I was in a meeting with Bob Walters in New Zealand recently after the last of the BWT Peak Performance national seminars, and Bob brought up the fact that it seems that every time he is speaking with an agent or property manager, they mention that more and more of their prospective clients are asking for fee discounts! A lot more than is considered ‘normal’!
However, it seems that since this New Zealand trip, my clients are also regularly bringing up this topic in conversation, and they too are experiencing more and more fee discount requests.
Whether a result of media awareness or other reasons, it seems more people are becoming fee discount savvy! We are unsure of the motivating factors, but what we are sure of are the ways in which we can overcome or reduce the number of fee discount requests we might receive from prospective clients.
Here are ten ways to help you beat and overcome fee discount requests:
1- Understanding that discounting is a point of difference – everyone needs a way to impress their clients, to stand out from the crowd, and win them over to signing a management agreement with you. However, too many property managers rely upon this ‘edge’ to persuade a prospective client to say ‘yes’ to their proposal, by using discounting as their great differentiator. Most people don’t realise that discounting is a point of difference, and the easiest for your competitors to copy.
Firstly we must realise that discounting substantially reduces our profit margin, being our earning surplus over and above the expenses to operate the business. It isn’t financially effective at all to keep operating this way!
We simply need to find another point of difference that will still impress and persuade the client, without costing us our revenue at the same time.
2- Get a better point of difference to impress – instead of discounting we can use other differences to stand out from the pack, to impress the client over our competitors, and sign with us.
Consider having a choice of fee packages so that clients are more inclined to negotiate what fee package they would like instead of negotiating your fee. Also, consider effective video marketing for properties (see virtuallyincredible.com on how to do this yourself) or learning how to use a property owner’s handbook and a tenant handbook. Another effective point of difference is the use of the rest solution; allowing landlords and tenants to access information on rental payments 24 hours a day (see. rockend.com.au for more details, or speak with your property management software program supplier for a similar service).
3- Look different with your marketing material – when perception is reality, what does the quality and branding of your marketing material say about you? If your marketing material (introduction booklet etc) looks basic, tired, and like it was created by an amateur using Microsoft Word, your clients will expect you to be cheap (or cheaper) because that’s the way you look! However, if you have invested in creating ‘wow-factor’ glossy marketing materials, your brand is professional, your website looks inviting, your prospective clients will not be surprised when you cost more. Understanding that everyone knows that ‘you get what you pay for’, use this to your advantage with the perception that you create.
4- Know how to overcome fee objections – just like the sun is coming up tomorrow, you will be challenged on your fees. With common objections like ‘if you could match your fees with the other agent down the road’ or ‘your fees are too high, will you come down?’ or ‘the other agent will give a discount why won’t you?’ are easy to overcome, if you just know the right words and persuasion.
However NOT knowing how to overcome these will result in pressure to reduce your fees, and sadly this is what most property managers do when confronted with such a scenario.
Want some effective fee discount request scripts on audio, to learn and listen in the car between appointments? Click here for more information.
5- Strive to be better than your competitors! Just wanting to be the same isn’t good enough! Always look for new customer service strategies to out-service your competitors and weave these into your prospective client presentation. You can impress your prospective clients with your unique customer service points of difference, instead of having to discount.
Read part two of our article and we will give you then the next five powerful keys to beat fee discount requests!