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Property managers should seize the opportunity to discuss value when clients challenge them on their fees, two leading trainers believe.
According to a recent RPM poll, 28.9 per cent of respondents said the most common objection they face as a property manager is clients negotiating on management fees.
PPM Group managing director Debbie Palmer said that property managers shouldn't try to overcome fee objections simply by lowering their fees.
“I am a passionate believer that property management agencies that negotiate on their fees do so because they don’t believe in their service offerings,” she told RPM.
Ms Palmer noted that agencies that want the best possible fee must offer more in service delivery, communication and value-added services.
“Instead of negotiation on the fee, you could look at value adding, such as no advertising or let fee for the first time, complimentary landlord insurance, first two months free, or six per cent for the first six months so we can prove our services and then the fee increases to eight per cent,” she explained.
Ms Palmer suggested asking clients what discounted agencies are prepared to do for their fee and then highlight the differences in service.
“You need to know the answer to these questions: Why should I choose your agency? What do you do differently? How can you increase the client’s income and optimise their capital growth?”
BDM Academy director Tara Bradbury said many investors negotiate because they’re well educated and have a preconceived idea of what a property manager is worth.
“It is our responsibility to ensure we explain our value and have the entire team on board,” she explained.
“Know what makes your agency unique and how each team member can make a positive impact on the client.”
Ms Bradbury said initial conversations are a great opportunity for property managers to listen closely to clients and learn about their experiences.
“This is the time when you can find out the fears they have behind investment property ownership and share how your agency can help reduce any risk,” she said.
[Related: When was the last time you upsold yourself?]
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