How Property Managers Can Think Beyond HOMI's

You Don’t Know Me, HOMI: How Property Managers Can Think Beyond High-Octane Marketing Individuals

Small businesses like your property management company are grossly underspending on marketing, and it’s hindering your growth.

This isn’t your fault. The person who gets the blame is a HOMI – a High Octane Marketing Individual.

All of these HOMIs are screaming at you from billboards and YouTube advertisements; Facebook videos and late night infomercials. They’re making some pretty huge promises. They’re telling you they can blow your business up for a small fee of $30,000, or maybe just for a few hundred dollars a month. You might have been burned by a HOMI in the past.

Of course you’re going to hesitate before you invest in marketing.

These HOMIs don’t know you, and they don’t know your business.

Sales and Marketing vs. Running Your Business

Like most small business owners, you didn’t become a property manager to do sales and marketing. You want to spend your time operating your business.

Sure, you want to grow your business, but you don’t want to think about growing your business. And, if you make a mistake while dabbling in marketing, you’re more likely to pull back and avoid it altogether.

HOMIs are quick to take advantage of your situation.

Property Management Marketing = Unparalleled ROI

Don’t give up on marketing.

It provides you with unparalleled returns on your investment. The amount of business you can earn with the right marketing investment is staggering. I just finished a presentation where I calculated the return on capital that one property management business got by investing $20,000 in marketing. The annualized return was 36 percent.

Is there any other legal way to get that kind of return?

No, there isn’t. But, your property management business has the potential.

Eliminate Risk from Your Marketing

Investing money into marketing must seem like a risk if it hasn’t worked for you before.

But, by tracking these three Key Performance Indicators, or KPIs, you can eliminate that risk. Take a look at these three numbers you need to effectively create a marketing budget. It’s simpler than it sounds.

Customer Acquisition Cost (CAC)


What does it cost you to acquire a customer? It’s simple to calculate. Take a period of 12 months and add up all your marketing and sales costs. Divide that by the total number of owners you brought on board. Or, divide that by the number of doors you acquired. That will provide your CAC.

Sales and Marketing Costs for 1 year:    $25,000

Number of New Properties in 1 year: 50

CAC: $500

You spent $500 to acquire each of those new properties.

Annual Contract Value (ACV)


What is that customer worth to you for a period of 12 months? This is the amount of money you made on management fees, leasing fees, and other ancillary costs from that one property or that one owner in a year. Divide the revenue that you gained by the number of doors that you have under management. That will provide your ACV.

Revenue over 1 year: $1,200,000

Units under management: 360

ACV: $3,333

Each client is worth $3,333 over a year.

Customer Lifetime Value (CLV)


What is the customer worth to you over their lifetime? Maybe you have a customer for an average of five years, or 10 years. You can multiply your ACV by the length of time you have a contract from a customer and determine your CLV. This number will show you why spending $500 per contract is not so expensive. If you don’t know how long your average customer stays with you, use a number like 4 years, which is around the national average for property management companies.

Annual Contract Value: $3,333

Avg. Time Owners is a Client (in Years): 4

CLV: $13,332

Each client is worth $13,332 to your business

Build Your Marketing Budget

Even if you hate math, these are not difficult numbers to calculate. Once you have them, you can apply this principle to building your property management marketing budget.

  • Let’s say you want to grow by 100 units this year.
  • Well, you know that your CAC is $500.
  • 100 x $500 = Your Marketing Budget.

Use this approach to validate which marketing channels are actually working for you. Get even deeper by applying the CAC to each channel. Maybe Facebook marketing is costing you $2,000 to acquire one client, but Google Ads is costing you $750 to get one client. It makes sense to direct your marketing money towards AdWords because you’ll gain more clients for less. You can compare Google Ads to investor seminars and all the channels you’re using. They each have their own CAC.

This is what HOMIs can’t or won’t tell you. Understanding your KPIs and the cost of each platform will help you decide where to double down with your marketing dollars to get more property management leads.

You won’t waste money on marketing when you have this information.

Talk to us. If this helped you or left you more confused – we want to know why. Contact us at Fourandhalf, and we can help you calculate your CAC and determine where your marketing dollars are best spent.

Alex Osenenko

About Alex Osenenko

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.

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Desired Growth (# of properties) :
Average Monthly Rent :
Annual Contract Value: $0
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Estimated Annual Profit: $0
Estimated Lifetime Profit: $0
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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 Manager

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
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
Conversion Designer

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.

Michael Lushington
Director of Technology

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