Are you losing out on money? Often, it can start with how you charge for your property management services. When was the last time you’ve updated your fees? It’s the number one way to achieve higher profitability, yet many owners don’t do it since it can be easy to put off. It may be time to open up that conversation and get this addressed now so your company can win with each new contract that comes in.
Today, we’ll give you the lowdown to finding an effective price point for your business and answer other common questions on pricing along the way.
To Show or Not To Show Pricing on My Property Management Website?
How often do you look up what something costs on the internet? Most of us do it every day. So, how do you think your prospect feels when your pricing can’t be found on your website?
57% percent of a customer’s decision is already made by the time you get a phone call. Pricing is a major factor that influences a buyer’s decision, if you leave it out, you won’t get the phone call. People, now more than ever, are looking for answers instantly. If you don’t provide them the answers, they will look at other websites and call the property manager whose prices are easily visible online. So, you’ll miss a phone call and give away business to your competitor.
If you are able to explain how you handle clients’ pain points and stand out from your competition, those leads will justify the costs, even if your prices are higher.
Our advice – you need to publish pricing on your website, whether you compete on competence or on price.
How to Set the Right Price for Your Property Management Services
Figuring out how to set the optimal price is a science in itself. There aren’t cheap or expensive products out there; it’s all based on the curve. The difference is interest versus profitability. So to make a rough guess at the right price for your area, you could look at your competitors and what they’re charging, but where you really want to be price-wise depends on your desired profitability versus how many leads you want coming through the door. You could have low prices and have the phone ring off the hook – but your profits are low, and work is high; or you can set your price point higher, and get fewer leads, but make more money per signed contract. (Also – if fewer leads are coming in, you’d better be answering your phone and have a great pitch!)
You have to test and figure out where you need to be on that curve.
The ability and willingness to test things – and fail often – is what sets apart the most successful property management companies from everyone else we talk to. Check out a few of our podcasts from The Property Management Show, and listen to:
- Lisa Wise on how she built Nest in Washington DC.
- Kathleen Richards on the pricing structures that worked for her business in Santa Cruz.
- Steve Rozenberg on how he failed his way into growing a property management company.
A common theme emerges: their willingness to iterate, test, fail, then win. That is your progress.
A Pro-Tip To Help You Find Answers Quickly
A way to efficiently find the answers you need without months and months of testing is by implementing a Good/Better/Best pricing structure.
It allows customers to choose the level of service they want and the price they’re willing to pay. You can track leads across the spectrum of price sensitivity and figure out where most of your prospects lie. From there you can figure out where you want to be, between low price and high interest or high profit and lower interest.
The experimentation doesn’t end there; you can shuffle around services between packages and/or eliminate structures altogether. You can think up potential upsells and opportunities for flash sales or packages such as inspections and other add-ons. You have to really test it first, fail a few times, understand what your customer wants and your market demands, then set the price and start testing other functions of your business.