How to Hire and Compensate Sales for Your Property Management Company

How to Hire and Compensate a Salesperson for Your Property Management Company

Hiring a salesperson is a daunting task; you have to trust someone to speak on behalf of your company.

This person is the first voice they deal with, they make the promises, and they affect your bottom line. It’s easy to put off hiring a dedicated salesperson, but you need one – as an owner, you have plenty of other stuff to handle.

A good salesperson needs to be compensated differently than other employees of your company. Top salespeople are often ambitious and driven and are motivated by a pay structure that rewards them for meeting and exceeding their goals. In property management, where the typical deal is worth thousands of dollars in long-term income and competition is fierce, you cannot afford to take these hiring decisions lightly.

In order to find the right balance, so that your company and your salespeople can both win, in today’s blog we summarize a recent podcast on how you can set up the perfect compensation plan for salespeople in the property management industry.  

In the podcast, we interview Duke Dodson of Dodson Property Management about how he hires salespeople for one of the fastest growing property management companies in the United States. The article below is just a taste of what we cover in the podcast. To get the full value of the talk, be sure to watch the video above.

When Should a Property Management Company Hire a Salesperson?

It all depends on how quickly you are looking to grow. For most property managers, growing by 10 properties per month is an excellent goal to start with. If you can attract that kind of new business every month, then you’ll enjoy an impressive increase in annual revenue. Hiring a dedicated salesperson will help you reach and even exceed that goal.

Duke knew it was time to hire someone when he realized that he was a good salesperson, but not a great salesperson. When Duke was doing the selling himself, he was able to grow by about 100 units per year, when he was spending 10 to 20 percent of his time on business development.

When he hired a full-time salesperson, his growth jumped to over 300 new units per year. One thing to remember if you are hiring a dedicated salesperson: you need to have the capacity and the systems in place to handle the growth you’re hoping to achieve.

A Realistic Capacity for a Good Business Development Person?

Since Dodson PM ranks well on Google, they are able to get a lot of “warm” leads. So with a salesperson, their goal is 25 properties per month or 300 per year.

In the wintertime business slows a little and in the summer it picks back up. There is also volatility when they get a big client who has 10 or 20 properties and their numbers spike. Success all depends on the amount of units a company can absorb quickly. Dodson built his company so that they can handle a new client that has 20, 30 or even 100 units. If you can handle that kind of volume, your goals can be fairly hefty. If you don’t, 10 properties a month is a good number to shoot for, until you can learn to onboard clients more efficiently.

You’ll also need to consider whether you have a steady stream of warm leads coming in the door from your content and marketing efforts. A dedicated salesperson needs leads to do their job. If you don’t have that steady stream you may want to consider investing in a Google Ads campaign, or increasing the amount you spend on your current campaign.

What Should a Property Management Company Pay a Salesperson?

There are essentially two ways to compensate a professional salesperson.

  1. You can pay a salary plus commissions on any new business that they bring you.
  2. You can make the compensation structure entirely commission-based.

At Fourandhalf, we recommend a base salary plus commission. Having a base salary solidifies your commitment to that salesperson, and theirs to you. In addition to the base salary, the commission on the new leads that are closed rewards and motivates the salesperson.

The salary structure you come up with will depend on a number of things. You’ll have to look at your market and the kinds of salaries and commissions that professional salespeople make in your area. Also, you will have to take into account how many leads per month your marketing efforts are bringing in to get an idea on the number of contracts that can close each month, and therefore the commission the salesperson can earn. Based on those things, you can do a partial salary and partial commission compensation plan that serves all your needs.

You can also offer accelerators for exceeding monthly goals, so that your salesperson can help determine how much he or she earns. There will need to be solid administrative and accounting organizations within your company in order for an accelerator payout to work, but if you can handle that without arguing over the details each month, it can help accelerate your company’s growth.

However, given the current market, it will be fairly difficult to hire someone without a base salary. It is the method preferred by most salespeople as well.

Where Can a Property Management Company Find a Salesperson?

You’re probably going to have a hard time finding someone with both sales experience and property management experience. And that’s not necessarily a bad thing. If you can find someone who excels at customer service and has a background in sales – even retail or banking – you can train that person in property management and the services you are selling.

Be careful, however: a salesperson that excels in a high pressure, high volume, sales environment may not be a good fit for property management, where you are looking to have a long-term relationship with the customers they sign.

So, think outside the box when you’re looking for that salesperson. You can run an ad, but you can also talk to people that you meet every day. People interested in new career opportunities are everywhere. Write up a job description and start talking to the salespeople and customer service experts who impress you while going about your daily business. There are lots of great salespeople out there that are not getting paid as much as they should, and some people that don’t even recognize that they could excel at sales.

Property Management PodcastThe video above provides the full 32-minute talk with Duke Dodson, if you like the content be sure to subscribe to the Property Management Show on iTunes, or visit EverythingPropertyManagement where we post each episode with an article. If you have any questions, contact us at Fourandhalf and we’d be happy to tell you more about how to put together a sales process and hire a salesperson.

Alex Osenenko

About Alex Osenenko

Alex’s professional mission in life is to help small businesses grow and thrive. Alex is the President and CEO of Fourandhalf.com and a Co-Founder of the PM Grow, Inc. His business philosophy is simple: Happy Customers are created by Happy Employees, which results in Happy Shareholders. Alex's deep commitment to entrepreneurship and improving the lives of small business owners everywhere empower him to host “The Property Management Show” bi-weekly Podcast and speak internationally on the subjects of Growth, Marketing, Sales, and Entrepreneurship.

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Desired Growth (# of properties) :
Average Monthly Rent :
Annual Contract Value: $0
Customer Lifetime Value: $0
Estimated Annual Profit: $0
Estimated Lifetime Profit: $0
Estimated Portfolio Value Upon Sale: $0

How we got these numbers

• Annual Customer Value (8% of average rent multiplied by 12)
• Customer Lifetime Value (4 multiplied by ACV)
• Estimated Annual Profit (at 20% of ACV)
• Estimated Lifetime Profit (at 20% of LCV)
• Estimated Portfolio Value Upon Sale (1.2 times ACV)

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Alex Osenenko
President and CEO

Alex’s professional mission in life is to help small businesses grow and thrive. He is the President and CEO of Fourandhalf.com and is serving his 5th year on the Board of Directors for CALNARPM.

After spending 9 years in the trenches with his property management clients, Alex draws on his experience to host “The Property Management Show” Podcast and co-authors a weekly Property Management Blog on Fourandhalf.com. Alex has extensive experience speaking for various NARPM events at the local, state, regional and national level.

Alex is a graduate of San Francisco State University with an Electronic Commerce Systems Degree. His business philosophy is simple: Happy Customers are created by Happy Employees, which results in Happy Shareholders. Alex serves on the Board of Directors of CALNARPM (California Chapter of National Association of Residential Property Managers) and hosts a Podcast “The Property Management Show“, available on iTunes.

 

John Bykowski
Chief Operating Officer

After graduating from the University of Michigan with a film degree, John proceeded to do everything but. During his career, John has specialized in operations and has developed processes for small companies in diverse industries, such as bleeding-edge marketing technology, social networking, trade shows and exhibitions, and cloud software. John and Alex had worked together previously, and when he needed someone to help take Fourandhalf to the next level and beyond, Alex brought in John as his first employee, and later, business partner.

In addition, now that he’s using his film school know-how to help property managers look their best in their blogs, his mom no longer feels his degree was a complete waste of time.

Danny Morris
Director of Account Management

Born in Australia and growing up in Israel, Danny has spent a lot of time traveling the world between those two places. After completing his military service in Israel, Danny began following his biggest passion, writing, which he discovered while backpacking South America and publishing his first book.

When it was time to unpack, he returned to Australia to complete his Journalism studies amongst the beaches of sunny Perth. Danny is a huge online fan and after working in a number of related jobs, he finally gets to combine his two favorite things, working with media and people.

Marina Osenenko
Product Manager

Marina draws upon her real estate, business operations and customer service expertise for Fourandhalf. Her favorite part of being with Fourandhalf is the opportunity she has to really get to know our clients, build professional customer relationships and truly be part of a team that assists in their success.

Her time away from work is happily spent watching her children grow up and attempting to keep up with them! Any spare moments beyond nurturing her children are filled with hiking, spending time with friends, exploring the Bay Area and squeezing in a non G-rated movie every now and then.

Marie Liamzon
Product and Marketing Manager

Before joining Fourandhalf, Marie worked for one of the largest banks in the world. She took on different roles, but couldn’t find what she was looking for. She pursued a variety of side projects until she finally decided it was time for a career change.

Marie is very passionate about helping people and learning new things. In her spare time, you might catch her exploring new places and taking far too many pictures.

Kyle McLean
Customer Success

Born in San Diego County, Kyle McLean has since migrated to the Oakland woods. A fan of tall trees and tall tales, he holds a bachelor’s degree from the creative writing program at the University of California, Riverside and is a licensed California Certified Shorthand Reporter.

After a few years as a freelance court reporter, Kyle has joined Fourandhalf for an opportunity in sales and digital marketing. In addition to reading and writing, his hobbies and interests include gardening, hiking, soccer, coffee brewing, and craft beers.

Karen Wyle
Account Management

Originally from the Philadelphia area, Karen moved eight times in seventeen years all over the East Coast and to the Midwest before settling here in Northern California six years ago. She is an alumna of Brandeis University with a BA in American Studies and earned a MBA in Marketing Management from Indiana University in Bloomington. Karen’s business career has been well-rounded, with experience including advertising, direct marketing, corporate retail, product management, new product development, and new customer generation. Beyond an office setting, she has been thrilled to volunteer her time giving back to the community with KPMG’s Family for Literacy, at her daughter’s school, and as a Girl Scout Troop Leader. Karen enjoys music, good food, traveling to new places, completing jigsaw puzzles, meeting people and making connections.

Karen became a part of Fourandhalf’s Account Management team in 2016, relaunching her marketing management career after a pause to raise her family. She is excited to rejoin the business world and to work with such a strong marketing management team.

Paige DeRuyter
Account Management

Paige graduated from Chico State University with a degree in Journalism. Her favorite part of working at Fourandhalf is helping clients create and produce educational blog content to grow their business. She is an avid sushi enthusiast who enjoys riding her bike and watching college football and in her free time.

Nissim Boozaglo
Web Hosting Support

After working as a Radioshack store manager, Nissim decided to change his career path and pursue his passion for music production by getting his B.A.S. from Expression College for the Digital Arts. Nissim has a beautiful 8-year-old girl and loves cooking delicious homemade food and going camping with her! At Fourandhalf, Nissim is responsible for the implementation of the clients’ Landing Pages and Google Adwords campaigns.

Theresa Barnes
Campaign Director

Theresa Barnes was born and raised in the Bay Area and graduated with her Bachelors Degree in Communications Studies at San Francisco State University. She worked in aviation at a private FBO for 3 years, and other industries, before joining the Fourandhalf team. She finds a balance between being a young mother, work, and living a healthy lifestyle outside of work by staying as active as possible. She is dedicated to customer satisfaction and having a great work ethic.

Brittany Stephens
Campaign Director

Brittany recently moved to the Bay area after graduating from California State University Chico with a degree in Business Marketing. She is known for her excellent communication, customer service skills, and shameless nerdyness. Her passions include: music, tabasco, Lord of the Rings, and the Golden State Warriors.

Logan Jones
Business Development

After graduating from CSU Chico with a Degree in Business Marketing, Logan moved back to the East Bay and pursued a career in sales. With an attention to detail and a relentless drive, he strives to improve himself and his passions each day. When not at work Logan enjoys playing guitar and writing songs, and occasionally performing around the Bay Area. He is an avid sports fan keeping up with everything SF Giants, 49ers, Cal Bears, and Golden State Warriors.

Hope Lumbley
Account Management

Hope recently moved to the Bay Area after graduating from Chico State University with a degree in Journalism. She is coffee crazed, dog obsessed and hopes to visit all National Parks. One of the greatest times in her life was when she lived abroad in Costa Rica and hopes to travel more of Central America in the future. She feels blessed to work for a company who supports her love for travel and the need to learn more about what the world has to offer.

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