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The Five R's of Owner Retention

Studies conducted by the U.S. Small Business Administration and U.S. Chamber of Commerce have found that acquiring new rental customers can cost as much as five to seven times more than simply retaining existing customers. The fact that customer profitability tends to increase over the life of a retained customer is added incentive for businesses to allocate more resources to sharpening their customer retention strategies.


Attrition of owners can costs us not only the sales associated with their home, but also the clientele who frequented their home. After finding a house that works for their needs, renters often rebook the same home each year. We may want to shed some of our lack-luster homes or for that matter difficult homeowners, both of which cost us time and money; however, it would be best if the attrition was one of our choosing.

Why do owners leave? Generally, for the same reasons customers leave a business. According to research, the three reasons customers may leave you include:
  • 68% leave because they are unhappy with the quality of service they receive (or didn't receive).
  • 14% are unhappy with the product.
  • 9% decide to use a competitor.

How do we stop attrition? Of course some factors are market dependent such as competitor's commission rates and bidding practices; however, if we can prove ourselves as the agency of choice then overcoming these factors will be easier.

Developing strategies around five solid principles of retention will help curb the flow. I call them the five R's of Retention:
  1. Refine
  2. Recognize
  3. Relate
  4. Respect
  5. Respond
1. Refine
What differentiates you from competitors? Know your costs, strengths, weaknesses and adopt business strategies that will create win-win partnerships with your owners.

Determine what you want to be known for and stay true to your vision. If you want to be known as fair and straight-forward, do things like reducing owner fees on services that you've managed to reduce costs on instead of pocketing all the additional savings. These types of actions help to not only build trust with your existing owners it will encourage them to tell others and soon this strategy will turn into additional business.

Do some extra research and find ways that you can further assist owners by strengthening the positive differences between you and your competitors through the services you provide. Sometimes this means abandoning an operational procedure and adopting one that may be a tad more difficult but it builds on the differentials and defines your company in the market place.


2. Recognize
Do you really know what your owners' expectations are? Of course they generally want more income and a well maintained home, but what about their individual motivations? Expectations can be very individual, such as catering to an owner who wants their pillow shams facing a certain way, or being available for an hour-long conversation when returning to or answering a call from an owner who simply enjoys talking.

Once you take the time to recognize what is important to each of your owners it is easier to accommodate their expectations.

We have all been there: The sales person made it sound great in the store, but once we got the product home it did not perform as we had heard it described. By taking the time to understand what is important for each homeowner you'll be able to set realistic standards and create an understanding of what is feasible in terms of service and product delivery. Systems and tools exist to help you manage owner preferences and many property management software systems provide a place in a reservation folio where special requests can be entered. When booking owner reservations or seeing them come through from your online service, enter your owner's preferences as a special requests so that staff are reminded of how to take care of the owner upon arrival. Knowing what is important to each of your owners will go a long way in meeting or exceeding their expectations.


3. Relate
So what are your and your owner's shared values? Cultivating shared values means taking an interest in your owners. Use information you learn while talking with them to strengthen your relationship. Continue to build trust through the actions of you and your employees.

Bring them into your daily world through regular communication and relationship marketing. Whether via an email newsletter, a monthly flier, a reminder card for a tune-up, a birthday card, or a holiday greeting card, set up a system for reaching out to your owners.

Dedicate time to create and maintain a database of contact information, including phone, email, and snail mail addresses. Social media is a powerful tool--consider using private Facebook groups and Twitter to share what is going on with your property and encourage owners to participate in sharing. You may use incentives such as free owner cleans for activities like owner photo-posting competitions or other incentives to encourage regular participation.

People do business with people and a company that they trust and that meets their perceived values and this includes liking the people they deal with. Staff plays a key role in whether an owner feels their values are being shared. Careful selection of staff that owners come into contact with as well as generating regular communication will help build owner confidence and loyalty.

4. Respect
Is your program homogenized? Larger companies tend to have a harder time differentiating their services. Proper computer programs can assist.

At the end of the day, the property belongs to the homeowners and a great deal of respect for their wishes and directives goes a long way in retaining their business.

Trending today is the ability to control the services or products we purchase. From personalizing a running shoe that is just right for us to choosing our seats on an airplane we each want to be in control of our experience. This control poses a challenge for us property managers because it is much easier to make decisions on rates, guest service features and maintenance repairs without involving owners.

However, we must not forget that it is their home, their mortgage and we should give them the courtesy they deserve by listening to them. Survey tools can assist gathering each owner's thoughts and opinions, gauge reactions to implemented changes and promote a feeling of good will and partnering. Sometimes respect means that you maintain a good relationship with an owner after they decide to try a competitor for a year--helping them with the transition may not change their minds; however, it will go a long way in promoting good public relations and might make you their first choice if their switch does not work out.


5.Respond

How do you measure the effectiveness of your relationships? Do you know how your owners really feel about you, which owners may be leaving you soon and why owners have left? Being responsive means immediately acknowledging the owner's request or challenge and communicating your actions throughout the duration of any issues that arise until the issue has been satisfactorily resolved. Email groups and messaging systems that automatically acknowledge that a message has been received are a good way to build confidence with an owner. Pay attention to what your customers want and make their issues your issues--be proactive in addressing them. Isolate looming potential issues and fix them before they become problems.
Businesses that excel in owner retention are usually positioned for long-term success and possess a far greater edge over their competitors. We do property management, but we are in the relationship business. Working with your owners and being willing to develop long lasting partnerships isn't easy-- but then if we wanted easy we'd work for a hotel with a single owner versus managing homes for a multitude of owners!

Comments

 
By: Jodi Refosco
On: 08/26/2014 19:09:31
Thank you for sharing - this article has a lot of very nice points to remember and to take note of.

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