Referrals are the lifeline of any business and as an owner it really needs no other introduction. Our clients often talk to us about how they are successful in getting owner referrals and Realtor referrals to build their property management business, but remember that vendor referrals can be another outlet in free business. Kathleen from The Property Management Coach has recently told us that she built a substantial portion of her business on mainly vendor referrals. In this blog, we will go over which vendors can help get more owners, how to encourage referrals, great areas to network locally and a pro-tip to solidify your reputation.
Which Vendors Can Help Property Managers?
One of the vendors Kathleen specifically mentioned was her carpet cleaner. When tenants trash a carpet in a rental home, the carpet professional who is called to replace that carpet would tell Kathleen about the house, or maybe tell the property owner about Kathleen and her services. Owners are interested in learning how they can stop tenant carpet damage from happening, so it’s a good way to introduce the idea of property management.
The same thing can happen with painters, CPAs, contractors, carpet/flooring installers and estate attorneys. All of these people have contact with property owners who are renting out their homes, so it is worthwhile developing a relationship with them.
Encouraging Vendors to Mention Your Property Management Company
That doesn’t stop there necessarily, you will need to give vendors a reason to mention your property management company. Think about unit economics and offer a referral fee. Check your local laws because in a few places it’s not legal, but in most states and cities, a referral fee is legal and a normal business practice.
A property management contract has a certain lifetime value to it from $3,000 to $20,000 depending on the home and the area. Giving a portion of that as a referral fee to your best vendors can be cheaper than a lot of other marketing avenues. Given the nature of referrals, it can also be more reliable.
An alternative to a referral fee is to reward your vendors. Hold an annual Vendor Appreciation Event where they get awards and public recognition for how they support your company. Provide vendors with gift cards or gas cards. Get creative when it comes to rewarding vendors; just the thought of you appreciating their service goes a long way.
Network Referral Groups that Benefit Property Managers
Local business networking groups can also be a valuable way to gather professional referrals. I have a cousin who is an arborist, and he has found a lot of success by joining local groups, going to meetings and sharing vendor recommendations with other members. Look for rotary groups, women’s groups and organizations like the Lions Club. Check online and in your local area. It’s worth your time to get referrals through these groups, to keep up with local laws and to participate in your community.
A Google search helps in finding these groups. Specifically, Meetup.com is a great site to help discover referrals groups in your area.
Pro-Tip: Get More Reviews
Here’s a professional marketing tip: you can also get reviews from your vendors. They have a valid opinion of your business, and we have been happy to do this for some of our clients. If Bob from Johnston Property Management asks us for a review, we’ll say that we’ve been working with Bob for three years and his business is professional and great to work with. It’s a real review, and can be done with your vendors.
Fostering a vendor relationship is just another outlet in growing your property management business. If you have any questions about this or any part of your marketing plan, please contact us at Fourandhalf.