Bottlenecks to Property Management Profitability: Leaky Sales Funnel
Does Your Property Management Company Have A Leaky Sales Funnel?
This week’s episode of The Property Management Show continues our series on removing bottlenecks to encourage profitability in your property management company. We’re joined by two superstars from RentScale, Berit Elizabeth and Milissa Miller. No matter how outstanding your property management marketing is, if your sales process isn’t airtight, you will lose business. Milissa and Berit are going to tell us the damage to property management that a leaky sales funnel can do to your profitability, and they’re going to share a couple of secrets that can ensure you’re not losing opportunities.
By the way – if you’ve missed our previous episodes on bottlenecks to property management profitability, including focusing on the wrong activities, and poor accounting, you can catch up by clicking on the links.
Alright, let’s introduce these sales experts, and kick off our topic.
Introducing Milissa and Berit
Both Milissa and Berit are consultants with RentScale, where they work with property management companies across the country on improving sales processes. They are both passionate about optimizing the sales process. They have worked in sales and in training throughout many different industries, and they are happy to be working with property managers because of the unique business model that comes with recurring income streams.
What is a Leaky Sales Funnel in Property Management?
Even if you’re new to sales, you probably have some idea of what a sales funnel is. You’re putting all your leads and potential business into the top of the funnel, and on the bottom of the funnel, you’re producing customers.
When lots of leads are dropping into the funnel but few customers are coming out, your conversion rate is smaller than you expected, and you need to know where those leads are dropping off. This is what Berit and Milissa refer to as a leaky sales funnel. You have leaks in the funnel where those leads are falling out. You need to identify them and fix them so you don’t lose that business.
Visualize a bucket. It would be great if all your water stayed in the bucket. But, if there are holes in that bucket, you’re never going to keep all the water. That’s what a leaky sales funnel looks like.
A leaky sales funnel can break the bottom line of a property management business.
You’re probably paying for leads every month. If you’re putting a budget towards those leads, you want to know how much money you’re spending on leads compared to the money you’re earning on signed contracts. That means you have to look at the sales process itself. There are many stages to that process, and you need to evaluate each stage to find out where your sales funnel is leaking.
Are You Closing Enough of Those Leads?
Maybe you’re not even looking at your sales funnel because you’re closing a handful of great business every month, so you assume everything is working just fine.
Why go looking for problems?
But, you have to know your sales funnel so you can avoid lost opportunities.
Look at the bigger picture of how many leads you have coming in versus what you are closing. Does it make sense? You need to make sure you’re maximizing the leads that are coming in. If you’re not looking at your sales funnel, you’re not going to know what to fix.
Make your sales process visual. You want to take a look at the definitive steps you take, and you want to see how people move through the process. It won’t take long to identify where they’re dropping off.
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How to Fix a Property Management Leaky Sales Funnel:
Identify Your Ideal Client
You need to attract the leads you want.
Maybe you want to focus on attracting investors who are hands-off, or your company specializes in accidental landlords who never planned to rent out a home.
The way you approach those leads will be different.
You have to speak the right language through your marketing, otherwise there will be tremendous leaks in that funnel.
One of the biggest leaks is not knowing who your ideal client is.
Imagine for a moment that you decide your property management company is only going to work with yellow houses that have two stories and one front door and three windows. You’d probably be more profitable than a company working with all sorts of houses. Why? Because in your marketing, you’d be putting out specific criteria for who you were willing to work with, and every owner of a yellow two-story house would likely get in touch with you.
If you know exactly who you want to work with, you’ll have an easier time keeping leaks out of your sales funnel.
When you’re clear on your ideal client, it’s not only easier to attract clients. It’s easier to keep them. You’re setting an expectation, and that will lower your churn. Everyone will be happier. Customers will get the services they want and property managers will be happy because they know exactly what they’re doing and why.
Fixing this one leak solves a lot of problems.
Systemize Your Sales Process
Once you’ve identified your ideal client, you have an entire sales process that needs to be systemized and evaluated. It probably starts with a phone conversation. After the initial phone call, you may move into an onsite consultation. Then, there’s the follow-up. How many steps are between the initial contact and the closed contract?
It’s hard to pinpoint where that process is breaking down if you don’t actually have a system. Can you picture that bucket where all your leads go? You need a consistent process that’s followed for every potential new customer. If you don’t have that consistent process, there will be leaks springing from everywhere, and you won’t know where they started or how to stop them.
Hope is not a strategy. A lot of property managers have excellent systems for operations. There’s a process in place for maintenance, rent collection, leasing, and accounting. But when it comes to the sales side, it’s easy to overlook the value of operationalizing your sales system. Maybe you’ve hired a BDM and they are taking calls but just winging it. That’s not effective. You need a predictable system.
The system you put into place needs to be teachable and repeatable. As a company owner, you might not be doing the sales work, but you do know who your ideal client is and you do know what needs to happen to bring those clients into your funnel. So, you need to be part of operationalizing the sales process. You have the vision. You know what you want for your company. Get that process down on paper and make sure everyone in a sales role follows it.
The sales process has to match your vision.
If you want to attract a great sales person or a top notice BDM who maybe isn’t familiar with the property management industry but is an expert at sales, you absolutely need a process ready for them. They will bring the sales skills you need. But, the infrastructure is essential. A CRM system needs to be there already. The job of your BDM is to execute that process, not create it.
Establishing Conversion Standards
If you’re just starting to build your sales funnel, you’ll have lower conversion rates. It’s hard to say what your conversion rate should be. There are so many variables, including your market and the types of leads you’re bringing in.
Remember that not all leads are equal. A referral from a Realtor who has an investor client ready to rent out a property is a much warmer lead that one you get from a lead generator like All Property Management. High conversions with colder leads means you’re doing something right.
Each situation is different. You know what kind of numbers make you feel good. If you’re curious about the industry average, it might be a conversion rate of about 30 percent. But it’s tough to rely on that number because there’s so much more involved. Even if you’re converting 30 percent of your leads – are you satisfied with that, or do you want to close more?
Here’s something to remember, however: Don’t put resources into lead attraction until you’re confident you can close them with a consistent sales system.
Lost Opportunities and Unasked Questions
There are a lot of other problems that lead to leaks in the funnel. Response time is huge, for example. If a lead comes in and sits in the funnel too long, they’re going to leak right out.
Maybe you’ll have a great first call but then you can’t get that lead back on the phone to follow up. What went wrong?
Are you making it easy for people to sign a management agreement when they’re ready?
It all comes back to systems.
A big part of the process is asking the right questions. You have to identify the questions that aren’t being asked.
You need to listen for that one pain point that the owner is asking about but maybe not really asking. If you can identify the real struggle, you’re going to be more effective at moving that lead forward than if you simply dump a bunch of information on your lead about your company.
Respond intentionally and make sure you’re tracking each interaction. Use that one pain point or that important question in all of your follow ups.
Tracking your process is critical. Whether you’re using a spreadsheet or a program like LeadSimple, make sure you’re clicking off each milestone that’s reached in your sales process. It will show you exactly where things may be leaking or getting stuck.
Use this information to nurture the lead back into contact with you. If you can see where they’re falling off or which stage is leaking, you can plug that leak. We call it active nurturing.
Sales Process and Staff
There’s a trend lately where different stages of the sales process are farmed out to different people. Maybe the introductory call will be made by a junior sales person, and then it goes off to the closer. Or, the most experienced person will start the process and then hand it off to a person with less sales experience once it looks like it’s really going to close. Is this effective?
There are different theories on this, and there can be leaks whether there are several people involved in the sales process or just one. It is important to have the BDM fully engaged throughout the whole sales process. If you have someone dedicated to this role, they should be present from the first conversation to the end. If you have more than one person working the sales process, however, it’s even more important that your system is crystal clear and followed.
In an attempt to prevent leaks, you can create more leaks if your process isn’t in place.
If you’re a property management company without a sales department yet, your first step is to build the process. Systems are important. It doesn’t have to be perfect. You’ll learn as you go. But, you need a system in place that you can follow so you know what should happen and when.
Make sure you have CRM as well. There’s too much to keep in your head. If your goal is to scale, you want to have a teachable and traceable process.
Final Takeaway to Stop Your Property Management Leaky Sales Funnel
What you’ve learned today is that to prevent a leaky sales funnel or to minimize the impact of a leaky sales funnel on your property management growth, you need to look at your process and you need to think big.
For more information on how to identify holes in your sales process, contact the team at RentScale. And if you have any questions about this podcast episode or your property management marketing, contact us at Fourandhalf.