Well, it might seem a daft to say, but any letting agent
has a responsibility to grow their business.
I am sorry, but all you agents
that expand by acquisition are stupid, have money than sense and lazy. You pay 150%, 160% even as high
as 190% of annual turnover to buy a lettings business. Ah, you say, ‘Chris, its
easy and its plug in profit’. I don’t disagree, it is easy, but it’s a very
expensive easy. All the big corporate’s have wallets stuffed with £50 notes at
the moment, and they want to spend it! Therefore, you will have to pay
handsomely for the privilege.
So, go ahead and buy that agency that has 140 managed properties, that
turns over £180,000 a year for £340,000. Bring the staff over as well (its the
law) .., or pay them redundancy .. either way, 140 properties will mean 2 or 3
extra staff to service them .. it might as well be the staff that come with the
agent you are buying as they know the landlords), You put down £60,000 cash and
borrow the rest from the bank. They will lend you the money over 5 years at 8%
to 9% .. so your monthly payments back to the bank are £5,600 per month for the
next 5 years.. ..the issue is, the income is only £15,000 and you have three
staff wages, three cars, three National Insurance costs .. there inst much left
.. is there?
So what’s the alternative .. grow organically, I say. Go and get new
landlords. So how do you do that? Well the first thing is to look at it in
different way to the way you are looking at it now. What most people call
getting new landlords , I call "buying" new landlords .
Why? If you stop and think about the price you're paying to bring in
added landlords in terms of time or money, you can start to make better
decisions about how and where to put those resources. The practice is
especially important for new letting agents who tend to not only have more
limited means.
Here are four simple ways to "buy" new landlords :
- Networking and referrals. Landing referrals from
networking or past business associations isn't just a cheap way to pick up
new business. It's also a way to pick up landlords with the highest
retention rates. What's more, referral landlords tend to become a source
of additional referrals. How do you find referrals? Beyond having a lettings
service that's in demand (but there are hundreds of lettings agents), you
must have a clear idea of who your "perfect" or
"ideal" landlord is.That way, you can communicate to others in
your network what type of landlord you're looking for. You can also focus
your own lettings services to meet the needs, wants or desires of that very
specific profile. Then, you need to ask for referrals from satisfied landlords
(and that isn’t a limp email asking for a Google review .. although they
are useful). Be sure to also find ways to continually thank your sources
for their ongoing advocacy of your business, by doing minor things, like
picking the phone up and thanking them.
- Advertising. The key to advertising successfully is
to generate promising leads in exchange for the money you spend. To do so,
it helps to offer a message that not only hits on your target landlords ,
but also showcases the value you can offer them.
And though newspaper readers has dwindled in recent years, depending on your market, they're still a worthy option for attracting new landlords . If your target market is, say, people aged 45 or older, you may want to consider community papers or niche publications as older consumers still rely on them for information. Well, aren’t landlords 40 to 70 middle aged middle income people .. they are the ones who read local newspapers
But even older people are increasingly turning to the Web -- making it a definite jumping off point for any advertising strategy. To tap into this medium, your first step is to work out, where are my target market (landlords) go on the web. 40 to 70 middle aged middle income men don’t have a Facebook or Twitter account .. stop wasting your time on these platforms if you want more landlords. What about Linkedin? Yeah .. but how often do people log on to Linkedin? Once a week, once a fortnight, once a month? .. exactly .. social media is a complete waste of time for landlords. There is one type of social media that does work for landlords though. It helped one agent improve his turnover from £350,000 per year to £550,000 in two and half years.. what is that ... blogging! (but not like the blogging most of you agents do, this was special blogging. I teach that style on my one day course .. its the best bit
- Teaming up. Another way to leverage
available resources is piggy backing arrangement. In this
arrangement, another business with the same target customer will use their
database to promote your business. They might attach a gift voucher
or other discount offer for your products at the end of one of a
newsletter or mailing. Examples of this could include: you teaming up with
an accountant, and he/she offers a discount on your services via the
accountants eshot. To draw in another business, offer to pay for the
business owner's mailing or email expenses, or offer the business owner
commission.
- Strategic Alliances. You might take that partnership
a step further and have a strategic alliance. While a host beneficiary
relationship is generally a one-time or short-term commitment, strategic
alliances can sometimes last for many years. For instance, a plumber or
builder and a lettings agency might send each other referrals for clients
who need added services. As long as there's continued value to the
shared audience, strategic alliances produce streams of referral business,
which is ultimately what will benefit you most over time.