Property Management Growth: Increasing your Conversions

In Part One of this Three Part Series on growing your rent roll, New Zealand Property Management Profits Director Aaron Clancy covers some of the reasons prospective clients may be talking to you and what you need to do to increase your conversion rates.

When it comes to understanding a prospective client, it is extremely important that you ask the right questions. When you talk to a homeowner or property investor, do you talk differently? Do you use different lingo? Do you listen to what their needs are and focus on that? Or do you just go with your sales pitch that you have always used? The property management industry is fierce and it’s important that you have a competitive advantage that separates you from your competitors. Too many property managers are using the same process when dealing with leads, and therefore the results they achieve in converting these leads are fairly similar. In Part One I will cover exactly what you need to know when talking with prospective clients and the various areas you need to consider to increase your conversion rates!

Typically, when a property manager goes and talks with a prospective, they will sit the client down and run through all the features of their company and why they are so great. What the property manager doesn’t take into consideration is that the prospective client has probably already had the same lecture from three other property management companies. The chances of you securing this client are now down to who they liked the best, rather than the person who will meet their needs.

Let’s use an example here to illustrate this point.

Picture going to an electronics shop and the salesman with his swept-back, greasy hair rocks on up to you and asks “How can I help you today?” You let him know that you are interested in buying a new stereo for your lounge. From here the salesman nods, and takes you over to the latest stereo that he thinks would be brilliant for you. You don’t have the heart to tell him you’re not interested or that it isn’t suitable so you just stand there for ten minutes and listen to him go on about all the features this product has. At the end, you just want to get out of there and you say thanks and that you will have a think about it, but really all you keep saying to yourself is “Run!”

Now let’s flip this around. You walk into the electronics shop and the salesman, with his short-back-and-sides haircut, walks up to you and asks, “How can I help you today?” You let him know that you are interested in buying a stereo for your lounge. The polite salesman questions, “What do you want your new stereo to do, so that I can point you in the right direction?” You tell him that you are after something elegant, silver, and it must be able to be used as a surround sound for your 50 inch plasma. “Great” says the salesman, “What price range are you looking at?” You tell him you are happy to spend up to $800. The salesman now asks, “Have you owned a surround sound before?” You tell him you did but that you had to throw it out because it was too messy with all the cords running from the TV down to the unit and from the unit to the back speakers. With this in mind, the salesman walks you over to a classy silver surround sound stereo that is in your price range and that is wireless – no cords! It looks perfect and you buy.

Now this may sound straightforward, or obvious, but if that is the case, why do so many property managers jump the gun with a prospect, assume they know their needs and launch into the features of their company?

To get around this, we need to understand what the pain points are for the prospective client. Once we find these out we can help service their needs, and the extra work you put in at the beginning will result in increased conversions!

The first question you would ask after introducing yourself is, “Why are you looking for a property manager?” Don’t give the speech about why your company is so great until you find out their issues. Talking about how great you are will come naturally when the pain points they are facing come to the surface.

Let’s use some examples of why they are searching for a new property manager:

They were let down in the past by their previous property manager.

Explain how over the past seven years you have never lost a property to a competitor due to bad service. Find out exactly what the previous property manager did. For example, if they never paid out on time, tell the prospect how you have a dedicated admin team who ensure that rents are monitored daily, invoices are checked and paid to creditors on time and, most importantly, how owners are always paid on the first working day of the month, snow, rain or shine!

Tenants stopped paying rent and managing their property became stressful.

Run the prospective client through your tenant screening process. Tell them how it can be hard to screen tenants accurately when you are putting them into a property privately. Explain how you always carry out a credit and character reference check on the tenant and how this helps to prevent tenants slipping through who appear suitable on the surface. After explaining the screening process, run the prospect through their options for recovering the lost rent and having the tenant evicted if they are still there.

Not interested in managing the property themselves, but want to know what makes your company so great.

Talk about how your fees are competitive in your local market and how you go the extra mile for clients. Give examples. Explain that you are a family-run organisation, or a four-time winning property management agency! Whatever it is, talk about the benefits you can provide that make you better than the company down the road.

You get the point; you want to get the prospective client to spell out what their concern, issue or frustration is, and then tailor your pitch to tap into the needs and emotions they describe. Do this the right way and you will close more prospects.

So now we understand how to solve the needs of prospects looking for a property management company, but how can we track what we are doing and how will we know this is working? From research in our own company, I know that a client will stay on average for five years and each client is worth around $10,000 to our business over the lifetime they stay with us. Looking at these numbers, have you ever considered that for every client you don’t convert you are letting $10,000 slip away? I can’t stress how important it is to track new business and follow up on leads.

Tracking does not need to be difficult. Go to www.propertymanagementprofits.com/tracking and download an example of how you can lay out your tracking sheet. The next step is to ensure that all staff members are aware of it and that they need to enter data into it. Put the file on a server your whole work has access to, or use a free service like Dropbox. This way you keep one version where everyone can update it. Each month you need to go in and see how many leads you have had, and how many have converted. For those that haven’t converted you want to make sure that you work on the reason why they didn’t convert, or with those still in the pipeline, you put it in your diary to follow up with them. Convert one extra lead per month, and after 12 months you will have an extra $120,000 in your business over the next five years. Small changes can create impressive results.

Understanding your prospective client and tracking conversions is an extremely important facet of growing your company. The problem is most property management companies get this wrong. If I walk into your company, I should be able to see how many new clients you signed up this month, be able to compare it to last month and be able to see how many prospects you currently have that are still in the pipeline. If I can’t find these results, then you’re not tracking new enquiries, and this needs to change! Start making small changes now in the way you handle prospectives and the way you track enquiries, and I guarantee you will have more consistent business growth on a month-to-month basis.

Next Issue: Aaron will cover how to build an effective team around you.