Alice Hagen & Daniel Gow on Using Referrals to Grow in a Crowded Market
Calibre Real Estate Brisbane is a boutique real estate agency in Brisbane, Australia that specializes in residential property management and sales.
Alice is active in the property management side of the business where she has run a BDM team and even jumped in to help with the business development when needed. Daniel is a rising star who started as a leasing specialist and is now killing it as a BDM.
In today’s episode, you’ll learn how they work together to grow the company, and how you can use these lessons to improve your own business.
- (01:44) – Background Leading up to Today
- (01:55) – Alice shares with us how she wound up in the property management industry.
- (02:26) – Daniel’s background story.
- (02:54) – What Calibre looks like today.
- (03:14) – Growing a PM Business
- (03:24) – Alice walks us through her managing role at Calibre.
- (04:25) – Daniel discusses the primary drivers of growth so far at Calibre.
- (04:30) – Referrals as the main source.
- (05:34) – How Daniel and the Calibre team influence referrals.
- (06:26) – Average number of properties per client.
- (07:03) – The mechanisms for influencing owners to buy more properties.
- (07:25) – Specific conversations with current owners.
- (07:58) – Content marketing.
- (08:36) – Performing sales appraisals.
- (09:16) – Monthly marketing of listings.
- (10:38) – How Calibre differentiates itself from its competitors in an ‘infinite supply’ economy.
- (10:53) – Calibre’s unique hybrid model of segmenting clients into subsets and serving their specific needs based on their feedback.
- (14:27) – The practicalities of segmentation.
- (16:04) – Identifying common patterns of temperament and demographic with clients.
- (10:53) – Calibre’s unique hybrid model of segmenting clients into subsets and serving their specific needs based on their feedback.
- (16:04) – Calibre’s specific use of MAD Reports.
- (20:17) – Costs of the hardware.
- (20:39) – What led to the purchase and use of the technology.
- (23:02) – Percentage of listings Calibre uses the MAD Report for.
- (23:12) – KPI’s
- (23:31) – Measuring success.
- (24:10) – Meaningful and relevant KPI’s.
- (25:10) – Calibre’s stance on discounting fees.
- (26:20) – The psychological effects of never discounting or reducing fees.
- (28:16) – The profile of an owner who insists on reducing.
- (28:53) – The raw numbers and effects on a business when reducing fees.
- (29:51) – Breaking down the math.
- (33:04) – Priorities Going Forward
- (33:25) – Alice discusses Calibre’s strategies moving forward.
- (34:15) – Gauging customer satisfaction.
- (34:59) – Discussing reputation management and the reviews process in Australia.
- (33:25) – Alice discusses Calibre’s strategies moving forward.
- (36:32) – What’s the most underrated skill set in managing and leading a team?
- (37:04) – What is the most frequent objection that you hear from prospects and what’s your reply?
- (38:15) – Who do you learn from?
- (42:03) – What’s the number one thing that you see property management entrepreneurs BS’ing about?
- (44:42) – What’s the difference between a good BDM and a great BDM?
- (45:51) – What does a well-run meeting look like to you?
- Calibre Real Estate
- Stacey Holt (38:25) – Advisory resource recommended by Alice.
- BDM Academy (38:56) – BDM training resource provided by Alice’s colleague and former guest Tara Bradbury.
- Way of the Wolf: Straight Line Selling: Master the Art of Persuasion, Influence, and Success (40:36) – Learning resource recommended by Daniel.
Where to learn more:
Jordan: 0:00:00.0 Welcome closers. Today we have another episode of The Profitable Property Management Podcast coming at you. This is Season Two on sales.
I’m your hose 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 to give you the tools and tactics that you need to get to the next level.
0:00:26.0 Today, I’m talking with Alice Hagen, the principal and co-founder of Calibre Real Estate Brisbane, as well as Daniel Gow, the BDM with this company.
Calibre Real Estate Brisbane is a boutique real estate agency in Brisbane, Australia that specializes in residential property management and sales.
0:00:44.8 Alice is pretty active in the property management side of the business where she’s run a BDM team. She’s even jumped into the BDM side of things when needed. And Daniel’s a rising star, working, who started as a leasing specialist and is now killing it as a BDM.
0:00:59.9 So, as always, this is my jam to work with. Kind of both sides of the equation. Both the operator, the strategist, the manager, the owner, the principal, as well as the tactician that is in there doing the work to actually grow the business.
0:01:15.0 So, in today’s episode, you’re going to learn how they work together to grow the company, and how you can use some of these takeaways to improve your own business.
0:01:22.9 Welcome to the show guys.
Alice: 0:01:24.2 Thank you for having us.
Daniel: 0:01:25.6 Thanks Jordan. Alice and I are happy to be here.
Jordan: 0:01:28.9 Alright. Well I’m excited to have you guys on. The connection was through Tara Bradbury and Tara’s colleague actually spoke at the PM Grow Conference earlier this year. 0:01:41.1 It was a pleasure to have her out there.
0:01:44.6 I always like to start here with an interview like this – in terms of background, how did you both wind up in the property management industry?
Alice: 0:01:55.4 Ok, so in 2009 my husband Justin and I launched Calibre Real Estate after we started to build our own portfolio in residential properties.
0:02:05.2 And we were just doing small developments and thought we should have our own entity to be able to manage and sell our own properties.
0:02:13.1 But from there, friends and family approached us and wanted us to manage their own properties and sell their properties so we just grew our business model from there.
Jordan: 0:02:24.0 Love it. Daniel, how about yourself?
Daniel: 0:02:26.6 Me, myself, I actually – I haven’t been working in real estate for obviously as long as Alice. I’ve only been in real estate for about three years.
0:02:33.5 I started with Calibre, obviously as a leasing assistant and kind of fell in with the company about two years ago.
0:02:40.9 From there, I’ve just grown into this BDM role. I’ve loved spending my time here at Calibre learning everything there is to learn about property management and real estate. 0:02:51.0 And from here on out I’m looking to just grow as a BDM here.
Jordan: 0:02:54.9 Fantastic. So let’s kind of feel out the parameters of the business. How many properties are you guys currently managing?
Alice: 0:03:01.4 We’re currently managing 570. All around South-east Queensland.
Jordan: 0:03:07.1 And so the business is not solely focused on property management, you have a pretty sizeable brokerage as well? Is that correct?
Alice: 0:03:11.4 Yes, yes. We’ve got a separate office that does sales.
Jordan: 0:03:14.3 So Alice, walk me through your day-to-day role managing the Calibre team. What does your average workday look like?
Alice: 0:03:24.1 Ok. So, I give our team a lot of freedom to set their own workweek. To be able to arrange their own KPIs.
But we do have a structured Monday weekly meeting that really sets off the tone for the week. 0:03:38.4 It just gathers how everyone tracked for the previous week and how everyone is tracking for the current week ahead.
0:03:45.8 In that training – sorry, weekly meeting we also have a weekly training session on relevant legislation and procedures and it just opens up – opens up for everyone to discuss if they’ve got any issues or anything to discuss.
0:04:01.0 Then I also set a monthly keep-stop-start ((?)) meeting with everyone individually. 0:04:05.5 So we can set goals for the month ahead and see how they’re tracking.
Jordan: 0:04:09.6 So that monthly cadence, that’s kind of the cadence that you do one-on-one reviews, is that what I’m hearing from you?
Alice: 0:04:14.6 Yes.
Jordan: 0:04:16.4 And thus far, how long has the operation been in business for?
Alice: 0:04:22.1 Nine years.
Jordan: 0:04:25.0 What have been the primary drivers of growth for Calibre?
Alice: 0:04:30.6 Dan?
Daniel: 0:04:30.9 Primary drivers for us – we’ve been trying to grow just as much as we can organically, so we’ve got a lot of clients that come to us because either they’ve had, I guess problems with their previous agencies, or they’ve just heard our name out and about and our looking to utilize us as to lease out and manage their properties.
0:04:50.5 So, the primary drivers of growth are obviously our clients, they come to us. And we just look to service them as much as possible so that we can – a lot of our business comes from referrals – so that we can ensure that those clients are happy with our services and are pleased with our results – are able to refer us to their friends and family and colleagues.
Jordan: 0:05:13.2 Alright, so referrals is a great super generic term that’s like really difficult to drill down on. At least in such a way that it seems like it’s something that’s influenceable. Something you control.
So, Daniel, for your part, how do you influence referrals? Are you just waiting for these to come in? Are there things that you do to actually solicit and generate them? Talk me through that.
Daniel: 0:05:34.4 Ok, sure. So, once we bring on a client, you know, we spend maybe two to four weeks with them getting their property ready. 0:05:42.2 Making sure it goes to the market fine. We get tenants in there.
0:05:46.1 Once that’s all sorted, basically I work effectively with the property management department then to ensure that their property is well managed.
And then, from that point, I’ll stay in touch with them. 0:05:56.6 So it might be touch points of maybe one month, three months down the track, six months down the track.
Whatever it is, I’ll stay in touch with them, check in on how they’re doing and whether they’re continuing to be happy with us.
0:06:06.7 And from there, those conversations are generally what we can push forward to, “Well, look, if you’ve got any other properties that you’re thinking about purchasing, feel free to have a chat to us first and we can give you some information about what kind of rent you’d be expecting on those properties, as well as if you’ve got any people that you’d like to refer to our service, we’d love to have them on board.”
Jordan: 0:06:26.6 How many properties do you think a – your average client owns?
Daniel: 0:06:35.6 A lot of our properties are owned by mom and dad investors with maybe one to two properties.
There are a number of clients in there though that are serial investors and do have that portfolio of, you know, four to six properties.
0:06:46.9 They’re the kind that we, obviously we do get a bit of referrals from, but what I find is that the clients with only one or two, they’re the ones that really do value that personal service quite highly and they’re – the referrals are more likely to come from those ones actually.
Jordan: 0:07:03.6 Do you feel that – have you guys made any attempts to try and influence the number of properties owned?
Meaning, do you just try and drive awareness to let them know that if they want to buy one you can help facilitate that?
Or do you guys ever do anything to actually stimulate and to get a mom and pop owner, as you put it, to actually purchase another investment property?
Daniel: 0:07:25.5 Yeah look, we – basically what we do, with the people that we do have currently on our books – our current clients, we do have a chat with them and we do offer that, you know, “If you are looking to purchase another property, whether it be through Calibre or not”…you know, it might not be a listing that Calibre has. 0:07:40.6 It might be another listing that another agency has.
0:07:43.0 We do let them know that, “Look, this is the part where you can engage us. We can have a chat to you know about how we bring this property onto to the market for rent and the kind of rental return that you can expect from this property. As well as any kind of things that you can do to improve the property and get a higher rental income.”
0:07:58.0 For people that are not current clients, we also do have a lot of blogs online. We’ve got a lot of written articles there.
But basically a bunch of guides to purchasing investment properties and setting up everything that comes along with investment properties as well.
0:08:13.6 So, those kind of guides are what we can send people to. Just to give them that little bit of extra information and help them along the way. Make any decisions that they need to about, you know, whether they are going to purchase more and how they’re going to go about doing that.
Jordan: 0:08:26.5 So if you have a client that tells you that they want to sell one of their existing properties, will you do any coordination to try and put that in front of your existing set of clients?
Alice: 0:08:36.9 Definitely. So, we then – as soon as we – in every lease renewal situation, the clients – we ask them a question whether they want a sales appraisal or not.
Then our team contacts the client to arrange that sales appraisal and then we do market to our rent roll of clients.
Jordan: 0:09:00.3 Alright. So what specifically does that look like?
Do you have like an email list that you – and if so, what subset of your clients do you reach out to? I’d love to hear just some specifics on how you market to them.
Alice: 0:09:16.0 Just monthly market out and including all the properties that we have listed. And letting them know the returns and the type of property it is.
Jordan: 0:09:27.6 Oh, got it. Ok, so this is just a monthly thing that you’re doing, kind of no matter what. This is just a part of that cadence.
Alice: 0:09:33.6 Yeah. Yeah.
Daniel: 0:09:32.7 Yes.
Jordan: 0:09:35.4 Ok, I love that. So guys, something I’ve been thinking about a lot lately is this concept of infinite supply. And the shift from going from a supply economy to a demand economy.
Meaning that, back in the day, if you wanted certain goods, you had to go to the vendor in order to get them. And therefore it was the vendor that controlled the distribution and the terms on which those items would be sold.
0:09:57.9 Now, in a million different areas, whether or not you’re talking about renting movies, listening to music, purchasing clothes, there are so many options that can give you instant results, infinite selection.
0:10:10.1 So the concept of infinite supply is basically just acknowledging that in the mind of the consumer, true or not, the consumer tends to believe that they have many different options and therefore there is a tendency to commodify what used to be meaningful points of differentiation.
0:10:26.6 So, things like, “Hey we’ve been in the business for ever.” Or, “We’ll take care of the property like it’s our own.”
0:10:32.0 These things have less and less meaning for obvious reasons, because there’s ten other shops that are making similar claims.
0:10:38.3 In light of that, Alice, how do you think about the types of differentiation and the types of positioning for Calibre that are still meaningful and that still actually resonate with potential clients.
Alice: 0:10:53.2 Ok, so we built our business based on our own personal experience with other agencies and so with that in mind – throughout every day really, and every time we re-look at our business model, this is always the purpose of our business. 0:11:11.6 How would we want to be treated and how do we want our property to be managed.
0:11:16.7 So, what we’ve done to differentiate ourselves, as well, is that our property management division is set up in a very unique way.
0:11:29.3 We’re not a task-based, we’re not a portfolio-based, we’re not a team-based property management agency.
0:11:34.4 After trialling all these different, you know – I guess they’re fashioned – different ways to manage your property – after many years, we’ve sought feedback from our clients and our team and we came up with more of a hybrid property management style approach. And actually listening to our clients of how they want their property to be managed.
0:11:52.4 So, we’ve come up with a different way to manage properties, to work with our team’s strengths.
0:12:00.0 So we have – within our business model we have two senior property managers that manage their own properties, because those clients with that property manager wants to be in contact with them continuously.
0:12:17.2 However, then we’ve got another group of clients that don’t mind that more of a team-based approach where they just want to get the answers and anyone on that team can help.
0:12:28.0 So, just really changed the way by listening to our clients feedback. And our clients have really appreciated the change and we seem to have really great balance now in our office.
0:12:41.4 We also market our property management listings as if they’re our sales listings. So that entails a premium marketing package and the use of technology like the MAD Report and other software that allows us to directly target potential tenants as well.
0:13:01.9 So yeah, we’ve just got a different approach. I know you’re saying that everyone’s saying that they have a different approach, but I feel that we do in our – in the way that we conduct business and don’t just look at it as a real estate industry.
0:13:14.7 Because, prior to 2009, I was a – I did a forensic science degree and Justin was a licensed aircraft engineer for Qantas.
0:13:23.3 So, we’ve had such a different background and I think that really helps because we’re not entrenched into the traditional business model.
Jordan: 0:13:33.4 I couldn’t agree more. I’m 100% with you and I want to hear a little bit more about that.
0:13:36.5 So you’re actually the second company that I’ve interviewed – the last folks that we had – the last guest on the podcast articulated something similar. And that doesn’t take away from what you’re saying.
I’m actually really fascinated by it, because I don’t know that I’ve ever heard that up to this point. 0:13:51.0 The notion of embracing different management styles for subsets of your portfolio.
If I was going to distill that down, I think what I hear you’re saying is that regardless of whether or not they’re an accidental landlord, a mom and pop, an investor, certain people just want to be related to in a certain way.
0:14:09.9 And either they’re more tolerant of departmentalization, they like always speaking to the specialist for a specific type of service need within the company.
0:14:19.9 And then maybe other folks that always want to talk to the same person, no matter what. Even if their knowledge is a little bit more genericized.
0:14:27.1 So how do you segment what client goes into what management style when you bring on a new client?
Alice: 0:14:38.0 I think that’s Daniel.
Daniel: 0:14:38.3 Yeah. I guess, basically what it comes down to – so, like Alice is saying, you’ve got, you know, you’ve got a pod-based scenario, where you’ve got a team of three people looking after about – a large amount of properties.
0:14:51.0 And then you’ve got a portfolio system where you’ve got a single property manager looking after just one portfolio.
0:14:56.2 And so, how we differentiate those, is basically just by asking the owner’s what they’re after. And what they – if they have experienced property management with another agency prior to us.
0:15:08.4 We like to find out the reasons why they’re choosing Calibre, or looking to change their property management agency.
0:15:14.7 So what that might come down to, is – ok, for instance, someone says that every time they ring their current agency, they can’t get a hold of their property manager because they’re always out on routines 0:15:24.3 and they can’t speak to anyone.
0:15:26.5 That kind of person is probably more looking for a team-based situation where they can call the office, and regardless of whether that, you know, that senior property manger is out, there’s going to be another two staff members there that work with that team.
0:15:42.8 And they’ll be able to actually talk to that landlord and answer questions and help them out with whatever they need.
0:15:47.8 Sure there may be some things that that senior property manager needs to chat them about, but that kind of situation gives them a chance to ring up and not simply leave a message and ask for a call back.
0:15:59.5 That just allows a little bit more human connection instead of just being, I guess a number to get back to.
Jordan: 0:16:04.8 Sure. And anymore colour on the type of temperament or demographic amongst a client that biases them towards one approach versus the other? Have you noticed any common patterns?
Daniel: 0:16:16.1 Yeah, absolutely. So, when it comes to owner occupied properties, and ones that are – they’re quite often the ones that are landlords for the first time. Or, they’ve just bought another property to move over into and they want to lease out their property.
0:16:30.7 Those are the kinds that do tend to look – they do tend to fit more closely with the portfolio management.
0:16:38.2 So, one – owners that are new to the game, of investment properties, they’re the ones that do require that really personalized service, and they’re the ones that do really want to chat to just that one property manager that they can trust and they can continue a relationship with.
0:16:53.5 When you’re looking at owners with multiple investment properties, they’re usually owners that have – you know, they’ve been doing it for awhile now, they’ve tried out a few different property management agencies, and they do – they do know what they’re looking for.
0:17:08.0 So they’re the kind of people that are ok with the team-based situation where they just want the results, they’re not entirely focused on exactly who they’re talking to. They just want to know that their properties are being managed effectively.
0:17:20.3 The same also works for interstate investors as well. The kind that know what they’re doing because they’ve been working in investment properties for awhile. They’ve been in the property investment game for a little bit.
And they’re the ones who just want the results and to be able to call the office, find something out quick, and then that’s the end of it. You know?
Jordan: 0:17:42.8 Totally makes sense to me. And it sounds like a pretty logical progression.
0:17:45.4 So folks that are a little bit more gun shy want the handholding, they want to know that John Doe is always going to be there. It’s a common thread throughout all interactions, is the relational core that has been built out over time.
0:17:58.7 Folks that are a little bit more ruthless about just really being focused on efficiency and returns, they accept that departmentalization is kind of naturally where things head. Totally makes sense.
0:18:08.2 Alice, the other thing that you mention, was the property marketing component. Again, kind of hard to differentiate that.
But you did mention MAD Report, and I think we all know that that is kind of a gold standard moment of seriousness of commitment to actually producing an end result that is of a demonstrable quality difference for the end consumer that’s actually looking at that listing.
0:18:31.1 Any colour on how it’s gone using MAD Report? How long have you been using it? What are the costs? Who actually goes in and sets it up? Do you have a third-party do it? Does staff manage it? Tell me more.
Alice: 0:18:44.2 So, we purchase the MAD Report in 2016 from the States. And so we own it outright.
One of our marketing coordinators has trained herself with it and goes out to the properties and conducts the floor plan. 0:19:05.7 It’s been really successful.
We had property – the best example is, we had a property that was more of a higher-end property and the photos just didn’t do it justice of how the property was laid out.
0:19:19.6 So we conducted that MAD Report and a person that was living overseas couldn’t get to Brisbane to view properties before they were moving over, so the MAD Report was a real life experience for them to be able to walk through the property and then accept the property as is.
0:19:38.8 And we were able to do that – all the paperwork before they even arrived in Brisbane. So, without that technology, that tenancy wouldn’t have come to life – transpired.
Jordan: 0:19:53.2 Yeah, totally makes sense to me. What I find is that it really standardizes the consumer experience.
Because even with high-quality photos, sometimes you’re not sure if they’re using a fish eye lens, or if everything’s being done on the up and up.
0:20:07.3 Whereas, that MAD Report experience, you know, from unit to unit to unit, you know that it’s pretty much going to look like that when you’re physically present in the building.
0:20:17.6 So in terms of the cost, do you mind me asking what that hardware, that MAD Report cost?
Alice: 0:20:22.8 Australian dollars, it might be different now because they do have suppliers now in Australia.
But in 2016, when we purchased, it was roughly around $8000 Australian dollars to arrive in Australia.
Jordan: Got it.
Alice: I say open investment.
Jordan: 0:20:39.9 So was that a little bit of a leap of faith? Or was that just an obvious sort of thing and you were just kind of waiting to have access to a tool like that?
Alice: 0:20:47.8 Yeah, just progression with trying to differentiate as well as providing the best way to be able to, you know – we’re always trying to reduce days on market and to increase our audience. 0:21:03.1 So it was this natural progression that became available.
Jordan: 0:21:05.7 What are the average rents in your area?
Alice: 0:21:09.9 Overall, the whole portfolio that we manage is probably around $500 weekly rent, but we manage – yeah, from all of South-east Queensland, so we do manage a huge demographic.
Daniel: 0:21:22.4 It’s quite spread out, so we do, yeah we do have a lot of properties that are under that, but we do have a lot that are over as well, in the more premium areas.
Servicing the whole of Brisbane allows us to access those higher-end suburbs as well. 0:21:36.7 So, it’s not — $500 is probably where it averages out to.
Jordan: 0:21:40.6 Got it. Wow, and so will you do the MAD Report process for every listing? Or only for higher-end listings?
Alice: 0:21:46.2 For listings that we think we need to. At the moment we just don’t have the man-power to do it on every single listing. Ideally, that’s what we’d want to do. But we’ve got the MAD Report in the office, so technically that could be the next step.
Daniel: 0:22:04.9 I guess what it comes down to, Jordan, is that, you know, if we’ve got a property that we bring on board, and maybe the layout’s just a little bit different and then the photos just aren’t doing it justice, that MAD Report is where it can come in handy.
0:22:18.4 You mentioned before that we’re looking at a market of oversupply, so a lot of tenants are actually coming from interstate or from overseas, and anyone that has moved interstate or overseas and tried to rent a property will tell you that they’ve contacted a number of agents and they’ve told them that they need to inspect the property in person before anything will go any further or any applications will be approved. 0:22:42.5 Obviously, that’s impossible.
So, what the MAD Report allows us to do is let people basically have those virtual inspections and see the property in its entirety and be able to make that decision as to whether it suits them.
0:22:54.4 So, you know, it allows us access to all those interstate tenants as well that want to move interstate. And that’s just an extra service to our landlords.
Jordan: 0:23:02.4 What percentage of listings do you think you do the MAD Report process for? Ballpark roughly.
Daniel: 0:23:10.4 Maybe like 10%.
Jordan: 0:23:11.9 10% ok. Interesting.
0:23:12.9 Alright, so moving on to talk a little bit about the growth side of the business. Let’s talk metrics. KPIs. Daniel, how do you know that you’re doing a good job in your job? How do you ever have that assurance? What does that look like? Other than just a warm feeling in your heart.
Daniel: 0:23:31.0 The warm feeling’s definitely there but look, Jordan, it comes down to having 0:23:34.1 <Inaudible> in place.
We’ve all got our KPIs set and as long as you know what they are and you’re trying to stick to them and achieve them and push them.
0:23:43.7 If we’re talking about growth, we’re trying to not only, you know, achieve those KPIs. So if you have KPIs of maybe bringing on, say eight new properties a month, or ten new properties a month,
I think the most important thing to consider is that, yeah you’re reaching to achieve those, but, you know, as you get better at the role, and as you, maybe hire new staff or improve procedures to make them more effective, you’re looking at trying to build that number and build those KPIs higher each time. Each month. Does that make sense?
Jordan: 0:24:10.8 Yeah, it totally makes sense. So, flesh it out for me. Like, what are the KPIs that are relevant for you guys that you think are actually meaningful?
Daniel: 0:24:18.5 Ok cool. So the really meaningful ones for our BDM department obviously are the number of properties. But not just the number of properties.
You know, when you bring on – if you bring on five properties and they’re worth $350 dollars each, and then you bring on one property that’s worth $1000 dollars, you’re almost making that same amount of property off that one property.
0:24:36.7 So, it’s not only the amount of properties that you’re bringing in that you need to, you know, take account for, but for me personally, I try to look to more premium properties as well.
0:24:47.9 Because what they ultimately give us is a better service to our clients because it frees up a little bit more of our time than, you know, a number of cheaper properties.
0:24:58.8 But, it also allows us to basically go down and come just that little bit higher so that we have the potential to, for instance, higher more staff and implement procedures that will improve the client process.
Jordan: 0:25:10.5 Let’s talk about discounting. How much leeway do you have and what do you do to resist caving on price?
Daniel: 0:25:19.3 Jordan, we actually don’t discount our properties. We don’t discount our management fees. It’s that simple.
0:25:26.3 When we look at other property management agencies, we are definitely not the cheapest around, and we know that, but the reason that we charge the amount that we do, is because we know that we’re worth it.
0:25:38.8 And we can definitely – if we’re sitting down with a landlord and going through our full procedure of how we 0:25:44.2 – 0:25:47.3 do things, we definitely are able to convey that we are definitely worth it.
Jordan: 0:25:56.8 Got it.
Daniel: 0:25:56.1 Sorry Jordan, are you there?
Jordan: Yeah, yeah, I’m there. You dropped for a second. I think we’re ok. I think the audio is still good. Alright, give me one second here to make sure we’re still on track. I think we’ve got it on the backup recording. Let me make sure we’re still going. 0:26:18.2
0:26:20.0 Awesome. So I love that you’re coming from that position of strength.
Can you just kind of talk me through what that does for you psychologically. To know that those are the defined parameters and to know that there are no exits, your back’s against the wall, however you want to put it.
0:26:33.4 How do you feel like the psychology of knowing that you can’t discount affects how you relate to that conversation?
Daniel: 0:26:42.2 Look. I think when you set that as a rule for yourself and you say, look, you know, if you’re new to BDM you may feel like you’ve got a lot of pressure from clients who want to discuss prices and where you want to discount and all that sort of stuff.
But, when you know that you’re worth the money that you’re charging and when you set yourself a rule of, ‘that’s it we’re not reducing that fee’ because we are worth it, the psychological impacts are really positive.
0:27:07.0 So, when you – I guess, from my experience, if I brought on a property, you know, in my early days, and we’ve dropped the fees that we’re charging, it feels like we’re doing a lot of work and we’re not getting, you know, we’re not getting substantial payment for it. 0:27:22.2 It’s not – It’s only just kind of just breaking even, just covering itself.
0:27:27.2 And, you know, when you discount your services, you’re kind of discounting your worth. You’re discounting your, I guess, the confidence you have in yourself.
0:27:37.1 So yeah, the psychological impacts – to be able to say that, “This is our fee we don’t reduce it, would you like to sign with us or not?” — it’s very, very – it’s very beneficial because you just feel a little more empowered knowing that, you know, people are willing to pay that amount if you can prove that your services are worth it.
Jordan: 0:27:55.4 Yeah, totally makes sense. And obviously it’s a qualification piece as well.
Do you feel like oftentimes, if the conversation devolves on the basis of discounting that – you’re essentially allowing the client to make the choice that you eventually may have had to make for them? Meaning that it just isn’t going to be a fit long-term.
Daniel: 0:28:16.1 Exactly yeah. Look, if – in my experience, if I come across an owner who’s, you know, heavily talking accounting, chances are, down the track they’re going to be a little bit harder to manage.
0:28:29.8 They’re going to, you know, that discount is always going to be in lease renewal might come up down the track and they want to wave the lease renewal fee.
0:28:36.9 When you’re dealing with owners and you set your standards initially and say, “No these are the fees that don’t – we’re not discounting these,” then that expectation of service is there.
0:28:45.9 And as long as you continue to provide that, then those owners are generally happy to continue paying that service fee.
0:28:53.3 I guess the conversation that I have with a lot of landlords is that, you know – when you’re talking property management, people try and discount fees by maybe, you know, 1-2%.
If you’re looking at a $400 dollar a week property and someone tries to talk you down 1% each week, that’s like $4 dollars. It’s a cup of coffee each week.
0:29:07.9 And it doesn’t sound like much for an agency to pay, but when you times that by, you know, 52 weeks a year and times that by 150 properties, you’re looking at a substantial amount of money.
0:29:17.2 And that amount of money is the kind of – the kind of money that you’d use to employ another person.
0:29:24.7 And that’s where I think a lot of other agencies can suffer. Is that they reduce their fees and what that does, it’s not just about reducing a fee on a single property, it’s about reducing the total income over a portfolio and it may not be enough to hire that extra staff member when you grow your business.
0:29:40.2 And as such, a lot of businesses, a lot of property management agencies, I believe, crumble a little bit in their service because they’re expanding too fast and not having the income to hire the extra people to deal with that.
Jordan: 0:29:51.5 Man, preach it brother! I am so with you. So for those of you at home with the pencil and paper in front of you, I want you to do some quick math.
I want – just think about an example scenario. 0:30:03.7 A property management business, let’s say they’re doing $400,000 dollars in annual revenue.
They’re at 12% profitability. And they’re charging an average of an 8% management fee.
0:30:15.8 So we’ve got to assume what percentage of their management – what percentage of their overall revenue comes from the management fee versus other ancillary fees.
0:30:25.0 Let’s assume 65% of their overall revenue. 65% of that 400K comes from management fee revenue.
0:30:35.0 So the question that I have with that kind of a scenario, and I realize it’s hard to just hear audibly, but you can write this down. Do the math. Tell me if I’m wrong.
0:30:43.7 The math on this is that for a company like that, at 12% profitability, they’re going to be making around $48,000 in profit.
If they were to increase their management fee by .5% or put another way, if they were to fight and not reduce from 8.5% to 8% consistently, that half point in the scenario that I described is a difference of 29% in overall profit.
So 12% profit versus 15.4% profit. Think about that. Think about the long-term implications of doing the math.
0:31:27.7 If you knew that the difference in your profit was around 30 – you could essentially have a 30% bump in profit by holding your ground on a half point in the management fee, would it make a difference in how you would relate to actually fighting over that.
0:31:44.4 And for defending what you’re worth. 0:31:46.2 And if nothing else, long-term, for becoming valuable enough to actually charge that much.
There’s so much that’s wrapped up in the pricing beyond just the dollars. Like, it’s easy to simplify it in the context of a conversation with a client, as if it doesn’t matter all that much.
0:32:02.6 But long-term, your margins really are your destiny.
0:32:07.2 If you’re not making much money, you can’t provide much service. It’s pretty inescapable. You guys with me?
Daniel: 0:32:16.4 Yeah, I think you’re on point with that Jordan. And like I can say, real estate – when I’m in the real estate industry, we’re in a service industry. 0:32:22.0 And services are a really hard thing to sell. You know. It’s intangible.
0:32:27.4 So, one of these things that you’ve got to look at is yeah, like you said, that extra money that you’re making, if you’re not making that extra money as your business grows, then your service is what’s going to fall down.
And that, nine times out of ten, is going to be your strongest point of difference. 0:32:41.4 Not for the initial conversation with, you know, potential landlords, but for your current existing ones.
0:32:46.6 That’s the reason why they stay. You’ve got all these different aspects of your business which you market as the reason people come on board with you, but the reason they stay is because of your service.
0:32:55.9 And if you’re going to grow your business and you’re not going to increase your revenue enough to continue that exemplary service, then people are going to leave. 0:33:02.7 And it’s that simple. 0:33:02.7
Jordan: 0:33:04.4 So let’s talk a little bit about scaling challenges. Alice, you in particular, what do you see changing as the business grows?
Do you guys have any clear growth goals over the next three to five years? What does that look like? And what do you think is going to need to shift in the business in order to make that transition happen?
Alice: 0:33:25.5 So I said there’s a lot of external factors as well, in the industry. There will be disruptors. In every service industry there were will be different disruptors, but our point of difference is the human element.
0:33:43.7 So we need to, as Daniel’s discussed, customer service is our number one differentiation between our traditional business model competitors as well as the disruptors that will come in the future.
0:33:58.7 So, we need to work out how to future proof our business as well, and to continually evolve with the technology but also maintain that highly personal customer service approach as well.
Jordan: 0:34:15.3 So how do you gauge customer satisfaction? Do you guys do NPS scores? Do you look at churn? How do you keep a read on that?
Alice: 0:34:26.1 We use a customer monitor system. But we’re looking at implementing NPS. And that’s – it’s very hard with property management to – we’ve got KPIs, but it’s – we need to look externally for our KPIs, so I’ve looked at the NPS model and it works amazingly to individualize the scores for each team member.
0:34:49.6 So we’re looking at implementing NPS this year. 0:34:53.5 We’re currently using a different system that tracks external performance.
Jordan: 0:34:59.5 What does reputation management look like in Australia? This isn’t something I’ve really looked into. Do you guys – where do people leave reviews for businesses? Like Yawls 0:35:08.6 and how much of an impact does it have in your business?
Alice: 0:35:13.5 Ok. Google reviews – Australia is an interesting kind of tree. We all seem to have iPhones and we all seem to stick to the one thing. We can’t have multiple options going at the same time.
0:35:28.1 So, there are a lot of different review sites out there, but Google is the number one review site for our industry. 0:35:35.1 And …
Daniel: 0:35:39.1 Yeah, we basically touch base with our clients. You know, like I said before, when we touch base to ask for referrals, we’re also looking to make sure that, you know, if we’ve got satisfied customers, that they are leaving those reviews on Google.
0:35:51.5 You know, the reason for that’s two-fold. Obviously, you know, Google with all its algorithms, we want to make sure that it’s putting us, basically on the first page at the top, as much as possible, based on, you know, having a lot of positive reviews.
0:36:03.8 But also, yeah, like I was saying, there seems to be a bit of a trend in Australia where we don’t – we don’t tend to use every review site out there as customers as clients. 0:36:13.9 So, Google Reviews is the number one go-to.
Jordan: 0:36:17.9 Fantastic. So guys, I want to transition to the rapid-fire section of the interview. I’m going to ask you a series of questions and I really just want to get guttural answers from the both of you. We do this in every interview and the questions are always a little bit different.
0:36:29.9 But Alice, I’m going to start with you. 0:36:32.5 Alice, in your opinion, what’s the most underrated skill set in managing and leading a team?
Alice: 0:36:41.0 Underrated? I think just being able to be flexible and not micro-managing. Just being trusting. Trust is probably a very underutilized skill.
Jordan: 0:36:55.2 So recruit well and let folks actually do their job.
Alice: 0:36:58.5 Yes. Provide the training and support and let people just be and grow.
Jordan: 0:37:04.9 Daniel, what is the most frequent objection that you hear from prospects and what’s your reply?
Daniel: 0:37:12.9 The most frequent objection is actually, again, the fees, which I’ve sort of touched on how we deal with that.
But also, for – this is an interesting one – for owners that are currently occupying their homes and are moving out, obviously anyone that’s dealt with any kind of property management before understands the concept of ‘entry condition reports’ and ‘exit condition reports’.
0:37:38.3 And we actually quite often – and this is something that we’re sort of combatting at the moment, is having landlords that move out of their properties and clean it themselves. 0:37:50.1 But, you know, everyone’s opinion of clean is a little bit different.
0:37:54.1 So when you’re dealing with people that, you know, don’t want to pay for that extra professional cleaning because it’s cleaned already, that’s always a challenge. And that’s something that we have to get over, because once the tenants move in there, if it’s not, you know, up to, you know, perfect scratch, then the tenants aren’t going to leave it up to perfect scratch either.
Jordan: 0:38:10.7 Alright. So a little bit of nuance there. That totally makes sense.
Jordan: 0:38:15.2 Alice, who do you learn from?
Alice: 0:38:17.7 I’ve got some advisors in the industry and I wish I’d found them – oh I did actually find them quite early on, which has really helped.
0:38:25.7 So, in Queensland, Stacey Holt is one of the most amazing advisors that I’ve come across and she provides all the policies and procedures and the templates just to help so we don’t have to be creating our own.
0:38:40.4 Sort of independent, a lot of franchises all those there but being an independent, that has really helped. And she’s – she provides ongoing advice for us whenever we have an interesting situation. 0:38:56.3 And then you’ve Tara Bradbury BDM training.
Jordan: 0:38:59.8 Awesome. Daniel, what books have impacted you the most?
Daniel: 0:39:04.3 What books? 0:39:05.5
0:39:06.6 So there’s two books at the moment that I’ve recently read which I personally just loved. The first one is about communication, right?
0:39:14.1 And it basically – this one I actually found on Alice’s desk. 0:39:19.4 And this one basically relates to the conversation with potential clients as a game of tennis.
I don’t know if you’ve heard that analogy before, Jordan. Basically – it basically says that you’ve got a message the you want to get across to your client and if you just blurt it out there and get it out there and slam it in their face, it’s like an ace.
It’s like serving an ace in tennis. 0:39:40.4 You can serve it, it’s done, but you’re – the person you’re engaging with is probably just going to stand there looking a little bit confused as to what just happened.
0:39:49.9 And this kind of – this book, it kind of challenges that concept and says that you need to kind of not deliver everything straight at once.
0:39:59.9 Keep everything going like a rally. A conversation needs to be between two people, not just between one. 0:40:06.4 And I found that kind of analogy through that book really, really, really helpful.
Jordan: 0:40:11.6 What’s the name of the book?
Daniel: 0:40:13.3 The name of the book is called, 0:40:21.4
0:40:21.5 I’ll have to look it up for you Jordan and message it through to you.
Jordan: 0:40:25.1 Fair enough.
Daniel: 0:40:29.6 I read it a few months ago. The other one that really made an impact on me was actually the book from The Wolf of Wall Street.
0:40:36.2 And it’s called, Straight Line Selling. I don’t know if you’ve heard of that one, but that basically goes through the process that Jordan Belfort taught his – taught all of his staff when he went through the big wolf of Wall Street phase about straight line selling.
0:40:49.2 How if you’ve got, you know – imagine a line and at the beginning of the line you write the number one. And at the end of the line you’ve got the number ten. Somewhere in the middle there is five.
0:40:59.5 And basically, the idea was that people don’t buy into you for your service, they buy into you for you.
0:41:05.5 And you need to connect with these people and gauge them when you first initially meet them on, basically, how well they like you.
0:41:13.2 And if they’re sitting at about a five, you need to try and engage with them, earn their trust, build up some rapport until you move them along that line.
0:41:20.8 And if you try and close a deal with them and they’re sitting at below a seven, it’s just not going to happen. It’s going to be case closed.
You need to get them right up to the eight, nines and tens in terms of, you know, how much they trust you and value your opinion and how much they connect with you before you can close any kind of business.
0:41:36.1 Otherwise, they’re just going to, you know, shut the book and not return.
Jordan: 0:41:41.2 Rapport.
Daniel: 0:41:43.2 So I found that interesting as well. So that’s Straight Line Selling. I think The Art of Persuasion.
Jordan: 0:41:50.8 Alright. So we’ll link up to both of these. I’m 100% with you on building rapport and using trust as the ultimate yardstick. That really is where all logical decisions ultimately flow from.
0:42:03.4 Alice, what’s the number one thing that you see property management entrepreneurs BS’ing about? Where do you see folks just kind of blowing smoke?
When you’re at an event, you’re networking, and folks are just kind of, maybe throwing out some stats that you kind of question. 0:42:22.7 Where would you be most likely to call BS if you had a magic wand and you could just kind of see under the curtain of every company within the industry.
Alice: 0:42:32.6 I think that applies to nearly every company. Doesn’t have to be real estate, does it? Just – that’s a tricky one, because a lot of the numbers – people can just say numbers, but if you actually look at their books, it’s not the way it’s done. That’s a tricky one Jordan.
0:42:51.5 – 0:42:54.0
Daniel: 0:42:54.1 One of the things that you can, I guess, instantly call BS on is, you know, everyone reads all these articles and statistics about how the industry is doing.
One such thing is that, you know, in Brisbane, particularly, we have a massive oversupply of units. 0:43:11.4 And, although we have a massive oversupply, 0:43:14.5 <Inaudible> developers are still building them.
The influx of people moving up to Brisbane from, maybe Melbourne or Sydney, it hasn’t arrived as fast as we’d expect. 0:43:23.6 So there’s a lot of units that people have bought as investment properties that are now sitting vacant or are taking a lot of time to lease out. 0:43:29.4 So, the BS in that is that, I guess, you know, if you had your magic wand and you could wave it around and just point it at 0:43:34.8 – 0:43:39.6
0:43:40.7 anything, is that 0:43:41.6 – 0:43:48.0
0:43:49.2 I guess yeah, the BS in that is that, you know, if you buy an investment property, that’s it. It’s going to be rented and it’s going to be a quick process and you’re going to have a tenant in there forever.
0:43:57.7 There’s a lot of things that go into managing properties and there’s a lot of things that investment owners need to think about when they purchase a property. You know?
0:44:04.3 It’s not just buying a property and then receiving a rental income and hoping that your rental income is more than your mortgage.
0:44:10.0 There’s a lot of other things to consider. So I guess, yeah, in terms of waving the BS wand, you could look at it being a simple process.
Jordan: 0:44:19.1 Sure, yeah. Fair enough. I mean, a couple of months of a vacant unit will mess with any cashflow analysis pretty quickly. 0:44:27.0 What’s the average time 0:44:27.6 <Inaudible> market that you guys see in your area?
Daniel: 0:44:31.5 In our area, it can be around three to four week mark, but we try to aim under two.
Jordan: 0:44:37.6 Awesome. Final question of the interview. 0:44:42.3 Daniel, in your opinion, what’s the difference between a good BDM and a great BDM?
Daniel: 0:44:49.0 I guess the difference between a good BDM and a great BDM is, look, there’s so many things that we can learn as a BDM.
You know, you’ve got a number of different training events to go to. You’ve got a number of different trainers to learn from.
0:45:02.4 At the end of the day, and this is something that, you know, as a starting BDM, it’s not something that you really, I guess, see examples of in your own work until down the track – but you just need to put in the work.
0:45:16.0 And that’s probably the one thing that, I guess, if there was any piece of advice to offer to future BDMs, it would be that you need to put in the work. You need to call people, you need to grow your pipeline of people that are coming into the business that you’re talking to.
0:45:28.2 Because it’s not until – it’s not until you have a, I guess, a down week or a down month where you didn’t pull in a lot of business that you realize the reason for that is because you didn’t do a lot of work last month.
Jordan: 0:45:41.5 Love it. ‘P’ word. ‘Pipeline’. This invisible thing that kind of determines your future. I love that you brought that up. Alright. I lied.
Final, final question of the interview. 0:45:51.9 Alice, what does a well-run meeting look like to you?
Alice: 0:45:55.8 A well-run meeting?
Jordan: 0:45:58.4 Yeah.
Alice: 0:46:01.5 For our team you mean?
Jordan: 0:46:02.5 You’ve been in bad meetings, I’ve been in bad meetings, Daniel’s been in poorly run meetings, what does a well-run meeting look like in your opinion? 0:46:10.3
Alice: 0:46:11.0 You need to have an agenda. Start with the agenda in mind, address what you’re going to discuss and go through the points there. Leave room silence. Leave space to be quiet.
Alice: 0:46:26.3 And let the other person talk as well. Be interested, not interesting. And provide – be on time as well. Provide knowledge and your expert opinion.
Jordan: 0:46:46.3 Have a plan. Listen. Go in prepared. Well, guys, I really appreciate you coming on the podcast. 0:46:53.5 If folks want to learn a little bit more about Calibre, about the business, about what you guys are up to, what’s the best place for them to go?
Alice: 0:47:01.5 To our website, which is CalibreRealEstate.com.au, or find us on any social media channel.
Jordan: 0:47:07.7 Love it. Thanks for taking the time guys, let’s stay in touch. And next time I’m over in your neck of the woods, let’s break bread.
Alice: 0:47:16.1 Thanks Jordan. Appreciate it.
Daniel: Look forward to it, thanks for that.