Note: The names in the video are swapped. The first guest shown is Tommy Chambers and the second is Chris Harold.
We welcome you back to the Property Management Show with your hosts, Marie Tepman and Brittany Stephens.
In Part 1 of our conversation with Chris and Tommy of Chambers Theory, we talked about how they used data and innovation to expand their customer lifetime value amidst area-specific market forces that tend to shorten it.
Here, in Part 2, we’ll cover how they balance profits, people, and the customer experience.
Retaining Property Management Employees
A happy property management team will almost always lead to a happy set of property management clients.
How is employee retention encouraged at Chambers Theory?
In a number of ways.
- First, there’s a new role: Director of People and Culture. That role really sprung from fast growth. In four years, they grew to 30 employees and while every employee is moving in a different direction, helping the company succeed is the end goal.
- There’s also a focus on work/life balance. The team is friends outside of work. Many of them have been together for 15 years. When you’re working with fellow humans and not just working in a company, it’s easier to focus on what you do together.
- Committing to a capacity-to-care ratio.
- 8Profit sharing so that a portion of the company’s profits are dispersed among the entire team. Everyone benefits from company growth.
There’s a timeline for reviews with the team where each employee gets to discuss their own plans for career advancement. Tommy and Chris have also borrowed a measure from Navy SEAL Team 6, which is focused on two things: performance and trust. You want high performers who you can really trust. And sometimes, if a particular team member isn’t performing well, they’re worth keeping close because you know you can trust them and their peers can trust them.
The capacity-to-care ratio began as a look at how many properties per person made sense to keep the team functioning as well as they wanted. Companies that have problems with quality seem to have a higher property per team member ratio. A 100:1 ratio makes it hard for those team members to care about the 100 properties they have to manage.
It doesn’t matter how good you are, if you’re too burdened, you’re losing your capacity to care.
To increase that capacity to care, the ratio has to be lower, and/or more infrastructure is needed to support the team.
Each team member at Chambers Theory is specialized in what they do. And, more experienced hires have more capacity. So, increasing capacity has become a key metric.
Right now, the company is at 24 properties per staff member. They’re investing heavily in the staff ratio, but expect to grow to 30 properties per staff member before too long. They’re skeptical of going any higher than 35 to 1. Even if the team seems capable, they’ll want to hire enough people that the ratio stays closer to 30 properties per staff member.
How to Stay Profitable While Focused on Capacity-to-Care
How do you balance taking care of your team with making money?
Profitability is more likely – even if it’s tighter – when you have better quality of service and higher average rents and lower vacancy rates.
Hire so that you’re prepared for growth and not waiting for it.
And, remember that employee retention increases profitability over time.
Your employees, when they have the capacity to care, will continue to improve their service and be more efficient. You’re not spending money on hiring and training new team members when you have great retention.
Referrals as a Source of Growth
When new business is continually coming in the door and current clients are easily retained, there’s little to worry about in terms of profitability. Chambers Theory has a stream of referral business that comes in because most of their clients are Foreign Service and military clients. They have a presence in the community and throughout the Washington, D.C. area.
They like to say that all of their clients become friends and all of their friends become clients. Developing relationships is a huge part of their business model and their plans for growth. They know their capacity to care is higher and that turns into a powerful referral machine. Clients are served well, so it’s easy for them to earn new business based on their reputation.
After four years in the property management business, they have around 700 single-family homes they’re managing in northern Virginia. There’s also a small portfolio of properties in Oregon that make up about 80 doors.
They see the sales market softening eventually and a lot of accidental landlords looking for help when they cannot sell their homes.
Protecting Reputation and Asking for Reviews
It’s amazing what happens when you ask for a review.
Their team has focused on building relationships, so quickly solving problems when someone is unhappy is almost intuitive. On the other side, when they have done a good job, they’re quick to ask their clients to please put a positive review out there.
People love helping other people. Customer service culture is not just about what you do for your clients. It’s giving them an opportunity to do something for you. They want to help, and you have to accept their willingness to help by sharing a good review.
Reviews are about emotional intelligence and paying attention to communication. Can you pick up on cues of dissatisfaction? Do you know when a client is satisfied?
When you lead with gratitude, you get a good response.
Emotional intelligence prioritizes personal emails over automated emails, for example. Instead of sending an automated email to ask for a review, a dedicated team member writes a personal message that’s gratitude-based.
Growth isn’t without pain, and sometimes you have to decide what you want to sacrifice. Tommy and Chris weren’t willing to sacrifice their services in order to make more money.
Are they profitable? Yes.
Could they be more profitable? Also, yes.
Yet, they were not willing to stretch their team members too thin in order to be more profitable.
As they continue to grow, they’re also looking at automation.
Some things are automated, but never the actual relationships they have with their clients. They could have an automated repairs department, and they could send out an automated email asking for a review every time a problem is solved.
But, they don’t.
There’s only so much that can be automated before that personal relationship and level of service is lost.
There’s a team at Chambers Theory that’s only responsible for calls. They’re trained to use their emotional intelligence to respond to calls and get back to people quickly. Even if the solution is not immediately available, their clients know they’re being heard.
This is Trust Equity.
Imagine you’re going on a long trip and you start with a full gas tank. Every mile of the trip, you’re depleting what’s in your tank. Think about that tank as your relationship with your clients. How far will you go with clients if you don’t fill up the tank?
Automation versus Personal Touch
Everyone has shifted to automation. And while the team at Chambers Theory invests heavily in technology, it’s not used for communication or personal relationships. It’s leveraged within the team so that people can provide personal service.
Three areas of automation are working well for them right now.
- Inspeqt. This is a tool that allows property managers to go into any house and scan bar codes on appliances and systems. It provides an inclusive look at everything in the house, which allows for recommendations on repairs, replacements, and upgrades. If a water filter is broken, the Inspeqt app identifies the exact filter that’s needed and even facilitates a purchase on Amazon that gets it there the next day. This saves so much time. Instead of calling a contractor and waiting days for a new water filter to be installed, the problem is handled on the day it’s reported. This is extra value to owners and tenants.
- Minut. A Minut device is especially useful for vacant home and second home property management, which is the majority of their portfolio in Oregon. A device similar to a smoke detector is installed and it measures humidity levels, heat, and noise levels. If something is wrong, there’s an immediate notification. If it’s the middle of winter, for example, and the temperature has dropped to 60 degrees and continues to get lower, they know the pipes are in danger and it can be addressed.
- Collecting data and creating apps. Chambers Theory has a Director of Operations who is a wizard at collecting data and building apps for the team to use. Metrics and performance data can be accessed immediately and everything can be automated that isn’t external facing communication. Repetitive, internal tasks are easily automated and simplified.
A lot of companies talk about their mission and their vision. They have powerful slogans.
It’s one thing to tell people what you believe in, but the real proof is when you show them.
Chambers Theory has managed to do that, and we’re so glad that Tommy and Chris joined us to talk about what they believe in and how it has helped them grow a successful property management company.
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