Does this make sense to you? Last week I was in discussions with a respected sales agency. This agency had a huge sales business with 12 or so sales consultants during the peak of the region’s boom. They now only have the directors, three of them, working as sales consultants.
Due to the huge decline in the property sales market they decided to focus their attention on their property management business. They recognized that this side of the business provided constant cash flow and kept their doors open during the shrinking sales market. It also helped to stabilize their dwindling cash reserves.
In recognizing the need to manage their property management operations they assigned one of the directors to focus his attention 100% on property management. All good and logical thinking.
They planned their strategies for business stabilization and growth during the declining sales market. The business owners decided that buying a rent roll would be part of their strategy in growth and increasing market share. So far, so good. Good planning with purpose, logic, and strategy.
They were satisfied with the purchase of the rent roll. However, moving forward, here is where they start dropping the ball. The director is sick of property management – he wants to go back to selling. He cannot work out that listing managements is in fact the same as listing properties for sale, it requires the same skills. Does he not recognize the fact that managing a property generates immediate cash flow and long term wealth creation? Does he not realize that by having a solid property management business with a respected reputation he will generate sales? Apparently not.
The director was complaining about the fact that a property owner he knew listed their property for sale with another agency. What is absurd about this is that the property is managed through his agency and he has built a relationship with this property owner over a period of six years. In disbelief he called the property owner and asked him why he listed with another agency. The property owner told the director that he had no problem at all with him but he had major problems with his property management business.
Wow, there you have it, straight from the property owner’s mouth. Wouldn’t you as a business owner jump on this and get your property management business sorted. Well here’s where I was completely floored. I asked him how much the commission would have been if he sold the property. The commission would be in the vicinity of $15,000. Ouch, that’s a lot of money left on the table (especially in tight markets)! A declaration that would make you take action. Apparently not in this instance. He doesn’t want to believe that other clients may feel the same way and believes that this is a one off instance. At first he was seething that he had lost an “in the bag” sale due to the incompetency of his property management team. By the end of the meeting and once he started realizing that his property management services are a result of his and the other directors lack of direction and support, he started blaming the property owner for being disloyal and now believed that this loss of listing was a “one only”. Needless to say, I was quite shocked at how he had turned the whole situation around and now there was no blame at all on the agency.
Now here is the toe curler. The director then said to me that he had been noticing that a lot of agencies are rebranding their property management business so that it appears to be a different from their sales business. He was considering doing this. He believes this will protect the reputation of the agency’s sales business. You can see why I was shocked at the absurdity of his thinking. Does he really believe that consumers are that naive? Apparently he does.
He asked for my opinion on this. Needless to say, I don’t have to say here on this blog what my opinion is on rebranding your property management business just so consumers can be tricked into believing it is a completely separate entity to the sales business. Even though I do have an opinion on rebranding your property management company, it is certainly not for the reason of hood winking consumers. That is, in my opinion, displaying total disrespect to your consumers and makes no business sense at all. I would much prefer to take the positives from this and understand that as a business owner I’ve now been given feedback that I can take positive action on and turn my business around by creating ways to win back customer loyalty.
Rebrand or improve your business – what would you do?Read more on Marketing