Fighting Attrition - Is 0% losses possible?
I get the opportunity to work with many great business, but even after my many years in the industry, it amazes me that most business owners are happy to budget for up to 15% losses from the business each year. I get that, in business, sometimes one needs to accept the status quo, that things sometimes fall outside the operational capabilities of the business, but what if I told you that the business has complete control over the rate at which it churns customers. What if you could reduce your attrition rate to zero?
Let’s break it down into two main areas. There are often edge or unique cases, but lets looks at the mainstream ones. First we have service issues to your customer base. This can often be the highest percentage of lost managements. Service inadequacies are a direct result of team performance. I could dig deep here, in fact you will find a youtube presentation addressing this in detail, but the long of the short is, if you haven’t defined your teams goals, support them in their endeavours to achieve them and measure and celebrate their success, you will struggle to align them in your efforts to deliver a superior service to your clients. A high performing team with a well documented service schedule will deliver the highest service levels to your client base, retaining even the biggest skepticists of your business.
Secondly, let’s look at sales out of the rent roll. This would be the second biggest reason managements are walking out your door. Lost managements due to sales could make up 5-8% of your losses. If I told you that 20-30% of your existing owners could be in the market to buy another investment property in the next 12 months, would you be surprised? With each property you manage, you hold valuable data. The market sales value, the market rental value, the return on investment, maintenance costs, days on market, tenant history. These are all valuable data points that investors look for when buying an investment property and your agency is sitting on them.
When a landlord in your rent roll shows any sign of selling, take the liberty of presenting a sales information profile of their property to them. Have a template in place, use the professional marketing photos you have already and pull all these data points into a professional investor property profile. Once your landlord sees this, they will not hesitate to give you the listing for sale. Your first move is to get this to all your landlords and in particular the 20%-30% that you already have tagged in your database as potential buyers in the near future. The joy of recycling a property inside your rentroll is that you get to retain the management and make commission on the sale.
There is real opportunity here for a business to leverage off the resources of a buyer’s agent or buyer’s advocate. The buyers advocate’s role would be to regularly communicate with each of your clients. They would have intimate knowledge of each, and know which ones may be considering either buying or selling a property in the near future. Remember, you have more owners looking to buy in your business than you do looking to sell. The buyers advocate can be out there in the market looking for other potential investment properties that would suit both your investors and your business.