What’s your definition of “good” property management owner leads? How do you determine which leads are “bad” ones? And if everyone has a slightly different definitions, then are we just comparing apples to oranges?
Jeremy Pound is the CEO and founder of RentScale. He’s joining us on The Property Management Show to talk about the difference between various types of leads. He’s going to give us standard definitions for things like market-qualified leads, sales-qualified leads, and prospects. Then, he’s going to explain how to set up a basic sales process.
This information will provide you with an industry standard for determining your cost per acquisition, which will ultimately help you close more doors.
Introduction to Jeremy Pound
Jeremy founded RentScale with Jordan Muela of LeadSimple. The goal of RentScale is to bring a professional level of sales and sales management to the residential property management industry. Property managers are operationally-minded. You would probably agree that most companies have their customer services dialed in and their maintenance policies and accounting practices where they need to be.
But, a lot of management companies are winging it when it comes to growth. RentScale aims to bring professionalism to the sales side the same way Fourandhalf brings a higher standard to property management marketing.
What is a Lead?
Property management owner leads can be great, and they can also be a source of friction.
Not everyone even knows what a lead is.
Part of professionalizing and operationalizing any process includes creating labels and boundaries. You need a framework for communicating about things. Leads can sometimes feel like magic. But magic isn’t an operation. It’s not a process. Instead of trusting some magical sales process, you need labels and buckets and guidelines.
At its most basic definition, a lead is simply contact information.
If you have a name and a phone number, or an email address, or a LinkedIn profile, you have a lead.
Even just a name is a lead. You have discovered someone who may have an interest in what you do. That’s a lead.
What are Property Management Owner Leads?
Now that we know how simple it is to identify and define a lead, let’s talk about what property management owner leads look like.
A lead might be someone who fills out a form on your website. It might be an owner who has a question. It could be a landlord who wants to know how much you charge. It might be a referral.
These are inbound leads and it’s what most property management companies wait for.
All those listings that are managed by owners are also leads. If someone is renting out a property in a building where you’re already managing three units, you have a lead.
Prioritizing Hot and Cold Leads: Developing a Pipeline
“Pipeline is life.” Remember that. If you don’t have a pipeline, you don’t have the opportunity to sell. You want to talk to people who will potentially do business with you. So, in your sales pipeline, you want to move your leads into the prospect category.
Prospect is another vocabulary term. A prospect is a lead who is in your sales pipeline.
Your lead is the name or the contact information. That lead becomes a prospect if you call them and talk to them and find out two things:
- Are they qualified to do business with me?
- Would they be interested in doing business with me?
How you qualify a lead depends on your business model. You probably want them to have the financial stamina that’s required to own investment properties. You want them to have maintenance reserves and maybe you want them to be hands-off and not calling you every day.
If the lead is qualified and interested, they convert to a prospect.
Prospects deserve more of your time and energy.
Everyone has to be on the same page with how you define a lead and a prospect. Then, you have to understand the difference between a marketing-qualified lead and a sales-qualified lead.
Marketing-Qualified Lead vs. Sales-Qualified Lead
LeadSimple really revolutionized the idea of automation for property managers, and if you use another CRM system, you probably have similar capabilities in that you can use drip campaigns to follow up and do content marketing.
When someone comes to your website and reads your blog about Three Questions to Ask a Property Manager, they might provide an email address to get another piece of content that addresses the same topic. So, you know they are interested in that information. You know it’s a landlord or a potential landlord or someone to whom you can market your services.
That’s a marketing-qualified lead.
A sales-qualified lead is a bit different. It’s someone who fills out a form or reaches out to you and asks to be contacted. That’s a lead who is raising his or her hand and asking to be called on. Their intent is to be contacted.
A marketing-qualified lead is not interested in being sold to yet. They’ve indicated interest, but they’ve not asked to be contacted. A sales-qualified lead has provided contact information and said they want to hear from you.
A prospecting lead is that landlord who is renting out a home in the building where you manage a handful of other homes. If you call him up and introduce yourself and the idea of professional property management for his rental home, you’ll find out if you have a marketing-qualified lead or a sales lead.
Your messaging needs to match the lead.
If you call a marketing-qualified lead and launch into a sales pitch, you’re going to lose that lead. If you call your marketing-qualified lead to confirm she received the white paper download that she clicked on, you’re doing okay.
Here’s a secret about your sales process: it’s what allows owners to test drive your service. Your sales process shows them what it would be like to work with you. So, it has to be bullet proof. This is your free trial and your test drive.
How to Prioritize Your Property Management Owner Leads
Prioritizing your property management owner leads depends on your lead flow.
One particular client of Jeremy’s spends a lot of resources marketing. They’re on the radio and the internet and they have an amazing reputation. This company is generating so many leads that their number one concern is how to follow up with inbound leads. They’re getting 80 to 100 leads a month, and when you have that many inbound leads per month, the main problem is follow-up. How do you call everyone back? Calling back the first time is easy, but can you keep going and call back three, four, even seven times?
Jeremy had a marketing agency that was successful buying satellite advertising for radio. He offered a guaranteed SEO program, and ran ads on Bloomberg and CNBC, which resulted in 90 new phone calls every time an ad ran. But, they couldn’t close any sales. They got great leads but didn’t close any.
That’s because there were 90 new leads coming in every week, and the staff could only respond to those new calls. They were unable to follow up and nurture the existing leads. So, with a four to six week sales cycle, it became clear that they could only run those ads the first week of every month. It helped them to close more business.
That’s one end of the spectrum. At the other end, maybe you’re a small company getting two leads per week. If you’re not investing a lot of money in marketing and you’re relying heavily on your reputation and good reviews, you might only get two leads a month. In this case, you need to prioritize your time around prospecting. Ask for referrals. Call those For Rent by Owner leads.
The way you prioritize your leads will change as your business changes.
The default temptation is to spend all your time with the people who are about to buy. You have agreements that are ready to sign, and those are the phone calls you want to return.
You should return those phone calls. That’s important business. It’s harder to call the people who are new leads. But you have to fill the top of the sales funnel because the pipeline is life.
Protect your time so you can call your new leads. You’re building relationships. Spend the time and make the effort that’s necessary to build those relationships. You have to be vigilant and follow up or you’ll lose that lead to someone who is better at building the relationship.
The Risks of Not Understanding Qualified Leads
What happens if you don’t have consistent labels for your property management owner leads and you don’t have an operationalized sales process for marketing-qualified leads and sales-qualified leads?
Think about why most personal trainers and nutritionists require their clients to keep a food journal. Because it’s easy to forget about the cookies you eat and the beers you drink. Our situational awareness is troublesome; it’s a human condition. We have preconceptions about what things are like, but usually those notions are not true. We are actually terrible judges of how things are going, and everything becomes anecdotal.
This is why we label and track things.
The biggest risk of not understanding how to define leads is that you will make bad decisions. You’ll make subjective decisions based on instinct instead of smart decisions based on data.
Avoiding Unqualified Property Management Owner Leads
You’re not trying to attract more tenants to your business; you want owners and investors. So, beware of marketing ideas and channels that are delivering more leads but unqualified leads. That’s a time and resource waster.
This is a long game. You’re not going to call vendors and tenants who fill out your online forms.
Spend your time calling the qualified leads, even if they aren’t ready to say yes right now.
Maybe you went on vacation for a week so you didn’t call a new lead back right away. When you come back to work, you do make the call and it turns out that lead signed with another management company. Does this become an unqualified lead?
Why? Because anything can happen with that property management company, and you have an opportunity to check in with the owner after a few months and make sure they’re happy with the services they’re receiving.
With this lead, you could explain you were on vacation. Tell them you had a great time, and it’s the only reason you would wait a week to return a phone call. Then wish them luck with their rental property and keep their contact information close. This is a qualified lead.
If you’re the owner of your property management company, Jeremy recommends replacing yourself with a sales person or a BDM as soon as possible. Outsourcing or delegating sales is last thing most property management owners will do. You need a dedicated sales person who can put in the time and the effort to follow up with that lead who is currently working with another management company.
Managing an Active Pipeline
An active pipeline helps you forecast.
Anyone in your active pipeline is someone with whom you have a dated next step. By that we mean a prospect who has scheduled something with you, whether it’s a phone call or a meeting at the property or some kind of interaction. That’s a dated next step, and it’s a prospect who belongs in an active pipeline.
If you have a prospect who is interested and has talked to you but does not have a dated next step, you’re moving them to a drip campaign that allows for passive nurturing. You’re not thinking about that person as much as you’re thinking about your active nurtures. These are the building blocks to an active pipeline that yields results.
Your passive nurture list is still made up of important contacts. These are the people that may keep saying no, but you want to stay in front of them. If a new rental law is passed in your state, send them the information you have about it. These are the building blocks of an operationalized sales process.
Absolutely Necessary vs. Nice to Have: When Does your Property Management Company Need This?
The need to have this operationalized sales process in place comes earlier than you think.
You need definitions. You need a system in place. Determine what success looks like for each person in your company, even if there’s only one person or two people.
If you’re still in start-up mentality where you or you and one other person are doing everything, you want to standardize everything before you begin replacing yourself with other staff members. You’ll have more awareness of what works and what doesn’t.
Cost Per Lead vs. Cost Per Acquisition
This leads us to a discussion about cost per lead, and while that may require a separate podcast altogether, Jeremy advises thinking about cost per acquisition instead. To be able to use your cost per lead as a metric, you need a sophisticated business that’s making more than a million dollars. Otherwise, it’s better to break down your cost per acquisition.
Really good sales and marketing is multi-pronged. When your company is small, managing your online reputation is important, and buying a pay-per-click campaign is important, and you’re always prospecting and using a nurture program. These are things that, when aligned, drive down your cost per acquisition. If you’re spending $5,000 per month and converting 10 clients, your question is how to make that 15 clients. It changes your business model.
Operationalizing things is a common theme on The Property Management Show. We believe that it’s always process or people that will lead to property management growth for your company and the industry as a whole.
What We’ve Learned: Property Management Owner Leads
Jeremy’s final words are this: remember your middle school science class where you learned about the scientific process. That’s what will make sense here. You have a hypothesis. You write it down, you track the data, and you stay open about being wrong or right.
The scientific method is underutilized in property management.
If you have any questions about anything you’ve heard Jeremy discuss today, please contact us at Fourandhalf, and we thank you for listening.
The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Get a free marketing assessment to find out how to start getting better clients into your portfolio.