Part of our activity is visiting offices and conducting performance health checks.
To do this we ask for a list of the fees prospective clients are quoted. This is usually an A4 sheet of paper with the company logo on the top.
We ask “Is this what you charge?”. The answer is always a very resounding and confident ‘yes’!
Fee discounting is what we find common!
However, when we start opening files and look at the management agreements it is usually a completely different story! The fee structures are consistently discounted- management fees dropped here, letting fees halved there and other fees missing altogether!
We believe this is for two main reasons. One is that most property managers do not have the sales skills or training to negotiate their fee structure properly, and secondly real estate business owners have not invested the resources into ‘wow-factor‘ and frontline marketing material so that the department is perceived as the best in town.
When people perceive you to be the best, they will usually pay the fee structure you ask for.
People like to do business with whom they perceive to be the best and will pay your fee accordingly (a majority of the time).
Recently we have seen an increase in clients becoming more fee focussed, more wanting cheaper fees.
Despite this, we firmly believe that you need to look your best with your market perception if you are to stand a good chance to win better fees than your competitors.
Property managers feel they need to discount!
Without this, the property managers feel they need to compete on fees as the prospective client cannot see the difference between them and the other competitor down the road. They both are perceived the same because to them they look the same! A lot of property managers say they are different but have no real points of difference for the client to perceive them as being different.
It usually results in discounting to get the business.
This lowers the average profitability per property managed, increases the burden on the department and so the property manager has to manage more property for less income. The problem is further compounded by less remuneration for the property manager and increases levels of dissatisfaction within their roles.
The result is property manager burnout and high staff turnover. These are contributing factors to the crisis the property management industry is facing today Australia wide.
How can we turn this around?
You can change this! Focusing and investing resources into your department, together with guidance will prove fruitful and financially very rewarding. Here are some things you can do that will make a big difference to the conversion rates in getting the management listing.
1- Get Your Property Managers To Spend Time With The Sales Team In Training
No doubt your sales team spends time training on how to overcome objections when trying to get a listing. This process is no different when trying to get the management agreement. Have your property managers become involved in training regularly.
2- Resource Your Property Managers
Ensure they have scripts and dialogues to be able to overcome objections and know effectively what to say. At the Bob Walters Team, our Rent Roll Growth Pack is jammed with effective scripts and dialogues.
3- Invest in Creating Front Line Tools
Invest in creating a ‘Wow-Factor’ reaction with prospective clients so that they perceive you as the best department in your area- so the choice for them is plainly obvious.
Develop frontline tools with lots of colour, graphics and photos. Tools like:
a) A Powerful Brochure- glossy brochure heavy with colour and photos, however not too much wording. An overview of your department only.
b) A Detailed Proposal- A booklet with a summary of your services in ‘What’s In It For Me’ (WIIFM) Language. Again lots of colour and photos. This booklet is delivered to prospective clients before you arrive at the appointment for maximum wow-factor effect. This booklet can also be used as a pre-listing tool.
c) A ‘Wow Factor’ Listing Kit- Create a ‘Wow Factor’ listing kit with samples of your work and also display pages with lots of colour and photos. Have photos taken of the team at work, doing inspections, signing up tenants etc. Use lots of pictures and colour to visually impress prospective clients with what you do.
d) “A Comprehensive Property Owners Handbook”- Outline to clients all that you do and also specify the right expectations in being a good landlord. If you promote to prospective clients your handbook is ‘available only for clients that sign up with us’, you have now tapped into a powerful influence factor that people want ‘what they cannot have’. Used correctly the handbook will become a powerful point of difference to get you ‘over the line’.
It’s not hard to get the business- you just have to know what to say, how to say it and make sure you look like you are the best in town!
Just getting one property for management is worth thousands of dollars over the average lifetime of the management period, so it is worth investing to get ‘the front-end’ looking like a million dollars!