Innovative Pricing Strategies to Grow Your Property Management Company
Today, I’m talking with a special guest, whose background ranges from building beverage distribution networks in Minsk to selling property management software, to know running the largest marketing agency in the property management industry.
Today, we’re going to be talking about how to rethink your pricing strategy to help you stand out in the market, increase your profits, and grow your business.
If your current pricing doesn’t have much strategy behind it, then this is the episode for you.
- (02:04) – Pricing
- (02:52) – Alex explains why pricing matters for property management companies.
- (03:04) – It’s the most important lever for controlling demand.
- (03:43) – For the consumer, pricing is often the first criteria for making a judgement on quality.
- (03:55) – Using competitive pricing to increase leads.
- (05:23) – Alex and Jordan show how to turn a question on fees into a discovery process with a mock sales call.
- (06:11) – Answering the initial question with a percentage range.
- (06:11) – Proceed to qualifying the caller with introductory questions.
- (07:59) – The importance of connecting and building relationships.
- (10:14) – Discussing the various pricing strategies seen in the marketplace.
- (10:35) – Three-tier pricing plan.
- (12:10) – Discussing if companies are using this strategy.
- (13:36) – The potential problem with this pricing model.
- Paralysis by analysis.
- (14:38) – Jordan and Alex discuss concern over swapping out a leasing or management fee.
- (15:13) – Alex’s response to this concern.
- (16:47) – The variability of services that can be provided in a three-tier model.
- (17:32) – The concept of ancillary fees or value-add services.
- (17:35) – Why property management companies need to consider their pricing carefully.
- (10:35) – Three-tier pricing plan.
- (02:52) – Alex explains why pricing matters for property management companies.
- (25:24) – Commercial Break for the PMGrowSummit.
- (26:25) – Alex gives five reasons to attend.
- (27:20) – Doubled the speaker budget from last year.
- (28:22) – Luxury venue with wifi.
- (28:57) – Hands-on workshops.
- (29:19) – All-inclusive experience.
- (29:56) – Major networking opportunities.
- (26:25) – Alex gives five reasons to attend.
- (32:12) – The ‘Good, Better, Best’ Plan.
- (34:26) – How to build a bridge with landlords using trust and transparency.
- (34:51) – Discussing the details of the ‘ridiculously low’ plan.
- (39:01) – Segmenting value, not losing money.
- (39:46) – Ensuring you don’t cannibalize your fairly priced services.
- (41:40) – Paid Consultations.
- (42:35) – Why Alex feels this is an opportunity for companies, and if he were a property manager, how he would put this in place.
- (45:29) – Alex discusses why this option needs fairly high traffic.
- (46:15) – Jordan explains the difference in perspective between a paid consultation as a lead generator and a conversion component.
- (42:35) – Why Alex feels this is an opportunity for companies, and if he were a property manager, how he would put this in place.
- (47:15) – Guarantees.
- (47:30) – Discussing the various guarantees that a property management company could offer.
- (47:30) – Pet guarantee, tenant guarantee, home condition guarantee.
- (47:48) – Discussing the details of a home condition guarantee.
- (48:20) – The two concerns of every homeowner.
- (48:29) – Is my home going to be damaged.
- (49:00) – Can I get enough income to cover the mortgage.
- (48:20) – The two concerns of every homeowner.
- (51:53) – The perspectives of service and empathy as they relate to guarantees.
- (47:30) – Discussing the various guarantees that a property management company could offer.
- (56:44) – How much is too much to pay for a new property management contract?
- (58:53) – Who do you learn from?
- (1:00:29) – What books have impacted you?
- (1:01:08) – What’s the number one thing you see property management companies doing wrong when it comes to marketing?
- (1:03:23) – Are entrepreneurs born or bred?
- Clayton Christensen “Innovators Dilemma”: Resource for understanding the effects of disruption in a marketplace. (40:57).
- RentRange: Tool for rent comparisons and rental estimates that Alex recommends using. (43:11).
- RentFax: Tool for rent comparisons and rental estimates that Alex recommends using. (43:11).
- Mixergy Podcast with Andrew Warner: Resource that Alex gains insights from. (58:57).
- The Art of Charm with Jordan Harbinger: Podcast that Alex learns from. (59:29).
- The James Altucher Show: Recommended podcast from Alex. (59:58)
- Gary V: Source of inspiration for entrepreneurs that Alex recommends. (1:00:17).
- Steve Rosenberg: Example of a real estate success who drives his leads organically. (1:02:52).
- Brad Larsen, Property Management Mastermind: Podcast that both Alex and Jordan endorse and recommend. (1:06:06).
Where to learn more:
Jordan: 0:00:03.5 Welcome closers. Today we have another episode of the Profitable Property Management Podcast coming at you. This is season one on marketing. I’m your host Jordan Muela, and every week I interview world class property management entrepreneurs and industry experts who share actionable insights to help you grow your property management empire.
Whether you manage 100 units or 1000, this broadcast is designed to help you see the big picture and give you the tools and tactics you need to get to the next level.
0:00:32.6 Today I’m talking with a special guest, whose background ranges from building beverage distribution networks in Minsk, to selling property management software, to know running the largest marketing agency in the property management industry.
Yes, I’m talking about my good friend and brother from another mother, Alex Osenenko. Today, we’re going to be talking about pricing in the context of positioning, which is a key aspect of your overall marketing strategy.
I will leave no stone unturned as I attempt to pierce the mind of a master marketer and tease out some useful insights for you my dear audience.
0:01:10.8 Alexander, are you ready to get this party started?
Alex: 0:01:14.3 Yeah and Ose is here and Ose is on. I tell you what, Jordan, that was, that was an awesome intro. I appreciate all the titles you bestowed upon me. You know, I’m just going to try to be as helpful as possible with the last ten years spent in property management industry.
0:01:37.1 Whether it’s, you know, figuring out operational software and helping property managers get more efficient from that perspective or figuring out how to pre-sale. Everything from demand generation to you know, signing a property management contract and then figuring out what’s that worth.
0:01:55.3 Yeah, so I’ve seen a lot. Hopefully I’ll be able to talk intelligently on some of the topics that you mentioned.
Jordan: 0:02:04.8 I hope so too. My man. Today we’re talking about pricing. Which is actually something that you have some passion about. Pricing is maybe what some would call a graduate level consideration.
Pricing tends to start on the operation side, as like, “Hey we’ve got to charge something, let’s just kind of slap something up and figure it out.” 0:02:25.7 Eventually, as a company involves the considerations of marketing positioning involve – pricing becomes at the forefront when it relates to the overall perception of your company.
And some of the nuance, some of the finer issues to it – do I put it on my website? Do I put it behind? Do I have one – do I have a – I’ll go flat fee, or is it a percentage? Do I have a multi-tier option or a single option? There is a lot of nuance and I want to dive into that today.
0:02:52.3 But I just want to start here. Why does pricing matter from your perspective? What is the opportunity related to carefully and thoughtfully thinking through your pricing as a property management company?
Alex: 0:03:04.3 Well I think it’s the most important lever as a business owner for you to be able to control demand. A lot – price, you know, not always connects with value and as business owners, our job is to, is to be able to deliver value. Right? For the price that is fair and you know, you can make profit in the business.
03:43 But for the consumer, sometimes, price is the sort of the first visible thing they’re going to judge a business upon. 0:03:48.0 So, it’s worth a lot of experimentation, exploration, discussion, and research.
0:03:55.3 And I think, again, you know, if there’s – if there’s nothing happening with your business, if there’s no leads coming in, if you’re absolutely like – your website is number 5800 on Google, there’s still one thing you can do. You can work with pricing and get some of the, get some of the people to look your way because you’re priced differently. How ever your value is packaged, it is priced very appetizing for the consumer.
0:04:26.8 And you will eventually start getting calls and beating the competition as you progress through your marketing. But pricing is that lever.
Jordan: 0:04:33.2 You’re absolutely right. And you make a really good point. If we think about Maslow’s hierarchy of needs, this triangle – in terms of the mind of the consumer orientated towards the perception of the value of the company, it really can get distilled down to price.
0:04:49.9 Nobody wants to hear that, but implicitly, we all know if we’re going to say, “Well what’s the first thing a consumer asks you” it tends to be, for better or for worse, “What do you charge? What is the price?”
0:05:00.9 Now is that the only level on which we want to have the conversation? No. But it is where many consumers start, so it is an opportunity for meaningful differentiation.
0:05:09.8 Let’s talk through some of the different models of pricing. What are the different buckets of pricing strategy that you see property management companies putting in place?
Alex: 0:05:21.2 Can I take a step back for a second Mr. Jordan?
Alex: 0:05:23.7 I want to, I want to qualify one thing and give our audience, your audience, our audience, a context here. When you say this is the first thing – and I think, you know, the first thing that we hear a lot of times when we pick up a sales call is, “What is your fee?”
0:05:41.0 I think it’s important to stop here for a second and show the audience how to turn this question into a positive conversation before we go on to the pricing modelling. Right?
0:05:51.2 So, if you have to combat some of the low or flat fee, or you are the low fee, in either case, you should answer the question in a way that is the following. Go ahead and ask me Jordan.
Jordan: 0:06:05.0 Ring. Ring. “Hey, first question before I hear the pitch. What do you charge?”
Alex: 0:06:11.2 “So, I’m glad that you asked Jordan, so our fees range from 2.5 % to 8.9% depending on the needs of your property. Depending on a couple of different factors. Depending on what kind of rent we can get you.
Can I ask you a few questions about your property? Tell me a little bit about yourself and how you ended up being a landlord or investor.”
Jordan: 0:06:34.6 “Boom. You got me. I’m going to answer a couple of questions. I still want my answer, but if you’re framing it as, you need a couple of simple answers for me to be able to get my simple answer back in response, I think that’s reasonable quid pro quo.”
Alex: 0:06:51.5 Yeah, the simplicity here is, you give them a range and you pacify the question. Because the range sounds really attractive, so they probably have looked around before, and there’s probably somewhere between – I said 2%, but it’s somewhere probably 6% and 10% out there in the wild. Right?
0:07:07.9 You just gave them a range that definitely qualifies you as someone they can do business with. Now you have a chance to qualify them, right? And make sure it’s the right owner for you, number one.
And number two, you can sell your services to them and you can solve their problems. 0:07:23.8 Because here’s the challenge here – not the challenge, the opportunity. Jordan, nobody listens. Nobody gives a shit these days. For the – for your own concerns as a consumer.
Like when was the last time you had a sales call, like honestly think about this – when was the last time, Jordan, you had a sales call, when somebody heard you all the way through and basically put together a solution only after hearing everything you said? Give me one time.
Jordan: 0:07:50.9 Man, you’d have to give me more time than we have in the podcast here. To figure out when that was, because it’s been a long time.
Alex: 0:07:59.7 I’m telling you Jordan, this is what’s happening out there. It’s the world of high-octane sales people who are set to hit quota, and it’s bang, bang, bang, thank you ma’am. Nothing is, you know, there’s no connection, no relationship built out there.
0:08:20.5 I’m sure there are great sales people out there, but they are a minority. And they’re making a killing. These guys get promoted into management as quickly as possible. And then so, again, we’re left with people who just – too in love with themselves speaking to do a proper – to do justice to a sales call. 0:08:40.9 [Inaudible] for that deviation.
Jordan: 0:08:44.1 It’s really helpful to go over man. I would say the last time I experienced that – I can’t think of a specific interaction, but I know what it was. It was in the context of a high dollar, high value purchase. Luxury tends to be custom. The more money you pay, the more custom tailoring you get. But the work thing is that listening is – what does listening cost Alex? It’s free.
Alex: 0:09:01.1 Well, it costs time. In reality. So you think about this. It does cost time. So, and time is the single most important commodity we have. In fact, people are ready and willing to spend money to save time.
Look at all these softwares right? Look at the Silicon Valley right out of my window. All these people are humming for one reason: To save business owners, to save individual consumers time. Because time is that single commodity that you will never get back.
0:09:31.6 Like, I see the timer on our recording ticking. 9:33, 9:34. We’re not going to get that back. So it better represent right? We better make our time worthwhile.
But, but having said that, investing time in the relationship is what is going to reward you with the sale. Is going to reward you with a successful client relation that is going to stay with you for a long time. And it’s a worthy investment in my opinion.
Jordan: 0:10:00.6 Absolutely it’s a worthy investment. Relative to all the other things you could spend money, customer acquisition cost, marketing campaigns – time, listening, empathy are great expenditures of your marketing budget and additions to your marketing arsenal. 0:10:14.6 Circling back to the pricing strategies. Walk me through the buckets of pricing strategy that you see companies employing in the marketplace.
Alex: 0:10:25.5 By the way, you’re – yourself is pretty good at it, so please feel free to pitch any time, interrupt.
Jordan: 0:10:30.9 You know I will! You know I will brother!
Alex: 0:10:35.0 That’s my zoop. Alright, let’s talk about it. So for you to be able to – and the only really true way to turn a pricing question without being sleazy, shady, or insensitive is to have a range.
So how do you get a pricing range? Well, you have to have a different plan that suits a different type of consumer. Ok? And if you look at your own portfolio, you can say, “Ok, well, all these – like, my top 20% of the clients make me 50% of the money. Or 80% of the money.” That’s great. And those are the ones that are the most valuable to you.
0:11:16.8 But what about the other, you know, let’s say the middle 40%? 40-50%? The bulk of your customers who may not be as profitable as the top customers, but they – they’re sort of the B players that make the reality. They make your business hum. Right?
So how can you get more of the B and A players and reduce – remove the C players? 0:11:37.8 And so you have to create plans that are very appetizing for the, maybe C going on to B. Definitely B. B should be your strongest plan, and then A should be your luxury plan. Or not a luxury plan, but kind of all you can eat plan for a high-flying investor who does not have time or you know, wants to trust you completely with everything. Full portfolio. 0:12:03.4 So, to sum this up. Three plans is the way to go. 0:12:09.7
Jordan: 0:12:10.9 So let’s talk about the status quo. If this is such a great idea, why don’t more companies do it?
Alex: 0:12:16.6 They do do it. They do do it. You know, and they’re winning. The ones that do, they’re winning. If you look at the landscape, and you know, I speak to hundreds – I’m sure you do as well. Hundreds, if not thousands, probably thousands every year. Like, literally personal conversations, reviewing their businesses, stuff like that.
You know, I’d say about 2% of these people, maybe 5% actually publish pricing on the website and about 20% of that 5% has the three tiered plans. And everybody in – and I’m going to make this statement now, 0:12:53.8 everybody that has those plans in place, I’ve found to be very, very successful. 0:13:00.9 Now, there’s no correlation. Like, it’s not they became successful.
Jordan: 0:13:04.4 Causation is not correlation.
Alex: 0:13:06.5 Exactly. But these guys have figured it out. Look at the successful companies out there. You know, look at what they’re doing and copy. There’s a lot of software startups and a lot of technology companies.
0:13:19.1 I’ll break this down in tiers. So, there’s some significant research has been done over the years, by multiple psychologists on pricing, price sensitivity and there’s this concepts like price anchoring and other things, but the three pricing tiers seems to be the way to go.
0:13:36.1 However, there’s also a problematic approach to it. A potential problem with it. Is analysis by paralysis or paralysis by analysis. 0:13:50.4 Right? You can’t make it too complicated. And that’s where the genius come from.
You have to sit down and spend days, and maybe even weeks, just looking at the pricing models. Read the pricing book, I’m going to put – we’re going to put the link in this interview. I can’t remember what the book is called [0:14:07.3 To Be Added].
I’m sorry, I didn’t pull it before the show, but it’s an excellent book on pricing. Everybody should read it. Right? And we’re going to link it out in the show. Hopefully I’ll send you the link once we’re done.
0:14:18.1 But do yourself a favour. You know, it’s the most important demand lever control of your business. And I think it’s worth the research.
Jordan: 0:14:26.9 So there are two things to say here. The first is that when you say it’s a demand lever, you can talk about it on the level of getting more or less customers, but also the quality of the customer, revenue, etc.
0:14:38.5 One of the concerns that I have with the tiered pricing model, and I saw this first hand, was a company that had a three tiered package model and the lowest tier still included the vast majority of the management services they provide, but at a very low premium.
0:14:57.9 Basically, what they were doing was swapping out the leasing fee or the management fee. The lower the leasing fee is, the higher the management fee is. Or putting that in reverse. Have you seen that before? Have you seen a company have that type of approach?
Alex: 0:15:13.7 Yeah, I have. But there’s one thing to consider. Right. So, if an owner comes to your property management company with a good tenant, presumably you’re doing a lot less work. If the owner is coming – and you’ve just taken over the property right. If the owner is coming to you with a vacant property that needs a lot of work to prep for rent, it needs a lot of work advertising and qualifying and placing a tenant.
That is cost to the property manager to be able to fill that unit, and also you know, you have to do it fast because the owner is expecting that tenant in there and paying rent. 0:15:49.9 So I think it has to do with the work load. Right? It is a fair assumption that you know, if I’m the owner with a good tenant, you know, I’m ok with a higher leasing fee because I already have a tenant. I’ll just want to pay less for management. Does that make sense?
Jordan: 0:16:05.2 You know, here’s the implications of that though. Over time, when you look at the unit economic implications of giving up on the management fee in exchange for the near-term revenue, that’s the concern. Right?
Because you can get a little – you can put the consumer in a situation where they were, they were pretty influenceable, and what you choose to do was willingly give up on the management fee, which is where you’re going to capture the majority of your revenue over the lifetime of the relationship. 0:16:34.7 So that was the specific issue with that pricing construct.
And the other related issue is what is the scope of services that you cram into each one of those packages. 0:16:47.0 So let’s talk a little bit about the variability of services that could be provided in each one of those tiers to make them meaningfully different. 0:16:55.0 This is part of a – this is kind of a follow up conversation to some of the things that we discussed at the most recent mastermind that we hosted in Mexico. 0:17:04.0 So talk me through how these packages, in terms of the services, can actually have meaningful differentiation.
Alex: 0:17:09.8 Yup. Good. Yeah, we did have a full on half a day session about pricing with our attendees and I think we’ve gotten to a very, very good place, although there’s probably a lot more that can be worked on there.
0:17:32.3 But, so I’m going to introduce a concept. People call it ancillary fees, I call it value add services. 0:17:35.3 So, as a property management company, you have to sit down, look at your portfolio again, look – review all the questions people are asking you – figure out what are the value add services I can connect with my pricing so I can have the lowest possible management fee, commission percentage-wise. Right? And be super competitive.
But I also want to deliver value to my customers on demand. 0:18:06.7 So that lowest package should be your bare bones basic service without any of the value add pieces involved. Right? And again, the value add needs to be – you need to put a value at price table for yourself.
For example, let’s call it a – one of the value add fees would be a pet – or pet insurance. Let’s call it ‘pet insurance’. A ‘pet insurance’ is not something that the homeowner needs, but it will help them rent their unit faster to potentially more qualified, responsible pet owner.
0:18:39.1 If you remove all pets and their consideration from renting an apartment, you’re going to stay vacant for longer. That’s a fact. Ok. That’s a fact. So, if the pet insurance is the value add in the middle plan, now the homeowner is assured that their property is going to be brought to the proper condition and you know, for paying the fair price for management.
0:19:04.4 So that’s a value add. That’s a value add for a homeowner and that’s easily explained. 0:19:08.0 Another one is, let’s call this a ‘home guarantee’ of some sort. Right? 0:19:13.1 If you guarantee a condition of the home, or guarantee a tenant, or guarantee a tenant in a certain time, those things help and those things are value add as sort of a protection. Right? Validation of how well you’re going to do the work. And those things, again, can be included.
0:19:34.6 Inspections. Right? If somebody is concerned about a property if you don’t offer a guarantee, or they didn’t buy a guarantee, they can buy individual inspection packages. You know, say “Look you’re on our lowest tier at 6% whatever percent, but we have a promotion running for the two inspection package that will set you up for the next year.” You know, let’s call it $150 dollars or something like that. 0:19:56.0 So you can do – you can introduce up sell opportunities. There’s just a lot going on here man.
This service is so, sort of broad. I mean, look at the – and I’m going on a rant here, but look at the auxiliary opportunities. Look at the real estate sales opportunities. What if you guarantee an investor that if they list with you, you’ll give them certain – like Redfin right? 0:20:21.7. You give them – you sell their home for a flat fee.
There’s all these other things that are potentially bolted on to the property management service that would be a value add as well as a huge opportunity for you as a property management company.
Jordan: 0:20:39.3 Sorry, had you on mute there. 0:20:41.6 . Alright, keep in mind Alex, that we’re editing this, so I wanted to just take a moment to clear into the fact that I want to talk specifically about the three-tier plan stuff that we talked about at the – that we talked about – I’m trying to send you an image here. Go to this folder.
Jordan: I’m dropping this in.
Alex: Did we go in a different direction than you intended to?
Jordan: 0:21:33.3 No sorry man, I just – this is not a big deal, I didn’t mean to kill the energy. But just open that up, I wanted you to have the same slides I’m looking at as I pull this. So.
Alex: Oh yeah, nice, nice, nice. Ok.
Jordan: 0:21:50.3 Good, better best. I want to specifically about what we might call an extreme pricing model, because we didn’t flush it out all the way, we just talked about it conceptually. We can talk about it on that same level here. Particularly that bottom tier, extreme light plan is of interest. So.
Alex: Extreme – wait, wait, wait. Extreme what?
Jordan: An extreme pricing model. We called it ‘Good, Better, Best’ but really it was like a light – that light plan where you’re charging whatever it is. $20 bucks a month.
Alex: Oh, you’re talking about – you’re talking about introducing the super light.
Alex: Hold on, let me try to surface that concept back in my mind.
Jordan: Do you see the picture though? It’s…
Alex: Let’s see, which one – I’m trying to see – what did we say we ..
Jordan: 0:22:41.2 Image – it’s image 0023. Lease up, rent collection, rent ready, consultation. What was 1099 fee?
Alex: He’s sending it 1099 to the owner for – because it’s a, you know, it’s a 1099 income. Rental income is a 1099. So it’s a tax service.
Jordan: Ok. Alright. You ready to kick it back on.
Alex: I’m still trying to figure out how to see this slide. Hold on. No I’m not ready. Rent versus sell. Ok, image. I was viewing this in a different way.
Alex: 23. Oh ok. Good light. Yeah, that’s extreme man, but let’s introduce it into the wild.
Jordan: Bro let’s take it all the way home. I want to talk about this and I want to talk about the comprehensive ROI analysis and consultation which is 0019.
Alex: Alright, let me pull them up then. Feel free to do more exploration with me on these things. I think you’re – I think as an interviewer, and I do the same, I think as an interviewer, I think we should be, you know, also flashing our own knowledge and our own sort of expertise, so don’t just leave it to me to define everything.
Jordan: Absolutely. I think that’s also just a prep issue. I’m trying to navigate the call. I was spending time trying to get to this and looking it up in the tabs in the background. So I’m ready to…
Alex: So you – I think I finished a pretty good wrap up on some of the concepts, but you go ask the next question, because I put a pause in there. You start. You start back up.
Jordan: 0:25:13.8 Alright. My notes. 0:25:24.6 [Edit] Folks, we’ve got a lot more to talk about, but before we go on, I want to mention our show sponsor. The PMGrowSummit which is happening at the end of January in 2018.
If you consider yourself a growth minded property management entrepreneur, if you’re interested in levelling up your sales and marketing game, if you want to go pro and network with the best in class entrepreneurs and stay on the cutting edge of the industry, you need to be at the PMGrowSummit.
We truly bring best in class entrepreneurs. And you can get your ticket now by going to PMGrowSummit.com and using the coupon code Jordan. J-O-R-D-A-N. Get $100 off your ticket.
0:26:05.7 Alex, why would somebody consider coming to the PMGrowSummit?
Alex: 0:26:08.7 Good question. So I read this ad on my show for the last, I don’t know, property management show for the last, maybe seven or eight shows, you know, I actually had to add ready – I could have read it myself if you wanted to.
I’ll give you five reasons, how’s that? Five reasons. I reason 0:26:25.9 [Inaudible]. There are zero reasons not to. The only reason you would not attend is if you’re not – if you’re not – if you’re at the level where you’re completely just starting out. You absolutely have no funds and every dollar needs to go into the marketing or some sort of growth. I’d say if you’re anything over, you know, 50-75 properties you’re good to go.
Before that, I think the concepts covered at the PMGrowSummit might be a little bit beyond foundational. And I think a lot of start up founders need the foundation, so I would definitely dedicated time to NARPM and NAPRM’s running their NARPM smart initiative. They have designations. I would spend my time building a foundation there before graduating to something like PMGrow.
0:27:12.9 Really advanced concepts. Advanced speakers. You have to kind of, bored them. And in order to bored them you have to have a healthy foundation.
0:27:20.5 But five reasons to attend for the rest of us. Double – we doubled our speaker budget from last year. That means we went from $35,000 to $70,000. Ok? We got top talent. Top guys out there within and without the industry. 0:27:33.5
Jordan: 0:27:33.5 These are people that me and you are very inspired by. Right? I mean, these are the people that me and you readily bow down to in their specific domain expertise. Victor Antonio, Marcus. These are guys that would be able-bodied mentors for people that are at a higher level calibre. Even like myself and yourself. Fair?
Alex: 0:27:54.8 Fair enough. We’ve had our bit of share of success. I mean, you know for me it’s a journey, not a destination, but these guys really sort of helped me identify the journey. Right? The purpose behind myself, and drive like there’s no tomorrow. 0:28:08.2
So yeah, top talent, top guys. Vetted. Interviewed, and paid what they’re worth to come and speak and perform for us the audience.
0:28:22.2 Second reason. We majorly improved the venue. This time, Jordan went onsite to this awesome hotel. US Grand Hotel in San Diego. Luxury hotel in a gaslight quarter. Awesome place.
And we’ve what? We did what? We actually listened to our customer reviews last year, and we got a wi-fi 0:28:41.8 [Inaudible]. Right? That’s a big one. We had people that came – can’t do wifi, it’s too crowded, can’t get on, can’t vote, can’t do anything, can’t do work. Well, we got our dedicated wifi vendor. So, from our perspective, it’s sold. I hope they deliver.
0:28:57.5 Reason number 3. We take 1% of the speakers and we ask them to do in-depth, hands on workshop. People like, you know, Marcus Sheridan. People like Victor Antonio. These are high level, top level thinkers with great methodologies they can distil on to you and on to your teams within three to four hours and you will never be the same.
0:29:19.5 Reason number 4, all-inclusive experience. We take you all the way through. You know, I just attended an Inman Conference Jordan, and I’ll tell you, it was a great conference. But there was not even coffee provided bro. Not even coffee. Great content, but man I was hungry. I was hungry, I was low energy. There was no snacks, there was nothing.
The way we do it at PMGrow is completely different. Awesome content, but also, you know, your food, your beverages, you drinks, your cocktails, your parties, your coffee, all that is provided for you so you’re not distracted from the reason that you’re there.
And those are the next – point number 5 0:29:56.9 Network and learn. This is the best networking opportunity in the industry. Top talents, top talent property management companies, owners are going to be there. And you want to be among them. So that’s my pitch. Five reasons to attend.
Jordan: 0:30:13.1 I’m sold. I’m going to be there.
Alex: 0:30:16.9 If you’re sold, put a code Alex in there. Jordan and I have a little healthy competition going. If you put code Jordan, you get $100 off. If you put code Alex, you get $200 off. Sorry bro, I didn’t mean to hijack you.
Jordan: 0:30:25.6 Turning my own audience against me. Wow, this guy knows no boundaries. And so, I’m going to get my money’s worth having him on the podcast. I’m going to keep moving on. I want to focus on three remaining points, Alex.
I want to dig into three specific line items that you and I have talked about before, that we specifically fleshed out at the most recent mastermind in Puerto Vallarta. 0:30:46.0 And those are in order. Item number one, ‘The Good, Better, Best Plan’. Which relates to an extreme pricing model on the lower tier plan. I also want to talk about a comprehensive ROI analysis and consultation as a paid consultation, prior to having…
Alex: 0:31:06.3 I don’t know if I wanted to give that away.
Jordan: 0:31:08.4 You know man, we’re going to do it. You came on the show…
Alex: 0:31:15.8 This is a bit unique, and it’s both of these concepts, right now, like right now you’re willing to give…
Jordan: 0:31:21.5 You came on the show, we’re going to do it. You know they want it.
Alex: 0:31:27.7 Major competitive advantage, and you know, I feel, I feel good about giving it away, but also I want to say that the value of these two concepts is not in the idea, but in implementation of the idea.
And the idea itself is sort of grand and potentially groundbreaking, but the implementation is going to be everything. You can’t just act on it based on the surface of what you hear in the show. 0:31:56.5 This needs research, needs consideration, needs further thought process. But man, the ideas are absolutely groundbreaking. In my opinion.
Jordan: 0:32:05.2 On the bottom we got some juicy stuff. Last one is the ‘Home Condition and Performance Guarantee’. We’re going to go over these one at a time. 0:32:12.8 Let’s start with the ‘Good, Better, Best Plan’. You already talked about having a pricing tier. A tiered pricing model. So you already mentioned good, better, best. That’s basic price anchoring. Best, most expensive. Good, least expensive. All, both of them, anchor people towards your Better Plan, which is your middle tier plan. That’s basic pricing psychology 101. But, let’s talk about this concept. Good idea? Bad idea? It’s kind of a wild idea. This concept of having a really, really cheap entry level plan to use as the gateway drug and the feeder to move people up to that Better or that Best Plan.
0:32:51.8 We talked about that a little bit in Puerto Vallarta. How could you craft a plan that could be shockingly cheap, and what would shockingly cheap look like in your mind? Speaking on behalf of the consumer.
Alex: 0:33:07.9 Yeah. So, something like $19 dollars a month sounds pretty ridiculous. Or, you know, a $29 dollars a month plan. That covers – that starts building a bridge. Because, take a step back for a second. I think the reason why landlords don’t hire property managers, and I’ve spoken to a lot of landlords, and I’ve, you know, I’ve always tried to sort of get inside their mindset and figure out why aren’t they doing it themselves.
Why are you dealing with your eight rental properties and not seeing a life, and not spending time with your young kids and family? Why would you – my neighbour, for example. Why would you do such a thing? And so for them, their answer is – you know what their answer is?
You know what the answer is? “I’m making 10% more return.” That’s what they always say. “I’m making 8% more return. I’m making 10% more return.” But you know in reality they don’t. They’re not. 0:34:05.4 They’re not, they’re – not only their time is being sunk into this, into their properties, into this rental business side project, but it also – they fail.
They fail miserably and they have vacant properties. Properties are being destroyed by tenants. They get sued. Regulations are getting tighter.
0:34:26.0 I mean, look, the bridge that we need to build as a – well the property management industry needs to build with the landlords is the bridge of transparency and trust. Ok. Those two things need to be there.
0:34:51 So I think that the ridiculously low plan can show, or give you the top of the funnel opportunity to get people signed up for your services at this ridiculously low rate. And you deliver some value for it. Right?
0:34:51.9 You can give them a lease agreement. You can offer them rent collection. You can get them rent ready consultation. You can do a 1099. Or you can provide those for additional fees. However you set that up.
Again, it requires a deeper thought process, and a lot of experimentation to do it right. Because boy, what happens Jordan, if you just undercut your own company. If you introduce this $19 dollar plan and all of a sudden, 80% of your consumers are signing for it, it’s too good. You’ve gotta pivot. You’ve gotta – like this is risky stuff bro.
Jordan: 0:35:25.3 It is risky stuff, but all good things come to those who venture and wager. By the same measure, what’s also risky is not innovating. What’s also risky is getting your pants beat off by the next flat-fee pricing guy that’s undercutting your business.
0:35:41.4 So are you going to innovate and are you going to disrupt yourself, or are you going to allow somebody else to do that on your behalf. The point is, it’s a thought experiment. By having a really low pricing tier like that, it gets you in the game. It gets you that initial conversation.
0:35:56.4 It is not meant to be a gimmick. I want to be clear. We’re not talking about putting out a pricing plan that is, that’s – where the service side of it is garbage and you have no intention of even using it.
I think, my belief, and like you said, it needs to be fleshed out and put in place to be validated, but my belief is that it is possible to have an extreme tier light plan, as cheap as $20, $25, $30 bucks a month that can actually provide tangible value for the more discriminating consumers that, as we both know, — you’ve probably heard this term, “prosumer” — consumers are more educated, they’re more able, they’re more DIY.
Can you start a relationship. Can you start a financially based relationship with a consumer that you otherwise would have never had a conversation with. 0:36:43.4 Because you had a price that was low enough for them to take a wager and begin a relationship with you. Whereas otherwise, they were just going to manage themselves.
0:36:51.4 These are not necessarily tire kickers, or worthless customers that are exclusively focused on price. These are people that feel like they already have a modicum of competence themselves and so they’re not necessarily competent with the idea of saying, of putting their hands up and saying, “Well I know nothing about it. The property manager has to do it all for me.”
They want to be somewhat involved, and so this allows them to offload a certain level of responsibility, begin the relationship, and if you have good service, if you care about your clients, if you care about things like on-boarding, retention, the client and customer experience, you have a viable option for moving people upmarket to your other tier plans. 0:37:34.4 That’s the opportunity that I see here.
Alex: 0:37:39.2 Yeah. I’m with you on this. There are risks involved, there are opportunities always connected to risks. You and I both took major risks to start this business and run it. Most of our customers, excuse me, most of your listeners did as well.
You know, most of them are founders and cofounders and – or people looking to start the business. 0:37:57.8 So, granted, we are risk takers. But, this needs, again, this needs – don’t just go out and cowboy this up. This needs to be a careful experimentation with testing, with AB testing, with understanding with a system behind this, you know, how you’re going to convert these guys.
0:38:21.3 It’s a bridge you’re building. It’s a top of the funnel if you will. It’s a bridge you’re building with your future, you know, best customers. You’re right, they’re not tire kickers, they’re not the el cheapos, right. They’re the guys who think they can do it, but their life situation’s change as well.
0:38:38.1 And a lot of times, these guys will go for a plan like that, just to test you out. Right. Just to feel you out and they’re already getting tired of doing all this work. They can do it, but they’re getting tired of it. They say, “Ok, maybe there’s a guy out there, maybe there’s a gal out there that can solve all this property management problem for me, but I can’t take 10% and take a chance on that. That’s too expensive. But I’m going to take a chance on the $20 a month plan and see how it is.”
Jordan: 0:39:01.7 So let’s clarify that we’re not talking about losing money, right? The goal here is not for your business to lose money in exchange for getting these people that you can one day up-sell. We’re talking about segmenting the value, where your hard costs are low. Segmenting the value of what’s in that plan, but then additionally having an a la carte paradigm.
I think it’s fair to say this has to be combined with a la carte paradigm where you’re at the $20 a month plan, but you want tenant insurance with that? You want eviction protection with that? You want an inspection on top of that? There’s clear pricing on a la carte basis for all of those additional services.
0:39:38.5 That’s definitely a component here. It’s important to note we’re not advocating losing money.
Alex: 0:39:46.0 Right. But I’d have to sort of, I’ll have to sort of introduce this one little potential, potential problem in there. Right? And the potential problem is cannibalizing your fairly priced services.
Jordan: Sure, sure.
Alex: 0:40:03.3 That’s where the money lies. The service, you can deliver pretty good stuff for $19-20 bucks because the systems and processes you have in place, and the technologies you have in place. You can probably break even on that, or maybe even make money at volume. But the problem I think is cannibalizing your other plans is a risk, so that needs to be considered.
Jordan: It definitely does, and that’s why the middle tier, the Better and Best Plans need to have a really strong demonstration of value, and there has to be a clear difference between each one of those plans so there’s a clear distinction.
0:40:36.7 Alright, so that’s – so we just put that nugget out there. Chew on it. Think about it. Consider it. If you’re the guy that’s right now complaining about this big, box shop coming into your market, slashing prices, having this low, flat fee and you feel like you’re getting your pants beat off, maybe you’re retreating. Right?
0:40:54.9 This is Clayton Christensen 0:40:57.4 Innovators Dilemma. He talks about the tendency when disruption enters the marketplace, is for incumbents to move up market. A disrupter tends to service the lower end of the market that is potentially either underserved or not served at all.
And the existing incumbents, rather than compete, tend to move upmarket. So there’s a lot of companies that are responding to lower tiered pricing competitors by saying, “Well we’re going to move upmarket. We didn’t want those lower tier properties anyways.”
0:41:28.2 Well, that’s a great idea, but if you’re doing that in more of a reactive, defensive way, as opposed to actually, intentionally choosing that, this is potentially an option for you to combat what’s happening in your market in that regard.
0:41:40.3 Let’s move on to the other item that I mentioned, and that is the consultation, the paid consultative sale. So this is a paid consultative sales process and when we fleshed out this concept, what we specifically honed in on was what we were calling the Comprehensive ROI Analysis and Consultation.
But if you back that up, if you point to the principle, what are we talking about. What we’re talking about is, in these sales process a clear demonstration of value that is so beefy, that is so juicy that you can actually attach a price tag to it.
0:42:20.6 And attaching the price tag does two things. It allows you to both justify leading in and creating a lot of value in the context of that consultation, but it also demonstrates to other people that you’re serious and that this is a legit offering.
0:42:35.4 That is actually has enough value that you feel comfortable charging for it. Walk me through why you feel, Alex, that this is an opportunity for companies, and if you were a property manager, how you might put this in place.
Alex: 0:42:49.0 Yeah. So the sort of – the generally accepted form of the top of the funnel lead capture in the property management space right now, is rental analysis. Free rental analysis. So it’s powered by RentRange or RentFax 0:43:11.7, there are two companies like that that are able to pull those reports.
So what you do is you offer that to your website visitors in hopes that you will gain somebody. You gain their email addresses and contact information, gain interest initially in your property management services. So just set that up.
0:43:29.4 The level up from there, what we talked about, is a comprehensive, in-home rental consultation. Ok. That will have both the rent ready, you know, rent ready report that is specific to the property and will have both the ROI, calculations with or without management services, that is a service in itself that is valuable and that a consumer cannot get from Zillow 0:43:58.3, you know, all these other rental websites out there. They cannot get an experienced property manager in their house doing their specific evaluation.
0:44:08.7 And that’s what I’m talking about. That’s a level up from there. So charge, you know, a fee for that service that is worth, that – where your company is still making money and I think the most serious prospects will come from that channel.
Jordan: 0:44:21.8 You’re valuing your time, you’re valuing their time. You’re leaning in in the the thing that you know you would like to do. Right? What you’d like to do is to pre-qualify the people that you’re interacting with and then go deeper into those specific relationships. And this is a structured way to do that.
When this process is done, when that meeting is done, they’ve already received a significant amount of value and that’s how you’re framing the relationship on an ongoing basis. 0:44:52.5 I see this being done on an increasing basis in the freelancer space, where – asking the question or answering the question as a freelancer, “Should I offer a free strategy call?”
Well that takes my time, that gives away my ideas. I’m basically offering up my strategy for free to a consumer that may or may not be qualified.
0:45:14.2 This is a way to make it a win-win for everybody. I don’t know about you man, but I think this idea has legs and I think we’re going to see a least a couple clients put this in place in the next 12 to 24 months.
Alex: 0:45:29.8 Yeah. It’s – again, it requires further evaluation. It requires experimentation. And it requires fairly high traffic Jordan. If your website gets, I don’t know, a thousand visitors a month and you know, only about 50 of them are owners, this may give you some idea of how many takers there is, but I think this requires some volume.
So this is, I think this is more for pay-per-click campaign, Facebook campaign, or a high-trafficked blog that can offer this option as a content upgrade. We call it a button on the blog that is being read a lot. A video you recorded that is being watched a lot. 0:46:12.3 Those kinds of things. This is where you test it. You need volume.
Jordan: 0:46:15.3 That’s really interesting. All right. So guys, note. Alex is relating this – towards this as a lead gen offer, whereas I’m relating this towards a conversion component. You can look at it from either perspective.
You could be looking at this offer as a way to generate more leads like Alex is, or you could be thinking about it as a way to actually convert more of the leads that you already have. 0:46:35.8 So the volume I’m thinking about Alex, is lead volume. If I’ve got at least 10 leads a month, I’ve got more than enough to be able to test the impact of this. How many people take me up on this offer? Of the people that do, are those people satisfied? And when somebody pays for this offering, how much more or less likely are they to end up buying my overall service package? That’s kind of the mental framework, the mental math that I would be doing to validate this offer.
Alex: 0:47:01.5 Yeah. Well, so I agree. There’s a conversion aspect to this. In fact, there’s a strong conversion aspect to it. But 10 leads equals about 300 qualified owner/visitors to your website, so I’m just saying, going back you’ve got to have more leads. You’ve got to have traffic.
Jordan: 0:47:15.7 I think you’re right. I do not disagree. The last thing that I wanted to talk about was the idea of a guarantee. Guarantees – there’s a lot of guarantees already. Talk me through some of the guarantees you already see companies putting out in the marketplace.
Alex: 0:47:30.3 Pet guarantee, tenant guarantee, home condition guarantee, you know, there’s probably four others I can’t remember.
Jordan: 0:47:43.4 That last one I mentioned is actually not one that I’ve heard before. The home condition guarantee.
Alex: 0:47:47.2 No, we …
Jordan: 0:47:48.3 The idea of the home condition guarantee is stemming from what? Right? Any guarantee should be pointed at a specific emotional trigger in the mind of the consumer. The home condition and performance guarantee is essentially guaranteeing what? The quality and the condition and the performance of your home.
0:48:09.4 And this obviously relates to a concern that consumers have. Relate to me, or just kind of walk me through what you believe that trigger looks like in the mind of the consumer. What is this a response to?
Alex: 0:48:20.9 Yeah well, as a home owner, you care about two things. Two things are at the forefront of your mind. 0:48:29.9 [Inaudible] being addressed.
The two things you have on your mind is one, is my home going to be destroyed? Is my home going to diminish in value? Is my home is going to be so worn out, by the time this current tenant or new tenant moves out, I will have to put in $1000s of dollars to bring it back to a condition to rent it again. Am I going to be in a financial hole because my home is going to get destroyed by some tenants? 0:48:55.7 By someone who lives there and occupies it and whatever.
0:49:00.0 The second concern is, is – am I going to get income to cover the mortgage? Am I going – is my income going to be consistent enough so I can cover the mortgage, cover the house expenses and sort of travel and do things I want to do without worrying for, worrying for my house.
After all, I’m hiring a property management company so they can sort of centralize, optimize, and deliver me the monthly rental cheque at the, you know, absolute exact time of the month. I expect it, I need it, I get it, the bills are paid. I want to make sure that is taken care of.
0:49:35.1 So those two concerns are major concerns I think any home owner, or investor even, or landlord, has and that guarantee basically touches both of these major things.
Jordan: 0:49:47.9 So let’s flesh out the guarantee a little bit more. Again, you could spin this a million different ways, but this may come with a comprehensive video home inspection report. An annual property condition survey. Maybe a certain dollar amount that’s related to home restoration.
0:50:05.8 So if your home does get trashed up to a certain dollar amount, we’re going to fix it for you. It’s de-risking it and it’s de-risking it on a what I would consider on more of an emotional level. Right?
0:50:17.8 If you think about all of your reluctant landlords, we could put them largely into two buckets. The folks whose hangup is primarily emotional. Like exactly what you just said. “I’m worried about this 30 year property that has been in my family for a long time. I grew up there. Parent passed away, I’m open to the idea of renting it out, but that said, I do not want a family with ten kids and trashing grandpappy’s property.”
It’s this, for whatever reason, there are emotional considerations. 0:50:50.8 The other half of your reluctant landlords could be put in a bucket that relates more to folks that are considering the pros and cons of renting versus selling with this specific property.
0:51:03.3 The two offers that we talked about – previously we talked about the paid offering of actually getting some kind of a consultation to help me understand the overall ROI of whether or not buy versus – rent versus sell. That’s relating more to the folks where that is their primary trigger point.
0:51:24.3 For these folks that are in this emotional category, the home condition and performance guarantee could address the primary consideration that they have.
When you think about these types of offers, Alex, why is it so powerful to match your selling point to something that is on the opposite side? Why is it so important to target offers to specific, I’d say pain points that consumers have? 0:51:51.2 Just talk me through the leverage that exists there.
Alex: 0:51:53.9 I think the first and foremost thing is you’ve got to come at it from a position of service and empathy. This is what a lot of your competitors lack. And, you know, people consider a lot of – and this is what I’m getting tired of this and I keep speaking about this on my own podcast.
0:52:17.9 I’m tired of tenants being treated like second-class citizens by some of these property management companies. That is not the correct way. That is not a service way. That is not an empathetic way. That’s not how you build your business into a massive powerhouse like some of the more successful property management, because they have purpose behind their actions. Right?
0:52:40.1 They have purpose and their purpose is to house people in the best housing possible for their situation for their family and to provide landlords and real estate investors with return on their investment in securing their largest asset. That is a calling man. That’s a lot more important than what you and I do. Believe it Jordan. That’s more important.
These property management companies house people everyday and that cannot be taken for granted. So, I’m going to take it all the way back to service concept. So when you’re speaking to the customer, so number one – or prospect – number one is listen. Right?
We talked about turning the “what is your fee” question into a discovery and upon that discovery, you know, you’re going to listen and you’re going to dig in deeper and deeper to understand their concerns. What you have, your service offering, is going to be able to alleviate those concerns.
But don’t be so in a hurry to just blab it out there without listening. That’s not going to connect. That’s going to be – that’s not going to – you still have to do the discovery, you still have to do the listening.
0:53:49.0 And then when you’re ready to present your solution, these things will just knock their socks off. Who else would they hire, and why? They wouldn’t hire anybody else. You have three different pricing tiers that will please, you know, 95% of landlords out there. You have – you solve real problems and you provide – you de-risk their investment. You de-risk their, you know, their experience, their concerns for the property. And that’s it. And you win the deal. Every time.
I mean, you’re talking about, you know – a competent sales person with this sort of infrastructure in terms of pricing and services can close – what would you say the closing ratio should be? When a competent sales person picks up the phone and they have this sort of infrastructure.
Jordan: 0:54:36.9 I always say that the industry average is 12-13%. That’s the data that we see day in and day out. I also – when people ask me, I’d say 20% should be your bottom tier. If I was running a property management company and I had a closing rate of less than 20%, I would be really, really frustrated.
If I personally was in that position on a sales type level, I’d be shooting for 30% or better. 0:55:01.9 But keep in mind that the more that you expand with lead flow, the harder that gets to maintain.
Alex: 0:55:08.4 Yeah. No kidding. I also want to – we don’t have much time left, but I want to poke at the frustrated comment, the frustration comment you made. You know, you would be, you would be, you would be moved into action to fix it and find and attend the PMGrowSummit and figure out how these other more successful companies do it.
0:55:29.7 Come back and bring the process back to your company. And fix it. I think being frustrated is a good start, but I think taking that frustration and channelling it into action, and deliberate action, is sort of how you fix these things. But yeah, I would say 30-40% will be the closing ratio for a competent sales person with this sort of tool set. 0:55:50.7 With this sort of pricing and service infrastructure.
Jordan: 0:55:52.3 And it bears repeating. I’ve said this a million times, but you’ve got to make you’re talking to apples to apples comparison with conversion rate. Don’t cherry pick. Your conversion rate of the warm bodies that you met with in person, to customers – it’s interesting.
Your meeting to close rate is interesting but that’s not your true conversion rate. And when people bandy that stat out about, you’re doing a disservice to everyone else, because you’re really cherry picking your numbers.
0:56:16.5 The conversion rate that I’m talking about is anybody that fills out a contact form. Any qualified prospect that calls in. Right? Yes, you can discount somebody that filled out the form and they’re a tenant, they’re a vendor, but otherwise, anybody that fills out a form or makes a phone call, that is what should be included when you’re calculating your overall conversion rate.
0:56:38.7 I want to transition now to the rapid-fire section of the interview. I want to walk through a couple of key questions. 0:56:44.1 Alex, the first question is, how much is too much to pay for a new property management contract? We’re talking about customer acquisition cost. How much is too much Alex? In your opinion.
Alex: 0:56:56.0 50% of the lifetime value.
Jordan: 0:57:00.0 Ouch! Ouch! That is the single highest number I’ve heard to date, probably by an order of magnitude. I got to push back on that. You really believe 50%? You would go that high?
Alex: 0:57:14.6 I’m just saying, you said what is too high. I would say 50%. Yeah. If I am revenued and if I have, and if I have – you have – so, so, so let me preface this. I know it’s a rapid-fire, so let me rapidly tell you. If I am financed, I would do it. If I am bootstrapping, or revenued from, you know, this particular income and that’s the only source that I have. I don’t have real estate sales, I don’t have a maintenance business, I don’t have anything else but the fee-based property management business, yeah, that’s a suicide. 0:57:47.5 Because it’s going to take you, you know, you know, two years to realize – to break even. But if you’re invested, like look at this, these guys up in – what’s Max?
Jordan: 0:57:56.0 Max Nussenbaum Castle
Alex: 0:57:59.5 Yeah, Castle. These guys just raised 3,4 million. I’d pay 50%.
Jordan: 0:58:02.6 You know what, his acquisition cost where he tapped out was way lower than that. Way lower than that. So what’s interesting, there’s two things here guys. First, Alex is talking – answering the question in terms of a percentage of lifetime value.
Nobody else has answered that question that way. Everyone else has put a straight dollar figure on it. I think that is the right orientation. 0:58:22.6 The other thing is, that Alex, by answering it that way is kind of not having to address the other consideration, which is, are we talking about the cost just in terms of marketing dollars, or are we talking about fully loaded. Fully loaded. Right.
So that’s a really aggressive number. For most of you guys, it’s going to be lower than that. 0:58:40.8 But let’s say it’s half. Let’s say it’s a quarter of what Alex just articulated. That is the right mental model. Your customer acquisition cost, willingness to pay, should be a bi-product of lifetime value.
0:58:53.0 Next question for you Alex, who do you learn from?
Alex: 0:58:57.8 I follow two podcasts regularly and religiously, if you will. One is Mixergy, Andrew Warner does fantastic interviews with entrepreneurs. Man a crow just landed on my sill, God that was – I just freaked out. 0:59:18.2 [Edit]
Anyways, he does exceptional interviews, I learn everything from him, from his guests as well as from him – the way the conducts interviews and he’s becoming a good friend and an advisor in a lot of ways.
0:59:29.4 The second one I listen to all the time, is Jordan Harbinger with, The Art of Charm. That’s it. So that’s another one I follow fairly regularly. Not religiously. 0:59:43.6 [Edit] There are a couple more out there that I cherry pick. Like Altocher Show with, I forgot his first name.
Jordan: 0:59:52.2 Max.
Alex: 0:59:52.2 My memory isn’t the best.
Jordan: 0:59:56.3 Max?
Alex: 0:59:56.0 James?
Jordan: 0:59:55.6 Ah there you go, James. You’re right. 0:59:58.0 [Edit.]
Alex: The James Altocher show is pretty good. 0:59:59.2 I go to – and one last thing I’m going to mention, my newest kick is…
Jordan: 1:00:10.4 I thought you were going to say, yeah super interesting character.
Alex: 1:00:14.2 He talks about brain science. He’s a brain scientist. A worthy one to listen to. 1:00:17.6 [Edit] And Gary V. Of course, Gary V is an inspiration. He’s a bit, he’s a bit of a – talking a lot about himself and his journey, but his journey is very interesting to me, so I follow.
Jordan: 1:00:29.5 Alex, what books have impacted you the most over the years?
Alex: 1:00:35.0 Well, I have a stack behind me. But now lately, I’ve had all of them on my Kindle, so I can’t really like have a stack. I’m reading, I’m reading, I’m reading a lot of culture based and team based kind of books. If – I don’t have the titles that I can pull right out of my brain like you do. I have very selective memories. But right now, I’m focused on team and culture building.
Jordan: 1:01:08.8 Love it. Next question. What’s the number one thing that you see property management companies doing wrong when it comes to property management marketing?
Alex: 1:01:23.2 Not doubling down on what works. And first of all, it’s not understanding what works and not caring enough. Being sort of a horse with the blinders on. You know, let’s run, let’s run, let’s run in a single direction and let’s not evaluate, let’s not, let’s not review what’s happening, let’s not go outside of the, you know, the usual parameters of, you know, PPC, buying some leads from All Property Management 1:01:51.1 and you know, and close as many as I can.
Jordan: 1:01:55.6 Lack of attention, lack of focus.
Alex: 1:02:01.2 Lack of focus. Everything pre-sale is being sort of – it’s like there’s a pre-ordained, you know, lead channels, that you know, people neglect to build their own brand by getting the injected with the PPC or PPL drug. Right? PPC, Pay-per-click, PPL, Pay-per-lead.
Jordan: 1:02:25.7 It’s the easy way out.
Alex: 1:02:28.7 You inject your veins with some leads from, you know, pay-per-lead sources, or pay-per-click sources, this is – this should be a bridge to get you to your own way to grow leads and grow referrals and build networks and run, you know, investor seminars every month.
Like, I don’t know, I love Steve Rosenberg [1:02:52.4 Resource] and the way he’s running his business is fantastic. And he does not rely on pay-per-click. He still does it, because that’s a great way to get business in the door now. Again, injecting that vein. But man, he’s getting 80%, 90% of his business from organic.
Jordan: He’s graduated.
Alex: 1:03:09.7 Yeah, definitely. He’s a graduate.
Jordan: 1:03:12.8 One second. 1:03:23.2 [Edit] 1:03:23.2 Last question of the day Alex. I’m really interested to hear your thoughts on this. Are entrepreneurs born or bred?
Alex: 1:03:35.0 Actually, that’s a good question. So I think both. But – so when you’re born an entrepreneur, you have this sort of innate drive to innovate, to do things. You’re not satisfied with the status quo. You keep building. But the nurture part can sort of bring you down. Can bring you down a little bit, diminish your talents and set you on a path of unhappiness in a cubicle.
1:03:59.6 When you are made an entrepreneur, you are being pushed by circumstance – and, you know, you and I are some extent a part of that. Right? By circumstance into building something. Building an opportunity and serving your purpose. The lethal combination is both born and made.
Those guys, those guys, like Mark Zuckerberg, you know, Bill Gates, those are the people right? Hopefully Jordan Muella and Alex Osenenko, right? Those are the people and there’s probably a lot of listeners, those are the people that make it big. Those are the people that don’t stop. They’re not shy to be on the video. They’re not shy to go on a podcast. They’re proud of their business.
Are we perfect? Hell no. Do we make mistakes? All the time. 1:04:45.2 But, you know, it’s the journey for perfection, for service. In the name of service. Right? Perfection in the name of service. That’s what drives me, that’s what drives my business. I know you very well and that’s what drives you as well. I know that for a fact. And so born and made, lethal combination. Good luck competing with us.
Jordan: 1:05:04.9 Spoken like a true entrepreneur. Pleasure to have you on the show today Alex. Where can listeners go to find out more about what you’re up to?
Alex: 1:05:14.1 That’s awesome man. Fourandhalf.com is where I live. That’s my business, that’s my website. The Property Management Show is something I would recommend people checking out. I have a little bit of a different style with Jordan.
Jordan is very, very smart and organized and very, sort of a structured way to interview – are interesting. I think the value of this podcast, you know, it’s going to be in the millions of dollars of revenue for the audience – for your audience in the future.
No joke. This particular podcast. Because I think we will have uncovered some truly unique ways to grow businesses. But, you know, my show will also give you – a little bit of a different perspective on things, where I go deeper and try to kind of pick the nuggets of wisdom out of the brains of my guests. 1:06:02.7 Hopefully you’ll be on the level with this show.
Jordan: 1:06:06.4 Different is good. Diversity is good. The reality is, there’s plenty of demand in the market. We should also shout out Brad Larsen, with his show Property Management Mastermind. There is massive demand for smart, talented, true property management entrepreneurs.
PME and that’s an upper-case, bolded, emphasis on the E. That’s the change that’s happening in the industry. Those are the people that are being served by listening to shows like Alex’s podcast. Really appreciate you coming on today Alex, I’ll see you in January.
Alex: Was a pleasure!