Scott Brady, owner of Progressive Property Management, had 52 doors in 2013. Now, his company manages about 1,052 doors, and he plans to grow to 3,100 units by 2020.
We think he’ll do it.
Today, he’s joining us on The Property Management Show podcast to talk about executing the kind of growth that most property management companies only dream about.
Growing with Good Systems
Scott says that while some companies choose to grow, he has to grow. His business model has evolved to the point that he has 20 branch managers who are counting on him to deliver doors for management. That’s forced him outside of his comfort zone a little bit, but he’s committed to those branch managers, so innovating his marketing and distribution channels has become critical.
Good systems, he’s discovered, are essential. You cannot manage 200 doors without good systems. You cannot manage 400 doors with systems that are designed for 40 doors. And, the bigger you get, the bigger of a target you become for the Real Estate Board and competitors. A dedicated staff is needed to help you make sure every process is documented.
Many successful property management companies have a target market. For Scott and his company, the target is self-managing owners. That’s the biggest market available in southern California. We know that 70 percent of rental properties are self-managed. In Los Angeles, that translates to over a million self-managing property owners. By focusing on the emotional and financial pain points of that segment, Scott was able to come up with some compelling products.
His question, while building his company, was pretty simple: Why aren’t these owners hiring property management companies?
Reaching the 70 Percent: Providing Better Service
The entire property management industry has tried to tackle the astounding 70 percent statistic. A shift has begun, but that large percentage of the market still does not trust a professional property manager. Several things feed that distrust. The reputation persists that property managers:
- Are untrustworthy
- Are overpriced
- Provide terrible customer service
- Nickel and dime owners at every turn
It takes more than one person to correct that reputation. But, property managers can turn things around individually and collectively. The keys to changing the current reputation are:
- Value propositions
- Customer service
Pricing is pricing, but if you can offset an owner’s pain point around pricing by demonstrating your amazing value, it’s easier to make some progress. This takes the owner from fear of being screwed to trust. Trust is earned, and it resonates with owners. Slowly bring people to your website and use your programs and your value propositions to earn their trust.
Transparency: Websites and Pricing
Transparency is the first filter for many property owners. If they don’t feel like you’re being transparent, they aren’t going to be interested in hiring you.
So, why are companies afraid of putting their pricing on their websites?
It could be that they feel as though they’re at a competitive disadvantage. They worry that owners will seek out their lower-priced competitors. It’s a better to put your price up there, and also to put up your value around that price. If property managers position themselves as people who collect rent, owners will likely look at price first. But, if you do more for your owners, price becomes less important and your value propositions take center stage.
With more and more companies being transparent with their pricing, you’re going to look more suspicious every day that you don’t put your prices out there.
Controlling the Whole Customer Experience
To position your company for growth, you need to target multiple segments of the market, and you need multiple marketing channels, and you have to create multiple revenue streams.
This will insulate you against what may or may not happen in your market and the industry.
Scott has found himself wanting to control the whole customer experience. He doesn’t want his owners going to another real estate company when they want to buy or sell. He doesn’t want them going to another plumbing company or home warranty company when they have repairs. Scott would rather keep the owners inside a world that he can control.
When he has more products and services to offer, he controls the customer experience and earns multiple revenue streams.
By controlling the whole customer experience, Scott can provide better service and create raving fans. He can be the one-stop shop for all the owners he works with and their friends. They don’t need to call other companies when they want to sell a property or make an upgrade.
You can protect the relationship you have with your owners, and not let anyone else get into that relationship.
Take his lesson. Continue to innovate if you want to grow.
The pocket listing is a good example of holding onto and expanding the relationship you have with your current clients. For Scott in southern California, pocket listings don’t make a lot of sense because it’s not a big investment market. Sales prices start at $500,000. However, he has managed to find other ways to extend his services and increase his revenues. He’s just started a realtor referral program, for example.
Leverage your portfolio and be creative. When Scott lists a property for rent, he’ll get 29 or 30 leads, and only one of those tenants will get the property. So, he’ll take all the remaining tenants and ask them why they’re renting. He puts them on a path to purchasing a home, and he has a new crop of potential clients that other property managers might have neglected to put into their sales funnels.
When investors realize you can help them make more money, you’ll find them in line at your door.
The best way to leverage your portfolio depends on your market. Find a way to make yourself the trusted source of real estate information, and create a multi-dimensional relationship. If you’re that resource in your client’s life, you won’t lose them.
There’s a Danger in Thinking Small
There are a lot of smart people in the property management business, and a lot of opportunities. Unfortunately, we sometimes think too small or too narrowly. If you market yourself as being the Condo King or advertise that you’ve been in business for 50 years – that’s great. But, you’re not really expanding your role in the lives of your clients. You aren’t giving potential customers the idea that you can make them more money.
The larger you grow, the more difficult it becomes to turn quickly and to innovate. It has to be coordinated.
Recently, Scott’s company rolled out a preferred tenant program where tenants could choose to waive their security deposit and pay a monthly fee. Some of his property managers were a little freaked out about this, and a lot of colleagues were doubtful. But, he’s willing to experiment if it means benefitting his owners. Programs that differentiate your services need to be tried.
If You Have Something to Say, Say It: The Importance of Content Marketing
Scott was a pioneer of content marketing, and he believes that if you have something to say, you should say it.
He uses video, website copy and other types of content in two different ways.
- To create an emotional connection with a customer. He says his dream is to never talk to a prospect. He talks to clients after contracts are signed, but there should be enough content available to tell prospective clients everything they need to know. You can use content to tell people who you are, what you do, where you do it, and what your price is.
- To create compelling calls to action. Effective content will tell people what you want them to do and why. It’s not compelling to say your clients love you or you’re the property management leaders in your city. Raise the bar. If you’re not improving your content and using it effectively, you’ll be left behind.
Target your market with content.
Here’s a great example. Oregon recently passed a rent control law for the entire state. If you’re a property management company in Oregon, you should have stopped everything to go write a blog and film a video about what rent control means for landlords. In Spokane, a tenant bill of rights has just been passed where landlords have to pay for a tenant’s moving costs if you serve a notice to vacate. That’s an opportunity for Spokane property managers.
Educate your clients when things like this happen in your area. Get out in front of it and be the resource.
One of the best examples of killer content marketing is Stephanie Gordon at Gordon Property Management. She talked about rent control in San Francisco when no one else did. She never paid a dollar to Google AdWords or used other paid advertising, but she’s the leading property management company in San Francisco.
Create your content and title it properly so Google picks up the information it needs. Oregon property managers should be writing blogs entitled 2019 Oregon Rent Control and how it Impacts your Investment Property.
Rent control will be the hot topic in southern California in the next 20 years. Start getting that traffic now.
Five years ago, no one was doing video blogs, but the companies that did are cashing in now. It’s a great opportunity, especially if you concentrate on timing.
Jeff Bezos, the CEO of Amazon, said that if we’re successful this quarter, it’s because of something we did five years ago.
Everyone wants immediate gratification, but it doesn’t happen that way. Do today what will be effective in a year. Focus on the issues in your community, and start setting yourself apart as a resource.
Another Form of Content: Direct Mail
Scott also uses direct mail, which he says is a numbers game. The key is to target the right audience. Here’s how his numbers work:
- He sends out 10,000 pieces of mail in a year.
- 8,000 owners are reached.
- Only five percent of those people are looking for property management.
- That’s 400 owners in a year or 30 owners in a month.
After spending $7,500 on the direct mail campaign and winning 30 doors, that’s about $250 per door in acquisition costs.
It’s not all numbers. Successful direct mail has effective value propositions.
Scott has been doing direct mail for five or six years, and the content is targeted and useful. Sometimes, there’s a quiz. It might be about basic laws every property owner should know. If owners get two out of 10 laws correct, they will be more inclined to reach out to a property manager. Sometimes, you have to show owners what they don’t know.
The direct mail has to be compelling and it has to connect to your other marketing channels. It needs to be consistent with your website and your social media. Everything must be integrated.
You won’t see those 30 doors after your first mailing. But, you will see it after the sixth or seventh wave. People might hold onto your postcard for a year or more. Continuity counts, and persistence pays.
You can hear more from Scott at PM Grow in April. This is the premier conference for property management companies focused on growth. You’ll be able to catch his 30×30 15-minute presentation, and he’ll also do a one-hour deep dive on this topic.
If you want to talk to Scott before then, check in with him at Scottbrady1963@gmail.com.
Thanks for being with us, and contact us at Fourandhalf if you have any questions.