If you bonus your staff on move in’s, surely you will get more move in’s? Err .. No. Let me explain.
Today’s landlords have access to endless information and peer feedback like never before. I read somewhere that nearly two thirds of a typical buying decision is made before talking to the supplier of the goods or services.
What does this mean for traditional letting agents and the way they bonus/ commission their staff? Commissions in lettings, and the culture of bonuses, are responsible for much of the lettings agency woes when it comes to growing the lettings portfolio. Bonuses reward Neg’s immediately with cash which reward short term successes (move in’s) without regard to long term growth of the business (get more landlords). It’s no wonder that you as the boss want to grow your lettings portfolio, when in fact all the Neg’s want to do is hit their monthly move in target.
Don’t blame the neg’s .. blame yourself. Everyone says they are in this game for the long term, but can’t see beyond next month’s P & L sheet. Lettings isn’t like sales .. getting new stock in resi sales is easy ... but you cannot use the same tactics in sales. Your ‘landlords wanted’ and ‘half price fees’ don’t bring any business and cheapen and sully what you and your firm stand for in the long run. They are likely to be hurtful to profitable long term new and existing landlord relationships and growth. ... but remember, it’s not the Neg’s .. it’s you! They should not be blamed, it’s how they are motivated that’s all wrong.
Wooing landlords is like wooing a potential partner, not a quick one night stand! Landlords crave honest suggestions, and can tell when someone is trying to sell them something. They do not want to be hustled in to swapping agents, especially when what you might be offering is a poor fit. If you are genuine in your approach, this accelerates personal and business growth and the value that is created for everyone involved.
You see growing a lettings business is all about nurturing trust and building relationships, not pushing your 10% fee. Your goal, Mr/s Letting Agent, is to show the value of the service that you + team can offer and build a relationship with the potential landlord. The only thing that matters is the landlord’s success.
And think about it, with the tinterweb, today’s landlords can effortlessly investigate an entire marketplace in a matter of seconds with a tablet and Google. 10 years ago, lettings was smoke and mirrors , now people can see reviews, download AST’s, hell, they can even get their properties on RM/Zoops for a week with easyProp for the price of decent Sauvignon Blanc. Landlords don’t need an agent to connect them with their managed or tenant find service anymore. What they do need is to be enlightened, educated, engaged and thrilled on their own terms.
... and finally, It is so much more exciting to collaborate to understand the landlords’s needs verses making a disorganised and rambling sales pitch. If you hire experienced lettings managers and negs, that want to be with you, work for you, even in time given some equity, your goals will become their goals. People who love helping landlord’s build a long term strategy in their property investment will evangelise about you to their landlord mates .. trust me, I have seen it so many times...... and the best bit, they love their job, landlords love them, everyone loves you and your firm ..win win win situation.
Therefore, if you have a member of staff, who has been with you for a few years, and is good .. consider swapping them from a short term bonus to a long term bonus structure (including profit share and some form of equity share) .... trust me, if you thought they were good before, see how they grow ..in fact I bet they will do a better job than you!
Or just keep paying £20 per move-in and have the same number of managed stock you did two years ago and what you will probably have in two, four , six years time .... the choice is yours!
Today’s landlords have access to endless information and peer feedback like never before. I read somewhere that nearly two thirds of a typical buying decision is made before talking to the supplier of the goods or services.
What does this mean for traditional letting agents and the way they bonus/ commission their staff? Commissions in lettings, and the culture of bonuses, are responsible for much of the lettings agency woes when it comes to growing the lettings portfolio. Bonuses reward Neg’s immediately with cash which reward short term successes (move in’s) without regard to long term growth of the business (get more landlords). It’s no wonder that you as the boss want to grow your lettings portfolio, when in fact all the Neg’s want to do is hit their monthly move in target.
Don’t blame the neg’s .. blame yourself. Everyone says they are in this game for the long term, but can’t see beyond next month’s P & L sheet. Lettings isn’t like sales .. getting new stock in resi sales is easy ... but you cannot use the same tactics in sales. Your ‘landlords wanted’ and ‘half price fees’ don’t bring any business and cheapen and sully what you and your firm stand for in the long run. They are likely to be hurtful to profitable long term new and existing landlord relationships and growth. ... but remember, it’s not the Neg’s .. it’s you! They should not be blamed, it’s how they are motivated that’s all wrong.
Wooing landlords is like wooing a potential partner, not a quick one night stand! Landlords crave honest suggestions, and can tell when someone is trying to sell them something. They do not want to be hustled in to swapping agents, especially when what you might be offering is a poor fit. If you are genuine in your approach, this accelerates personal and business growth and the value that is created for everyone involved.
You see growing a lettings business is all about nurturing trust and building relationships, not pushing your 10% fee. Your goal, Mr/s Letting Agent, is to show the value of the service that you + team can offer and build a relationship with the potential landlord. The only thing that matters is the landlord’s success.
And think about it, with the tinterweb, today’s landlords can effortlessly investigate an entire marketplace in a matter of seconds with a tablet and Google. 10 years ago, lettings was smoke and mirrors , now people can see reviews, download AST’s, hell, they can even get their properties on RM/Zoops for a week with easyProp for the price of decent Sauvignon Blanc. Landlords don’t need an agent to connect them with their managed or tenant find service anymore. What they do need is to be enlightened, educated, engaged and thrilled on their own terms.
... and finally, It is so much more exciting to collaborate to understand the landlords’s needs verses making a disorganised and rambling sales pitch. If you hire experienced lettings managers and negs, that want to be with you, work for you, even in time given some equity, your goals will become their goals. People who love helping landlord’s build a long term strategy in their property investment will evangelise about you to their landlord mates .. trust me, I have seen it so many times...... and the best bit, they love their job, landlords love them, everyone loves you and your firm ..win win win situation.
Therefore, if you have a member of staff, who has been with you for a few years, and is good .. consider swapping them from a short term bonus to a long term bonus structure (including profit share and some form of equity share) .... trust me, if you thought they were good before, see how they grow ..in fact I bet they will do a better job than you!
Or just keep paying £20 per move-in and have the same number of managed stock you did two years ago and what you will probably have in two, four , six years time .... the choice is yours!