In Part 5, we touch on technology and how that can affect the profitability of a business.
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Brad: Welcome to another edition of Rent Roll Insights, I’m Brad Miller from Real Estate Dynamics where we help Property Management businesses build, buy and sell through our Rent Roll Coaching Property Management Training and Business Brokerage right across Australia. In this series we’ve been talking about how we can make your business AI or robot ready. I’m joined today by Nathan Brett from the leadership team at Real Estate Dynamics. Welcome along again Nathan.
Nathan: Thanks Brad.
Brad: Nathan, today we’re going to take a look at technology and how that can affect the profitability of a business. Can you start by explaining a little bit about what a typical agency looks like in terms of technology?
Nathan: Well in our experience Brad I guess one word that might highlight it is overcomplicated. You see, I guess the technology hasn’t kept up in the real estate industry for many years, particularly Property Management. So, what a lot of offices have done has gone out and bought other apps and tech platforms which largely don’t integrate with any of the Motherships. So, in a nutshell what you end up with is a whole lot of tech platforms that are creating noise that are competing for time and attention and in a nutshell it’s messy.
Brad: Yes, so it’s a little bit like you know bing-bing-bing all over the place competing for some attention it sounds. In a real estate agency, what does that landscape sort of look like? How does it affect people?
Nathan: Well when we’re talking with our clients, one of the first things we get them to have a look at is what we call the “Motherships” you know, what are the master systems or the big platforms that are driving the agency. And certainly, at the moment the two big ones that exists to the Agency is CRM, which needs to be extremely powerful, and the second one at the moment is the trust accounting software that they use. You know if you look at that as the Motherships, any other apps or add-ons will surround the Mothership.
Brad: That makes sense and what sort of protocol should agencies consider around their software?
Nathan: Absolutely. Well first of all, where stuff goes in the business. So, that can be as easy for example as looking at where stuff goes when you’re looking at a prospective client; be it a prospective Tenant or prospective Landlord or even a prospective employer and contractor and perhaps once they actually do become a client of the business. So, having protocols around that so people can go and find the information from the technology platform that they need rather than having to rifle through duplication and replication to get the info they need.
Brad: Yes. So, we’re looking at so trust accounting software, a CRM and are there any other typical technology needs that would encompass an agency?
Nathan: Yes, look absolutely. I mean when you look around an office there’s of course you know typical offices will have you know leasing software, they might have maintenance software, they might have other products, of course most will use Outlook or 365 or platforms like that, and of course all of these products and platforms have the ability to create that noise. They’re competing for time and attention and handled poorly, it can be as noisy as standing at the stage of a rock concert.
Brad: Yes, that’s right and definitely as we talk about competition for time, time is something that directly relates to the profitability in a business doesn’t it?
Brad: So, I think one of the things that you know we often refer to as being ‘a mile wide and an inch deep’. Can you explain a bit more how that relates to the technology?
Nathan: Yes well I guess the second problem that a lot of offices face is they’re quick to purchase technology and slow to learn how it actually gives them maximum leverage. So, in our experience the mile wide and the inch deep; the mile wide is a plethora of platforms and apps that are purchased by an agency, the inch deep is the depth to which they’re using these platforms.
Brad: Make sense.
Nathan: And sadly, I mean you know for example we’re in an office recently with more than 1800 under management who are still manually receipting and hadn’t investigated the ability. It’s a full-time role in this business and stories like that aren’t uncommon.
Brad: And so basically the team says, “hey we need this”, it’s purchased for the business and ultimately there it is; another thing that adds to the noise of technology. Can you give us any specific examples that you’ve seen of late that would probably highlight the use of technology and being effective or ineffective in a business?
Nathan: Yes, look absolutely, so another one of our coaching clients had some really great software that helps to manage and streamline repairs and maintenance. But one of the things that they did is I guess they did a bit of a diagnostic on the effectiveness of that platform and they found that more than 75% of their repairs and maintenance wasn’t reported through the app, that forms part of that tech platform, and in fact Tenants were ringing or sending in you know maintenance requests through other sources. So, when they did that diagnostic what they found is they have good technology, it would certainly give them leverage, but they need to come back to the processes and say, “well how do we get our Tenant customers to be able to use the app to give us that leverage? Otherwise we’re just going to duplicate and replicate things.”
Brad: So, what ended up happening from there? What was there learning in that process?
Nathan: Well one of the things that they did differently at the point of signing up a new Tenant, the sign up ceremony, instead of just giving them a brochure and saying, “this is the app”, they’re actually helping the Tenant by downloading the app, showing them how to use it and spending probably three or four minutes longer, so that all new ingoing Tenants now have the ability to use it rather than to leave the office on you know a wing and a prayer approach.
Brad: That makes sense so ultimately there you are, you’ve got the Tenant there at the time, here’s the app let’s download that together and this is how it’s used, is that correct?
Nathan: Makes sense when you think about it, doesn’t it?
Brad: It does, it does. And in the future, you know we’re hearing some talk about efficiencies in software, we’re looking at ultimately some payment platforms and things. Can you share a little bit about what you’ve found in that space around some financial elements?
Nathan: Absolutely Brad, I mean we’ve been saying it for many years at Real Estate Dynamics that you know trust accounting software as it sits today will be largely redundant. And you know, there’s no need for agencies to hold money, which becomes second-hand money to the Landlord, if you’ve got a great platform for the Tenant to pay the Landlord directly and the agent to get their fees from credit or debit card, you know through a program like American Express for example. So, that actually replaces the clunky software that we have now and a need for a CRM driven software you know, we have a new Tenant, it’s 12 months, bang; this is the tasks that need to be completed. We’ve got a new Landlord, these are their preferences, bang; a series of tasks. That’s the software we need, isn’t it?
Brad: Yes, I think so, so a powerful CRM program which will be probably most vital in the agencies, that’s what you’re looking at?
Brad: So, in a nutshell we’re looking at technology overall. There’s a lot of noise that it creates, you know we want to make sure we’ve got a strong CRM program, we want to make sure that you limit excessive amount of apps and if you do require all those apps that your team, your people understand them to quite an in-depth level, they’re getting the most effective use out of it and it is helping them to leverage their time. Nathan thanks for coming along again today, it’s always good to have you on board here. I’m Brad from Real Estate Dynamics thanks for joining.