Property Management Success
00:14:19 · Tony Cline
[00:14:19] S0: Yeah, I think let's just keep going. Let's keep going with it.
00:14:22 · Casey Howe
[00:14:22] S2: Yeah, so it's interesting. You know, when I came into this, Tony, I I came in with this, and I'll be honest, I came in with a little bit of a chip in my shoulder just because before I was in the industry, I did a little bit of research locally, and I just wasn't impressed with what I saw. You know, like I said, people weren't answering the phones. It seemed like technology was outdated, customer service wasn't really good. And then I went on to some of the boards and stuff, and I have some stats to share with you. I went on to some of the Facebook groups and things like that. It seemed all anyone, either people weren't paying attention to anything, or they were only focused on like internal things. What technology am I using? Should I get a virtual assistant? Should I do this? Every conversation it seemed like within the management space was really internally focused, right? So I came in with this chip on my shoulder, which which served me well in some cases, but it hurt us too, which was it was almost like arrogance to an extent where I'm like, I don't feel like any of these guys know what they're doing. And and so it because no one's listening to their clients and no one's selling very effectively. They're all just sort of focused on like profit per door and stuff like that. And so I came in and I was really just focused on growth, but it turns out I should have listened to some of my peers that are smart about you know, operations and numbers and things like that, because I grew a business that turned out to be very slim on margins and not as efficient as we could be. And so I think the lesson it took me five or six years to learn was like, well, I probably should take some of those things that like Profit Coach is talking about and you're talking about, and the you know, the profit per door and uh fee maximization, there's all these things. I I need to do some of that stuff because we have to build a business that's profitable. And so, you know, if if on one end of the spectrum you had where I was operating, which was like sell, sell, sell, sell, and like keep clients happy, happy, happy, and the other end of the spectrum is like, let's have a hundred doors that generate $500 per door per month. Um, I I've I've migrated more, I think, towards the middle than I was, but that was a hard lesson to learn.
00:16:27 · Casey Howe
But you know, the interesting thing, when I went out and looked at it, so I actually had Claude, AI, do this right before our call because I was curious. And and and I'm it turns out I'm right. So the property management space, 75 to 80 percent of all posts, according to Claude, in groups like Facebook and things like that, are internal focused, things like profit, per door, efficiency, how do we use AI in my company? And only 20 to 25% of things are external focused, like how do we client satisfaction response times, things that make clients happy. If you look at other high growth industry, healthcare is roughly 50-50, SaaS is roughly 50-50, and fintech is actually reversed. FinTech is 70% customer experience, clients, how do we keep them, how do we sell them, how do we make them happy? 30%, how do we make our business profitable or run more efficiently? And so I realize this is a bit paracadoxical, my my statement, but I came in way too focused on clients and not enough focused on profitability. That's because I think the industry is way too focused on ourselves, it's very insular and not focused on our clients enough. Um, what I've learned is I need to focus more on that, but I stand by my assertion that the industry needs to focus more on client success and listening to our clients and things like that. And so uh, you know, where that intersects, Tony, I think it there's it's very clear to me now. It's it's where that intersects is the ideal customer profile. If and you and I talked a lot about this, and to your credit, and I love the way I think you're the one that said you look at it like a bullseye, where it's you've got your bullseye. That's your thought. So I don't, I'll give you credit. You and I had that conversation eight, eight or nine months ago, and it really resonated me where it's like, well, if if you're really going after your bullseye client, which for us, by the way, is an investor with between either 20 to 50 units or a 20 to 50 unit building. That's ideal. That's it's if if we're going after that and we get some stuff on the side, we know that's gonna be really profitable business. We know for us, based on our operating model, we know we're gonna make them very happy and they're gonna, we're gonna retain them. And sort of, so all those other metrics that we have should flow downhill from focusing on that ideal customer profile.
00:18:33 · Casey Howe, Tony Cline
So I do think that the ideal customer profile is a way in which managers can singularly focus on like one big idea that nicely ties in profitability with creating a really great client experience. [00:18:44] S0: Okay, I want to I want to comment on that just a little bit. Uh appreciate you giving me credit for the ideal bullseye, ideal customer profile. But every time I hear ideal client profile or ICP, it reminds me of Insane Clown Posse. And it's like, that's not a part of our business. But um, I actually rephrase that and it's intentional because I don't want it to be our ideal client. For me, that's our target client profile. That's the target, the center of the bullseye. I want our whole company always focusing on being very selective on who we attract, but also what we build. And so I just sort of uh I won't say I coined the term, but I I am very intentional about using that because I think it makes a difference in the language that we use with our clients and with our internal team. And of course, I'm not telling our clients that they're our target client, but I am telling our internal team that that's what we target. And everything we do is built around that particular profile or of that individual, that property type, that income type. And so all of that goes into that bullseye.
00:19:59 · Casey Howe
[00:19:59] S2: Tony, I would go, I think you're absolutely right. I'd go one step further. I do tell our clients, like if I'm on a sales call that they're our ideal customer profile. And and the re I don't say those words, but I say, I say, you know, this is very much a two-way conversation. I'm just ad-loving, but you know, this is a two-way conversation. You know, it's it's great to speak with an investor who is you know investment-minded, they're willing to invest in their property, they value, they understand that keeping tenants happy is is good for you too, and those two things aren't mutually exclusive. It's refreshing to speak with you. This is a two-way interview. I I can tell you, we would very much enjoy working with you, and I I think we do a great job for you. That resonates with them. They like that. You know what I mean? It's yeah.
00:20:40 · Tony Cline
[00:20:40] S0: Yeah, I love it. Okay, so so we focus on our our target client profile. We figure out who that is, we start communicating that internally and externally, and then you you leverage that. You went from zero doors to 200 doors to now you're you were up over a thousand or around a thousand, now you're back a little bit, but you're more focused on 750 now, but more profitable than we were. Yeah. I think this is one of the challenges that I when I'm working with clients. Uh well, you mentioned something earlier about the the hundred door and a thousand door. And I want to just comment on this. I get to see inside a lot of different businesses, and we get to look at the financials and see where the profit's coming from. And there absolutely are companies out there that are operating at a hundred doors that are more profitable than companies that are operating at a thousand doors. And it comes down to your staffing, your pricing model, the type of investors you're bringing on. And I know accidental landlords get kind of a bad rap because they don't know what they're doing. They're making a lot of decisions emotionally. And I'm not saying that there's one client base that's better than another. It's find what works for you that you enjoy working with. But oftentimes people will say, I want to chase the investors. I want to go after the people that have the 30 to 50 units or 200. Units or whatever it is, but your profit per door goes way down in general when you're bringing on, if you go after an apartment building, if you have, let's just say we're bringing on 10 units, if we brought on 10 single family homes, the rent is typically higher, and you're typically able to get a higher percentage or higher management fee. And if you go after a multifamily unit or building, typically you're gonna have lower rents and they've negotiated a lower management fee. So I'm not saying that one is right or the other, but they are different and we have to look at it differently to see where that profit's gonna come from. We have to build our income and revenue streams differently for each one of those models in order to not maximize the profit. I'm not, I'm not a person that says we need to squeeze a nickel out of somebody just because we can, but I am a true believer in we need to maximize the value we deliver and then be appropriately compensated for that value.