When it comes to property management, there’s often a client misconception that all agencies are the same. And that inevitably leads to the dreaded conversation about fees.
So, how can you clearly define your point of difference, highlight the value that you offer, and shift the conversation from fees to the value you provide?
With more than 30 years experience in the field, Jo Oliveri has coached business leaders and property managers both here and in the US.
In these video highlights from the Elevate podcast Jo explains how to grow your PM department, navigate the fee conversation, and create results that demonstrate value.
A mad dash back from the US
When Jo was on the Elevate podcast she said it had been a busy two years. She’d left the US on the last plane out of the country as the pandemic struck.
Hunkered down in Brisbane she worked on some technology, a workflow program, for the property management industry.
Jo has been coming and going from the US for a number of years.
When she first started in property management she needed a deeper understanding of the industry in order to be part of the change she believed was necessary.
When she and her family were sent to Papua New Guinea she used the time to learn more about the industry.
Next, they were posted to New Zealand, where Jo worked in sales.
As part of that role, she had to do a paper at the Open Polytechnic and chose the topic of global real estate.
“So, this was before the internet and all of that. And I talked about people being able to just shop real estate online. And that kind of opened up my mind to the possibilities of can I actually become a global agent?”
Not long after that, she discovered a course she could do to attain a certificate as an international property specialist.
“Through that, I started to network with a lot of agents from around the world and the more I went to the US, the more I could see there’s these amazing opportunities and it just grew into me travelling there probably every six weeks, to the point where I’ve been moved there and, and just loved it,” Jo says.
The differences between the US and Australia
Jo says one of the biggest differences between the Australian real estate market and the US is that a lot of American sales agents do their own property management.
“But property management to them is more like collecting the rent on the owner’s behalf so that they can save them fees in management and bypass a trust account. So, it’s not done very well, and tenants fail to report maintenance,” Jo notes.
In Australia, the industry is more regulated, but Jo notes it’s in a “succinct manner”.
“In the US they’ve got a lot of legislation that actually creates a lot of fear amongst agents,” she says.
Jo continues, many US agents see the legislation as something that could bring them ‘undone’.
“So, if you remove the fear from legislation, then you’ll be able to build a great service and one that is not risk-free. There’s always risk in business, but you can mitigate that risk,” she says.
A place for everyone
In Australia and elsewhere there have been new entrants to the property management model.
Jo says there’s a place for everyone. Some consumers focus on the cheapest fees, while others will spend more for add-ons and greater service.
Jo also explains it’s a bit like a grocery store. We all have brands we love, with baked beans a great example.
“How many brands of baked beans are there? But most of us will go for the Heinz baked beans, which is the most expensive, but we know we can rely on its consistency and good taste,” Jo says.
Where property management businesses should be focusing now
If Jo were starting a property management business right now, she’d focus on ‘why’.
“And I always say, if you don’t know your why, then you’ll never discover what your ‘how’ is. So, if you know your why, how are we actually going to create this business and make sure that whatever we do is sustainable, because one of the biggest challenges we have in property management is growth. And that’s not new growth, it’s retention of business.”
Jo says a lot of businesses start with the philosophy of ‘let’s get going’, which is a desperate start, rather than a deliberate one.
Instead, it’s important that businesses should be hyper-intentional about what they do.
What agencies can learn from the big brands
Jo spent time training at the Disney Institute, and notes there are lots of takeaways that translate to real estate.
“One of the biggest things at Disney is the processes that they have, everything is process-driven. Nothing happens without a process, and they never break that process.”
Jo says Disney was excellent at setting people’s expectations, even if that expectation was that it would be costly and they would need to line up for some rides, knowing that Disney was all about safety.
In real estate however, people expect things to be done immediately, and complain if that’s not the case.
“So, to me it was about setting expectations for the clients, and I think that’s one of the biggest lessons I took from Disney apart from the processes.”
How to set expectations
Jo says one of the first expectations property management businesses should set is that you cannot get back to clients immediately.
A property manager’s job is out of the office, she reflects, and if they are in the office all the time, they are not doing their job effectively.
When they are out of the office, they should not be taking calls or handling emails, because these calls and emails need to be logged in the CRM so they can follow them up.
Jo says to manage that, clients should be given a time when they will be responded to.
“By clients understanding that and knowing that they’ll be given a time when they’ll be responded to, clients will meet those expectations.”
What’s the right property management model?
Asked how she would set up her own property management today, Jo says her favourite model is the portfolio style, where someone is directly responsible to the client.
But she notes in order for that portfolio to scale so the business can grow, there needs to be an assistant learning everything.
“So, it becomes a pod for a little while. And when that person has learned everything about the culture of the business, the policy, the process, the protocol, the practises, all of those things, then that team member is ready to have their own portfolio.
“That portfolio that grew into a pod is now ready to be split back into a portfolio, and I think that’s where a lot of companies go wrong.”
What real estate can learn from McDonald’s
In addition to studying Disney and how it can influence property management practice, Jo has also written about the lessons the industry can learn from McDonald’s.
IT doesn’t matter where you are in the world, you expect the same food and service each time.
McDonald’s has also been very good at bringing in teenagers with no previous experience to work in their restaurants.
“They’ve proven that you can train a 14-year-old and that 14-year-old represents everything that the brand says it is,” she says.
Jo also notes McDonald’s is very strict on its processes and procedures, with every single burger built the same way.
“It is always consistent and that’s what people rely on; consistency. If we have that in property management, that’s what clients come to rely on, and it becomes a safety barrier for them,” she says.
Handling the fee conversation
Jo says part of the reason so many potential clients ask about fees is because they view all property managers as the same.
“But that’s our opportunity to actually shine and ask the client something different when they ask, ‘what are your fees?’,” she says
Jo says it’s important to remember that all property owners are not, necessarily investors, and presenting that argument can help them understand not all PMs are identical.
“What I like to say is ‘I’m the how to your why? So, what is your why?’.”
Jo also says if the property manager doesn’t understand their value, they can’t share and promote it.
As part of the training that Jo does with property managers and BDMs, she has them ring their competitors and ask the typical questions an owner would, including the question about fees to see what the response is.
Often, the competitor sounds apologetic for the fees they charge.
“So, the clients are not seeing something different. I say, ‘share your difference’. Share, shine and show. And when you share, shine and show, then clients will warm to that and understand you are different,” Jo says.
Finding the point of difference
Jo explains the real point of difference needs to come from the company a property manager works for.
That means the point of difference often comes back to the business owner who needs to find it.
You don’t want everyone
Jo says it’s also important to appreciate you are not going to be attractive to every potential client out there, and you shouldn’t want to be.
“You don’t want everyone. You want the ones who are going to help your brand to shine as much as you help them to achieve the results that they’re hoping for in property management.
Jo notes there’s a lot to learn from other industries such as airlines, hotels, Uber and restaurants, where there is competition, but it’s not all about being the cheapest.
Instead, it’s about really understanding what they are delivering for their clients.
“Once you know that, then your team can articulate that and represent what that brand is all about,” Jo says.