Hiring a salesperson for your property management company is an important step if you’re serious about growing your business. Here are four reasons why:
A Well-Trained Salesperson is an Asset on Your Balance Sheet
A well-trained salesperson is an asset on your balance sheet. As a salesperson’s salary is normally commission based, they bring in a lot more than they take out, so the position scales really well. As long as you set realistic but profitable goals, the salesperson is not a cost center, but rather a profit center.
A Well-Trained Salesperson Enhances Your Customer Experience
Customer experience starts with the first phone call to your company. Put yourself in a prospect’s shoes. If a prospect has a problem with a tenant, they may call your property management company for help in figuring out how to deal with the problem – and maybe to hire a professional. That caller may reach a receptionist who doesn’t have time for them and they’re on hold forever. They might reach someone from the accounting department who answers the phone and doesn’t know what to do. Even if they reach you, the owner, you probably have so many things on your mind, you’re not focused on the sale, or have time to follow-up. Your company risks losing that prospect for your business. Your chances of success are much better when a dedicated salesperson is there to answer the phone. They can qualify the prospect, understand their problems, offer your company as the solution, and close the deal. And they’re more likely to be available, because that’s their entire job.
A Well-Trained Salesperson Allows You to Concentrate on Business Building
Having a professional salesperson on your team allows you to focus on your own leadership role within the company. When you know the sales function is taken care of, you can focus on building your team and your company. You’ll have extra time to develop your employees and refine your company culture. You can examine current systems and put efficiencies into place, research new vendors, products, and methods, and figure out how to market your business – all while the sales end is being managed professionally.
A Well-Trained Salesperson Can Close More Leads
Once you have reached the point that you’re managing 120 to 150 units, depending on where you are based, Sales tends to take on a life of its own. Even if you’re not actively working on it, you’re going to get some referral business coming in and start to get some website traction.
A salesperson can close 10 new contracts a month, maybe more, depending on your market. Your goals for the position and its success rate depend on the marketing spend for your property management business, and what you can currently close. But whatever your numbers, a professional salesperson should be able to double your current close rate. Why is that?
Think about all of your past leads that haven’t been talked to recently. They just sit there potentially ready to work with you, but someone needs to follow-up with those leads to grow your business. If you wear many hats, you may have only followed up once or twice, while a salesperson can step in and follow up many more times. Your salesperson knows how to get as much as possible out of your marketing spend and bring dollars into your organization so it can continue to grow.
Hopefully, this has helped you understand the importance of adding a professional salesperson to your team. If you have any questions about the sales process, contact us at Fourandhalf, and we’d be happy to help you.
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With 212 units and an average rent rate per unit of $704 a month, I am not seeing how hiring a someone to do sales is economically feasible. Our managed portfolio is about half single family homes and the remainder are apartment properties not large enough to require on site management.
There are two really companies that are in our market area with portfolios larger than 500 units that are working with properties that are not large enough to do on site management and neither of them has a full time sales person to work new accounts. Each of those companies has been in business for decades to build up to where they are.
There is an effort involved to work new accounts, they do not get rented, maintained or managed on their own, the profit margin on the business is a bit thin.
What average rent rate per month per unit were you going by to come up with these recommendations?
Hi Robert, to answer this question we have to review Unit Economics.
Here is how to work this through:
1. What is your average monthly commission? Multiply that number by 12 and you get your Annual Contract Value = ACV
2. A full time Sales Person is capable of closing 10+ accounts/month. Multiply number of new accounts a sales person is projected to bring in, times your ACV, which will equal the ACV revenue a sales person will bring in.
3. Come up with a base/commission plan to pay your Sales Person based on performance that roughly equals half of your At Goal ACV Revenue.
Example: If your average ACV is $1000, then 10 new accounts per month will bring your company $10,000 in Annual Contract Revenue. If you pay the Sales Person $5000 (base + commissions) you are ahead by $5000.
I hope this makes sense. The most common industry misconception is to count their new accounts in Monthly Fee + Lease-up revenue and not in terms of Annual Contract Value. Another aspect is Lifetime Customer Value. The lifetime value of each new account could be in the $4000s for you. The upfront cost to bring the account in will be justified overtime.
Of course the key factor here is to make sure your Sales Person is at goal, otherwise, the Economics do not work.