of sales, could be resulting from a failure to build on client loyalty. In fact, it could also be argued that some investors resort to selling because they have lost sight of their investment goals and have not been nurtured in that process by their Managing Agent. So, if these losses are relating back to failure or inability to build loyalty, are they preventable?
It seems to me that there are some in our industry who place too much reliance on the contractual obligations of the Managing Agency Agreement and do not focus on strengthening that important client – agent relationship. Thriving, growing companies, however, very quickly realise that keeping clients happy is an economic necessity and in fact go about implementing strategies for delivering high-value, positive experiences to landlords on a consistent basis.
Not only does building these relationships ensure longer relationships with their clients, but it builds loyalty. It is no surprise that the LOYAL clients feel inspired to add to their portfolio and indeed refer others to the business. They become free advocates for those businesses, reducing their advertising spend by voluntarily spreading testimonials for their service. Business starts flowing through the door. This begs the question of why… Is there a secret ingredient in the referring client?
Business is built on relationships and relationships are based on important qualities of trust, respect, appreciation and understanding, as well as clear, open and honest communication. These aspects are all enhanced when the client experiences first hand, consistency in the delivery of service. In fact, and rightly so, they come to expect it after a while and know they will not be disappointed. They appreciate that there is a system at work behind the scenes and will be comforted with the signs that these systems are adhered to with monotonous regularity. They know that the service standards will be predictable and will not drop below a certain point. It is this regularity, consistency and dependability that builds trust in the client-agent relationship, and it is this trust that can quickly turn happy clients into ‘raving fans’.
The really exciting part of this is that we now know that Property Management businesses can become ‘attraction businesses’. The twist in the tail is that those who are achieving this ‘natural growth’ have extra confidence in the nature of their client relationships. No longer are they at the mercy of individual Property Managers building individual relationships with clients. The loyalty has switched to the business, and rightly so. Bravo for those businesses on this path to ultimate success in Property Management.