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Property Managers: How To Drive Profit?
Written by Isabelle Leclaire on August 15th 2018
Why this article?
This article is part of “Business Essentials For Property Managers” serie that aims at helping property management businesses grow by building tools to acquire clients and improve customer service. 
What’s the aim of this article?
This article aims at providing clarity on how to drive profit and get better at it overtime. 

Many property management businesses do not have enough clarity on how they drive profit. Some don’t invest in marketing and keep up with occasional referrals. Others invest in marketing but get too little or no result out of it, eroding company’s profit as a consequence.

To drive profit you need to invest in marketing and have systems lined up to convert these marketing efforts into profits. Investing in marketing without the systems is a sure way of wasting money. Driving profit is a process. No input, no cash out.
What’s in this article?
This article discusses the following points:
  • What driving profit means?
  •  A simple system to drive profit
  •  Obstacles to driving profit
  •  Strategies to drive profit
  •  Success story
  •  Key benefits of driving profit
What Driving Profit Means?
Driving profit is a proactive process. You can’t control the outcome but you can control the steps. Here is a sequence of steps to drive profit:
  • Decide what profit you want for the next 12 months
  •  Translate this profit goal into business metrics 
  •  Select your marketing strategies 
  •  Select your operational strategies 
  •  Test and measure your strategies and iterate
Deciding how much profit you want within the next 12 months. Are you clear on that? Wait! This is not about realistic growth based on past performance. This is about recognising your business potential for improvement. 

Where can you improve? Chances are you are not maximizing what you currently have. Do you agree with that? No? Well, the first thing that comes to mind is your database of existing and former clients… Are you doing all what you can to engage with them and get business?... Let’s acknowledge that you could do better. 

Having a clear mission is another element that helps deciding how much profit you want. Do you want to dominate your market? Do you want to excel at delighting a certain customer profile? Or are you so experienced with such property type or location that you want to promote it as your differentiator? What are you best at that prompt you to focus on that profile? 
With a clear mission and an understanding of what you can improve, you set your business to deliver a certain value to your market. The profit you want is connected to the value you bring. Your past profit is an indication of the value you brought, in the past. It’s up to you to choose to bring less or more value to your market according to the profit you want.

Yes, market conditions can’t create obstacles to driving profit. Of course, new regulations too. And many external constraints that weight on your business. But you can’t control them, can you? However you are totally free to decide how you will get around these obstacles. And you will put yourself under the pressure to get around, because you have a profit goal that keeps you focus.

Translating your profit goal into business metrics. This step clarifies your strategy and allows you to engage your team. You can use many metrics from financial to marketing to operational. One thing to keep in mind: some of these metrics are milestones to reach while others are key performance indicators (kpi) that helps reaching these milestones. 

Let’s take an example. Suppose your goal is to grow profit by 20% within twelve months. You have decided that you will:
  • go back to your existing client database to get management contracts for new properties; this milestone will contribute to 10% increase in profit
  •  get twenty new clients; that milestone will contribute to the other 10% increase in profit
What level of performance is required from your organisation to deliver on these milestones and achieve your profit goal? This will depend on your strategies and capabilities. You may want to increase the numbers of calls made to existing clients. That’s one kpi. You could also choose to build an email newsletter to send monthly to your existing clients and leads. The number of people opening your email newsletter could be another kpi.

You articulate your business strategy to drive profit with two types of metrics that you’ll keep measuring overtime.

Selecting your marketing strategies. This step is easier when you know what profit you want to make and what milestones you need to cross to get there. But for these strategies to work, a detailed understanding of your clients is required. 

The more information you have, the better you will be at engaging your clients efficiently. With existing clients, it should be easier. You already have so much information, your challenge is to organise it into knowledge that helps you act. With leads, you need to research and study. You will find information by:
  • discussing with your business partners, real estate agents, solicitors, lenders, insurers, contractors
  •  research information online through the digital platforms we mentioned
  •  process information collected from your presence online, notably your website, the blogs you write, LinkedIn profile or Facebook business page used to communicate
To select your marketing strategies you must know if you want to hunt or attract or do both. Do you want to chase leads or do you want to produce lead magnet content? The process to chase leads demands skills different from skills involved in the process of producing highly engaging content. Running these two processes in parallel requires multidisciplinary skills in marketing and sales. This point is discussed later in the article. So what is it going to be for you? What’s your strength? Do you think long term as required in nurturing or do you enjoy the thrill of closing at once? 

Another aspect of choosing your marketing strategies: do you go organic or paid? This holds true for digital and print campaigns. Organic strategies include direct outreach messages that you send on digital platforms such as LinkedIn or letters sent through post. Organic strategies are cheap and used to test one type of client profiles and gather info. One drawback: they take time because you do a lot of tasks manually.

Paid strategies include paid advertisement such as publishing your properties for rent on Zoopla or Facebook ads efficient to target a client profile in a given location (with very detailed set of criteria including individuals habits). Paid strategies help you scale fast. One drawback: paid strategies can easily become expensive, if it costs more than what your clients spend with you. So, it’s advisable to go for paid marketing strategies only when results from organic marketing strategies prove that your audience reacts positively to your offer. Then you can get louder.

In short, use organic to learn and refine your target market and offer, and use paid when you know your target market wants your offer.

Select the operational strategies you will need to achieve your profit goal. Once you know your client profiles, you know their needs and wants and can figure out the service required to delight them. With this information you have the ability to segment your portfolio of clients. What’s the 20% of your clients bringing 80% of the profit? Are these clients of a certain profile, having a certain type of property portfolio, have properties in a certain location? Identify your client portfolio patterns!

By organising your operational efforts by segment you can build economies of scale. Meaning that you can deliver better services at lower costs because you have streamlined the activities that need to take place for that segment of clients.

Another approach in terms of operational strategies is to decide to serve only your ideal client. This implies that you have a clear definition of what ideal client means to you. In all logic, servicing this ideal client should allow you to be at your best. To decipher who is who with your existing portfolio of clients, you want to create a grading system, your ideal client being A grade, rest being B, C or even D grade. 

Your challenge becomes to:
  • Delight your A grade client 
  •  Move B grade client into A grade
  •  Get rid of C and D grade clients
This approach pushes you to customise your services to one type of client of your choice and get rid of all inefficiencies in your systems. It helps structure your marketing and operational initiatives while giving you a differentiated positioning in the market, an opportunity to sell at higher margin and the joy of delighting people you connect best with.

Driving profit means taking control of your business. You will rarely have all the information required to decide on any of the points mentioned here above. However you will have the opportunity to test and measure these strategies, see how they deliver on your profit goal, iterate and progressively shift from a gut feel to fact based arbitrage. 

Let’s look now at a system to drive your profit.
A Simple Way To Drive Your Profit
The system presented in the following paragraphs is simple. But few of us think on these terms at first. In fact, most business people define a business by what they sell. Shifting from a service to a marketing approach helps to realise that a business is defined by the profit it makes

Making a profit is as simple as spending less than what you earn. Now, here is the particular way of thinking: your marketing and sales efforts help you buy clients for less than what they spend with you. 

You can do that in two ways:
  • cut the costs of buying a client
  •  increase the amount of people that spend with you over their lifetime of buying
  •  do both?
This means you have to know two very important variables:
Knowing your client acquisition cost and lifetime value allows you to decide your investment in marketing to buy new clients. Some clients won’t be bring profit in the first two years as their cost of acquisition might exceed the management fee. Still, because the client’s management contract may last a decade or more, it makes sense to acquire him. You just need to watch that your cashflow can absorb the delay in profit recording.

One of the great secrets of running a business is not to make your business profitable. That’s obvious. What is less obvious is to make every client profitable to your business. You can’t underestimate the importance of knowing your numbers for each client.

That’s why you can never drive profit with your accounting statements. If you try to, you are not driving anything, you are complying with law. To drive profit, you need an economic view not an accounting view. An economic view will have the variables mentioned above as premise. It will also look at the 5 drivers to profit.

Economic View - Five drivers to profit

1. Leads
2. Conversion rate
= Customers
3. Average # of transactions per client
4. Average pound per transaction
= Revenues
5. Profit margin
= Profit

Multiply the five drivers together (1x2x3x4x5) to calculate your profit. This structure applies to any business. But how well does it apply to property management?
Driver 1: Leads
These are the people that are interested to know more about what you have to offer on a monthly basis or any period you find relevant. These leads might be interested in your offer but not ready to buy. Within any given market, a rule of thumb is that only 3% of that market will have people interested by your services. Let’s call this your target market. And only 20% of your target market is ready to buy. Having this in mind forces you to select a market with a size that matches the number of clients you wish to acquire. If the market can be broad, your target market should be specific.

Let’s take the example of the residential property market in the UK. A broad market will be to consider the percentage of a city’s dwellings owned by private landlords and rented out. A specific market would be to identify the private landlords with 5 rented properties owned as multi-units purchased with BTL mortgage. As per a study of the Council of Mortgage Lenders, Landlords with one or more BTL mortgage tend to have larger and more valuable portfolios than non-BTL landlords. Given a choice, would you like to have any client or focus on those that have the most valuable portfolios? They might be hard to get, but focussing on their needs and wants you will soon know how to attract them.

To chase leads you need to invest in marketing to these leads. But you don’t need to chase leads to acquire clients. You can market to your existing clients and generate leads. In this case you deal with leads that are directly ready to buy. So you save time and money. You still invest in marketing strategies but they are not the same as the one you use to chase leads. Here your challenge is not to get a total stranger to warm up to your offer and sign, but it’s to convert an existing client into an advocate so that he gets referrals for you.

Last thing about leads, when you chase them, you use either an outbound or inbound marketing strategy as we discussed earlier (referred as hunting or attracting). The former is more direct, and experienced as aggressive, as you directly get in touch with strangers to convince them on the spot you have something they should pay attention to. The later is indirect, as you attract strangers into discussing your offer. 

Outbound strategies may seem straightforward and simple to execute. What does it take to make a phone call to a property owner? But in fact they demand a certain mindset and great sales skills to go through rejection and warm up the leads on the spot. 

Inbound strategies may seem tedious as they require time to build content that will act as magnet and bring warm leads.

The very big difference between the two is the level of rejection you need to put up with. With inbound marketing strategies you talk to your leads when they decide they want to talk to you. You can still face rejection when you attempt to convert the leads into clients. But at least you learn so much in the process that you can quickly improve at converting. 

With outbound marketing you need to make rejection a habit. One way to turn this around is to understand the law of numbers and focus on counting, that is to accept the rejection as normal and motivate yourself contacting a very large number of potential leads so as to ensure you will get a quasi certain number of warm leads that can be converted.
Driver 2: Conversion rate
This is the number of leads you convert into clients over the total leads generated by your business on a monthly basis or any time period you want your financials to be achieved.
Driver 3. Average number of transactions per client
This covers the “repeat” business as well as one-off. Taking the example mentioned above, the management contract is repeat business month on month and year on year. But consultancy work is not. Considering the month as the period of reporting, you have 12 transactions for property management and as many transactions as the times your client instructed you for specific services such as consultancy project for example.

Looking at your numbers on a monthly basis is more interesting than looking at them on a yearly basis. First your new clients may join you or existing clients may leave you during the year. So you want to know how many transactions each accounted for. On a yearly basis you would not see any difference between a new and old clients they would have just one transaction accounting for the property contract. Second, a monthly basis helps you managing your cash flow.
Driver 4: Average pounds per transaction 
This accounts for all revenues you perceive divided by the number of transactions you cover in the period considered. Let’s assume you mainly managed single-family rental property and that your management fee is 10% of the monthly rental value of the property. 

You need to add the extra fees you eventually collect to take into account the total management fees. You will also add all other services you offer your clients related to the property value maximisation and / or outside of its strict management (for example: consultancy, property valuation, insurance, risk assessment…).
Driver 5: Profit margin (%)
This covers all the costs incurred to operate your business over the total revenues accounted for during the period.
Do you want to be ahead of 90% of your competition? 

Drive your profit through this economic approach. Identify the strategies you can use to move each driver. Test and measure these strategies and understand which ones fit best to your situation. Implement the strategies that work best but make sure to know why some strategies do not work. This situation might be temporary and circumstances may call for a change of assumption next year.

Now before we look at the obstacles of driving profit in your business in this way, let’s just crystalise on it’s multiplier effect. 
The Multiplier Effect 
When you take action on each of the five drivers, the results don’t just add up. They multiply.

You’d say it’s obvious since I mentioned that you multiply the five drivers to calculate profit. Ok. But the multiplier effect always come as a surprise because our brain can’t compute it straightforwardly. 

Let’s take an example of a property management company named Green Paradise Ltd. It’s owner is 100% dedicated to residential properties and has built a portfolio of 216 clients accounting for 348 units

The portfolio breakdown is simple:
  • 120 clients with only one property i.e. 120 units (single family housing in London)
  •  60 clients with two properties i.e. 120 units (high rise building flats in London)
  •  36 clients with three properties i.e. 108 units (expensive flats in central London)
Green Paradise takes care of 216 clients and manages 348 units per month. The average monthly rental all properties is £2,000/month and management fees accounts for 10% of this ie. £200/month. The total revenue made by Green Paradise from management fees in a year is £835,200. The company earns additional revenues from consultancy and other services accounting for £167,040 per year and delivered to 25 clients out of the 216 in portfolio (average project or contract value around £6,700). The total revenue is therefore around £1,000,000 per year. Additional revenues account for 20% of the total.

When the owner of Green Paradise decided to calculate the average pound per transaction, he first looked at the number of transactions covered by management fees: 348 units * 12 month = 4 176 transactions. He then looked at his additional revenues and added the 25 contracts each accounting for one transaction. Green Paradise manages 4,201 transactions per year for a total revenue of a little more than £1,000,000 i.e. an average £239 per transaction. He also calculated the number of transactions per client: 4,201 transactions / 216 clients i.e. average 19,4 transactions per client in a year or 1.6 transactions per client per month. This number would be 1 per month if all property owners had one property only and none of them bought additional services.

Recently Green Paradise Ltd owner decided to invest in marketing and the company is now generating an average of 15 leads per month and converting 3 of them into clients. 

The owner of Green Paradise Ltd is determined to improve his profit margin currently around 15% with high value added services. On a monthly basis, the company generates around £85,000 in revenues and around £13,000 in profit.
In scenario 1, each of the five drivers is increased by 10%. This results in an increase in profit per month of +£4,300 i.e. 33%. That’s a first example of the multiplier effect.

In scenario 2, each of the five drivers is increased by 20%. This results in an increase in profit per month of +£9,400 i.e. 74%. That’s a second example of the multiplier effect.

Making below £10,000 additional profit per month may sound a small step to a company’s growth ambition. Wait! Let’s look at the picture on a yearly basis…The multiplier effect is more striking.
“Be Not Afraid Of Growing Slowly, Be Afraid Only Of Standing Still.” 
Chinese proverb
In the current year, Green Paradise generates 180 leads and acquire 36 new clients per year. The company manages 252 clients in total and generate £1,169,280 in revenue. It’s average pound per transaction is not impacted by the change of time period. It’s number of transactions per client is. 

When the owner manages to drive 20% increase in each of the five profit drivers, his business grow significantly:
  • 53% increase in revenue i.e. +£620,000
  •  84% increase in profit i.e. +£147,000
A key message here is that improvements on each driver on monthly basis translate in significant increase in yearly profit. In scenario 2, Green Paradise only acquires 16 additional new clients but increases its revenue by more than £600,000. 

Given the number of business transactions in property management, an improvement of the average pound per transaction and number of transactions per client - not only on new ones but on all clients in portfolio - has a significant impact on the company’s revenue and profit. 

So the question becomes, what does it take to improve each driver by 20%? A suggested list of strategies to create this increase and more, is presented later in the article.

Right now let’s look at the obstacles that prevent you from driving your profit in this way. 
5 Obstacles To Driving Profit With An Economic View
  • You don’t know your numbers
  •  You don’t invest in generating leads
  •  You don’t know how to get leads on demand
  •  You don’t see how you can modify your conversion rate
  •  You don’t know how to sell additional services 
  •  You can’t predict additional revenues
  •  You don’t believe you can significantly reduce your costs
If several of these obstacles apply to you, there are chances that you have given up growing your business. You simply don’t have the visibility you need to impulse change and make more money. Another situation might be that you are investing in your business but don’t get the results you want.

What can you do then? If you don’t have the numbers, approximate them with the data you have. If you don’t invest in generating leads, ask yourself if you really want to grow. If the answer is yes, test the strategies listed later in this article to learn about marketing your services and experiment with your first leads, until you understand what your market wants and you communicate your offer accordingly.

Who are these property owners that want property management services in that given area? What are their expectations? Are they looking at basic management services for the cheapest price or would they been open to a partnership based on value creation? What’s their idea of maintenance? How comfortable are they on cash? Are they active investors who could bring more properties if you deliver awesome service? What would delight them the most? How specific are they with speed? Do they live in the UK all the time or do they travel?... What about property occupiers? This might take months but won’t take years.

It’s the same with your conversion rate. Ask yourself what client acquisition system you use, even informally, and how can it be improved. Do you attract quality leads? Do you have an offer that resonates with them? What are their objections? Are you sure they are objecting on prices… Have you done a good job at educating your lead on value? Do you use a script to bring them to closure efficiently? Build with what you have: go back to your existing clients and ask them what they found in your offer, use your existing experience and data to craft your interactions with leads.

If you believe there is nothing you can squeeze out of your costs, essentially staff and office rent, think again. Do you need full time staff? Do you need all your staff in office five days a week? Do you have systems in place for your staff to work from outside the office? Can you outsource some administrative tasks? Can you pay business developer on commissions? Can you share expenses with your business partners? Can you streamline your interventions per location or work with partners that are closer to the location? Can you negotiate your agreement with your preferred contractors? Can you modify your payment terms? Can you organise your time and improve team’s productivity?

There is so much you can do to remove obstacles to your business. It is the same mindset as removing obstacles for your clients to make it easy for them. That’s what business is all about. You don’t necessarily know the outcome of these initiatives but you ought to make it easy for yourself. Gain clarity by removing the clutter. 

This process will give you all the business intelligence you need to drive your profit and get to your profit goal.
5 Strategies For Each Profit Driver
Here is a list of five suggested strategies for each profit driver. There are hundreds of strategies available out there. This selection of five is supposed to suit to property management specifics.

You are free to choose. You can focus on one driver and test the five strategies. Often this process takes several weeks but should not take more than two months. By then the testing and measuring has allowed you to identify what works best and is appropriate to implement. Within two years you will master the tasks and skill sets these strategies require. 

Your organisation’s performance will improve in:
  • marketing as you learn to master lead generation
  •  sales as you learn to master your conversion rate
  •  pricing as you learn to revamp your offer according to your specific clients requirements
  •  service offering as you learn to upsell high value services 
  •  cost cutting as you learn the discipline of generating economies of scale in your business
You can act on all five drivers with one or two strategies for each. Your choice of focussing on one driver or being active in all five will be shaped by your business goals and overall strategy. And your cash flow position and capacity to take risks. 

Bear in mind that what works one year might not work as well the next year. The situation of your clients keeps evolving and so is your business context. Nothing stands still. You need to be ready to shift gear, test new strategies, adapt.

This implies three things: 
  • regularly ask yourself whether you are doing the right thing with the right driver
  •  never go “all in” on one strategy on the premise it has worked last year
  •  track what you are doing
For example, you might see your conversion rate falling to an unhealthy percentage proving that the newly recruited sales person is not performing well. Your strategy of recruiting him to boost sale is not generating the results expected. But that does not help you much to understand what is going on and decide your next steps. 

You need performance indicators that help you answer questions such as:
  • How many times did the new sales person performed his sales script on a lead? 
  •  Did he use a sales script or tried to be spontaneous? 
  •  How much time does he spend on a call? How many times does he record his calls and review them?
With these indicators in hand, the performance of the new sales person can be improved and your strategy of investing on a new sales staff might finally yield results.

Back to each driver and the five strategies you could consider to improve your business in each.
Driver 1: Leads
  • Article writing: position yourself as an expert in one specific activity within property management
  •  Newsletter: engage your existing clients, attract news leads, nurture a community and show your value
  •  Networking: be visible and connect with your existing clients as well as their friends. Create opportunity for networking by organising breakfast or evening events
  •  Strategic alliances: leverage your portfolio of “repeat” clients by negotiating referral programs and other strategic initiatives that are win/win for your business partner and yourself
  •  Referral systems: build a referral based business and commit to delighting your clients, converting them into advocates, while incentivising them to give you referrals.
Driver 2: Conversion rate
  • Define your own uniqueness: communicate clearly who you want to work with, what you are best at, why you are into property management, what’s your mission.
  •  Sales script: structure your sales calls with your prospects, build momentum in the call, pace the call, record the call and study the call until you get the perfect sales script for the type of audience you are after.
  •  Email drip: nurture client relationships by educating them progressively. Educate by delivering value. Impart knowledge and expertise in a crisp and useful way. 
  •  Educate on value not price: educate your clients on the value of the services you bring, make sure they perceive it with their own eyes. For example through a newsletter. There are many ways to create value.Set the rules of the game for your clients, especially on what they can expect or can not expect from you, otherwise they will set them for you.
  •  Upsell your services: make sure your clients know about each service you offer. Be close to your clients’ reality to figure out the additional services they could benefit from. Consider both property owners and occupiers as clients. Occupiers have needs to quickly integrate their new location, eventually get it refurbished, minimize energy consumption, and enjoy living in a well maintained property. What can you do to facilitate their integration?
Driver 3: Number of transactions per client
  • Deliver better service: this is critical if you are looking at manufacturing client referrals and build a business that grows itself. What could you improve in your customer service within the next three months? Consider the following areas: transparency, maintenance costs, complaint solving process, access to effective redress, spending efficiency for punctual works in properties.
  •  Deliver better service: this is critical if you are looking at manufacturing client referrals and build a business that grows itself. What could you improve in your customer service within the next three months? Consider the following areas: transparency, maintenance costs, complaint solving process, access to effective redress, spending efficiency for punctual works in properties.
  •  Keep in regular contact: use social media, provide a newsletter, have calling campaigns to promote events or initiatives you are associated to. Use property visits to meet with the occupier rather than scheduling it when he / she is not in. Hand over something of value while meeting them. It could be a newsletter or an invitation to an event or a gift they won from the property quizz you runed online.
  •  Socialise with clients: use social media, but create opportunities for informal gathering, through events or party to celebrate new clients or new contract for your business. Use the newsletter to engage your audience and understand what they are up to.
  •  Email campaigns: efficient to educate your existing clients as well as former clients and leads who never signed up. Educate by providing great content, solutions to their eventual problem, news about the location they cover, insight on upcoming trends, or new regulations.
  •  Keep good data on clients: be disciplined with your client data. Make sure you keep it up to date. Consolidate or cross check all information that you have across different software you use. Segment your clients and structure your data collection according to that segmentation.
Driver 4: Average £ per transaction
  • Use a questionnaire: seize up your prospects, or your existing clients interested in giving you more business. List down the critical questions you must ask. Make sure these questions capture details of the problem they face and its impact on their current situation. All information will be useful to close the sales call or to eventually drop a prospect who is not matching your client profile criteria.
  •  Customer incentives for buying other services: make it simple and easy to sollicitate additional services from you by removing any obstacle. Create a great deal for them they can’t say no to. They will feel valued as existing clients, and right about having a better deal. Use time pressure for this deal to clearly appear as an opportunity to be seized now, not something that can be considered as granted.
  •  Create a quality image: survey your existing clients and ask them about what quality means to them. At your end define your standards of quality as a business, given your situation and your staff capabilities. See the gap and cover it. You don’t necessarily need to cover it all in one go. But you can communicate to your clients that you have identified three major quality gaps and you will tackle them one at a time over several months. Survey your existing clients again after a reasonable period of time where you could implement changes.
  •  Only service “A” grade customers: grading your customers is about defining three to four situations with your clients and ranking them in order. It’s a bit like designing the ideal experiences you want to have with the 20% of clients that bring 80% of the value to your business. That defines A grade clients. Some of your clients are not yet there but they can become A grade. Others can’t. You can choose to convert B grade into A grade to maximise your existing client portfolio and drop the C and D grade that hurt your profit or your time management.
  •  Set an average value sale goal: being clear on your average £ per sale makes you in control of your profit. You may not be able to upsell straightaway with new clients, but you should with existing ones. Your average value sale goal will depend on your clients situation.
Driver 5: Profit margin
  • Measure everything: become a master of metrics, at first you will create many to realise that you keep going back to only few. Defining where your business stands in five metrics brings clarity, satisfaction and speed in your decision making process.
  •  Sack “C” and “D” grade clients: who said you had to carry them forever? Just because they pay you the management fees? But what’s the point if they take away your time, your team’s energy, and keep criticising your interventions? It’s ok to have made the mistakes to take them on board. Don’t make the mistake to keep them.
  •  Provide team training: you want to transfer knowledge to your team. It takes time to formalise this knowledge, like every preparatory work, but who is going to manage the systems you are putting in place? Indeed investing in marketing and building the systems but not investing in the teams that will manage them is nonsense. If you are not closing the loop, it won’t bring you the leverage you are looking for. You will remain indispensable for everything, having no time for the main thing.
  •  Improve time management: this is a big topic for property managers. Time inefficiencies are legion in this business. There is so much time lost because time was not invested properly at the beginning. Time is a very sensitive topic for both property occupiers and owners when it comes to maintenance. Quality time spent with clients vs. time troubleshooting issues is another. You need to manage time as you manage money. Building relationships can be thought as building credit and debit accounts. Your wins with clients go to the credit of the relationship. Your management fee goes to the debit of the relationship. You certainly want to avoid to over debit, as your relationship will suffer. So you need to constantly credit the relationship through marketing initiatives.
  •  Work costs as % of sales: look at your costs from another perspective. What portion of what clients pay you is required to cover your expenses? You want this percentage to be as low as possible. For that what are you going to do? Do you need more clients? Don’t forget that comes at a cost. Are you charging enough for what you are delivering? Or are you running high on costs because of inefficiencies? 
Some strategies listed here-above might seem obvious. But it’s not that straightforward. The success of a business often lies in carefully choosing the strategies that best fit its abilities and in organising these strategies into a system that prints money. 

All these strategies are common sense but their implementation requires hard work. To be successful each of these strategies require deep thinking about your clients, your positioning, your business growth, your business systems and your team. In other words, they require time off the routine, and on the business. Something that business owners always have difficulty to find.

How do you block time to think on your business when you deal with what’s happening in the business on daily basis? Even if you succeed at blocking time, how do you go about structuring deep work on your strategies when you don’t know where and how to start? More than that, how will you know how to implement it? What about the blind spots that have always prevented you to work like this and get results, how do you get rid of them?

Some business owners succeed in switching from an operational role to a strategic role when required with loads of practice. They are ready to put the time in, to fail at it, learn from it and build their expertise this way.

Some just don’t think it’s the best use of their time. They want results within the next twelve months. They know they need support. They ask for help. 
Success Story
Here is the story of Steve Rosenberg who has exploded his company’s growth, Empire Industries, through laser focused marketing to become the fastest growing property management and realty company in Houston, Texas. He successfully built a portfolio of 500 properties under management in 3,5 years. His company won the Best Marketing In North America award in 2015.

In the short video and notes of his intervention at the US Property Management Growth Summit 2017 (see link hereunder), he explains how he did it in 5 points:
  • shifting his mindset to realise that everyone is into marketing and sales
  •  focussing on knowing his audience very well
  •  leveraging referrals as a most efficient way to acquire clients
  •  positioning himself as an expert in his field 
  •  putting in place performance indicators
Key Benefits Of Driving Profit
The benefits of driving profit is a mindset change in how you take business decision. It might be fastidious to collect the data mentioned, have the discipline to track profit with five drivers on monthly basis and systematically test and measure each strategy you try on a given sample of clients prior to deploying it to all your clients.

It’s a lot of work upfront. That’s partly why business owners don’t do it. It’s the same thing for formalising business activities into systems, it takes hard work to formalise what they intuitively know. But it’s the only way to make it transferable to the team. And it certainly is the best way to be in control of what you are doing.

As per CMA’s market study into residential property management, everyone agrees that property management industry needs to improve on quality of services, appropriate spending, relationships with landlords and occupiers and access to effective redress just to name a few connected to block management and lease holding.

But a deeper change needs to occur in the mindset of property managers, in their habits. Property management is one of these industries where it is still possible to get away with status quo. This is in fact an opportunity for those who know things need to change and are ready to get on with it. 

As shown in the five drivers to drive profit, small monthly changes can do wonder in a year. These changes have even more impact in a slow moving industry, on the verge of a transformation.

Isabelle Leclaire

Isabelle helps property management businesses grow by delivering better customer service and manufacturing client referrals. She is a business growth specialist who believes customer service is great leverage for predictable growth in people-intensive industries. If you're stuck with inefficient systems and disengaged clients, reach out and book a free strategy session today.
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