Australia has a proud history of home ownership. But as the cost of living has increased over recent decades, and property prices have sky-rocketed, while salaries have not kept pace, we have produced a generation of people who may struggle to ever own a home.
Property management has become the bread and butter of many agencies — a stable source of reliable revenue that can keep a business afloat in times when a more challenging market does not provide the sales volumes it did in the past.
In this month’s CEO discussion piece, we dive into agency life, hierarchy and pecking order to determine if we are creating a culture that places more emphasis on sales than property management, and in doing so, reduces our capacity for lead generation.
If you are a property manager or a sales person who wants to bring in more leads, this is the article for you.
Recently, I heard a story from an associate about her visit to a regional real estate office.
She had an appointment with the director at the office, and though she’d arrived on-time, she’d been sentenced to wait in the reception area.
In another room, out of sight, but clearly in ear-shot, she could hear a voice that sounded irate and aggressive. Two other voices, belonging to the owner and a property manager, were trying to calm a situation with a disgruntled tenant who hadn’t paid his rent.
Hearing this story reminded me property management can be a scrappy sport. PMs work tirelessly to keep managements filled, retain great tenants, and tick all the regulatory boxes required. They also often face the wrath of tenants who haven’t done the right thing or whose personal circumstances have changed.
But why did I need to be reminded of this? Why, when I looked through previous articles, did I find so many pieces focused on sales agents and issues relevant to that side of real estate? And WHY, when I looked around an industry abundant with ‘coaches’ and ‘gurus’ did I find very few who come from a PM background?
Why are the people who are seen as the most successful or prominent in our industry so rarely people who cater to the third of the population who rent rather than purchase? And how does this effect agency culture and business growth?
Unfortunately, the answers may be obvious.
We place more emphasis on sales because it generates large lump sums of revenue. We do it because sales agents often need to work hard to build ‘bigger than the brand’ profiles so they can win more listings.
In multi-service agencies, property management is not often seen as a star, but as the ‘first lady’ of real estate — the stable and reliable workhorse that toils away quietly in the background, often keeping the show running in the tougher times.
And while we all may question why property management is not always viewed with the same value as sales in our industry, I think the real question is, what if it was?
What if we built cultures within our agencies, and in the industry as-a-whole, where property management was more often given the affirmation it deserves? What if hierarchies didn’t separate sales from PM as though one was more crucial or important?
What if, instead, the two worked together much more cohesively, to create a conscious and deliberate sales funnel built on solid client relationships generated by years of quality property management?
If we all did this effectively, perhaps we would have a lot more agencies paying a lot less to external lead generation companies, because more of their leads would come from internal sources.
Building a culture of equal value
Changing a culture in an agency is a notable challenge, let-alone in an entire industry.
While there are many aspects to getting this right and many different people and departments required to play a role, there are a few areas that can be focused on in order to promote and foster change.
The role of leadership
A cultural shift always needs to be top down, bottom up — it needs to be actively led by those who run the business, and welcomed and embraced by those who come under them.
Leading a change that makes culture less hierarchical by department, largely means showing all teams they are genuinely, equally valued by those at the top.
It can be difficult to work out exactly how to do this.
In some cases it can be as simple as showing other agency staff that everyone is equal by ensuring leadership regularly takes an open interest in property management work and its people. Leading by example can be very powerful.
It also means celebrating the victories of all teams.
While a sale is a sale and it is easy to see — in a big lump sum — how it will positively affect the business, other victories are quieter, but no less impressive.
It’s important not to forget every day your property managers fill listings, they are effectively generating steady income for the next six months, 12 months or more.
Leading a business that acknowledges milestone growth in managements or revenue from PM, as a simple example (as opposed to only noting when there is a decline), and celebrates the individuals and teams behind the victory, can convey to both PMs and sales that every part of the business is equally important and has a role to play.
Likewise, investing in the development of PM employees so the area becomes a coveted career path just like sales often is, can completely change the way different departments within a real estate office view each other.
And while much of this may seem to relate only to medium and larger agencies, it is often also clear in smaller agencies which department is most prominent.
Is it possible to lead a change that affects departmental equality in real estate? Would it be beneficial?
The role of relationships and communication
In real estate we say the word ‘relationship’ a lot. At EAC, we’ve published several articles focused on client relationships over just the last few months alone.
But what about internal relationships? What about how different people and different departments communicate with each other, respect each other and work with each other for the greater good of the entire business, rather than for personal gain?
Relationships within a business are just as important as those with people and organisations external to an agency.
Property Management expert and EAC director, Elizabeth Sargood recently noted how much the market has changed and how this has affected internal relationships between PM and sales in larger offices especially.
She alluded to the segregation that sometimes occurs between property management and sales within medium-to-large agencies, and how, with the change in market, suddenly there is a shift: sales agents are relying much more heavily on property management to provide leads.
But what if those relationships are being called on now when needed, but haven’t been genuinely nurtured in the past?
“The property management team is literally physically separated from sales in our business,” says a PM from a renowned Sydney-based agency group. “We are on one side of the building and they are on the other. The only time they talk to us is if a landlord is looking to sell, or if the sales agent needs keys to show the property. We receive a referral ‘bonus’ for PM clients who go to sales, but the bonus is lower than that for sales people who refer clients to each other.”
Investing in a culture of equality in the good times, means those real relationships will be there in the tough times, and agents of different departments will more organically and actively help each other.
There is something to be said for the power of communication, for the ability to have a genuine and friendly chat and to take interest in the person you are speaking with. In fact, it is one of the foundations for a good relationship.
Natural conversation is also one of the best ways to share knowledge you may not know you have or you may not know is valuable. It can be a great way to trigger a sales strategy or lead opportunity in a person who thinks differently than you do.
If separate departments within ONE business are only communicating on an as-needs basis, there is potential they are missing out on vital and valuable knowledge that could win business, or evolve their processes so their lead generation strategy could be more efficient.
Is there a way we can break down this wall — physical and emotional?
The bottom line
As agents and other professionals in the industry, we talk about the market so often. We talk about the industry, clients, legislation and so many other things that are influences on our business and success, but are actually external to our agencies.
Looking internally is just as important as what happens to us and around us — and our internal culture, relationships, communication, business structure and leadership are much more in our control than external factors.
Some agencies get things so right when it comes to these internal building blocks. But with such a long history of looking out rather than inward, and not deliberately building culture, others still suffer from the side effects of structures with a clear line drawn right down the middle, sales on one side, property management on the other.
As the industry changes, consumer demand evolves and we are challenged to focus on more genuine and long-lasting relationships externally, doing the same internally might be exactly what we need to ensure our longevity and to secure the future of our businesses. What do you think?