Hannah Gill on Building a High Performing Sales Team
Hannah stepped up to managing director after spending six years as a BDM, where she built a successful new business and a leasing team of 12 people.
In this interview, Hannah shares where most property management entrepreneurs go wrong when it comes to building out a sales team.
So if you’ve struggled with that in the past, if you’ve made a hire or two and it just hasn’t worked out, or if you have a sales team in place right now but you’re wondering if they’re performing at maximal capacity, then this is the episode for you.
- (01:33) – Background leading up to today
- (01:38) – Hannah discusses how she first became involved in the property management industry.
- (02:22) – How she made the transition to the role of business development.
- (03:21) – How her previous experience as a property manager influenced here success in business development.
- (04:15) – The nature of her training or lack thereof.
- (05:49) – What Hannah now considers to be good training for the BD role.
- (06:53) – Independent Property Group
- (07:14) – Hannah explains how IPG’s positioning and branding differentiates itself in the marketplace.
- (08:08) – Numbers and specifics of their success.
- (09:37) – Discussing the structure of IPG and how the property management side functions with the brokerage side.
- (10:14) – Capitalizing on new construction in Canberra.
- (10:47) – Building relationships with local builders and developers.
- (11:59) – Processing leads; inbound versus outbound.
- (13:09) – The details of IPG’s new long-lease program.
- (13:39) – How IPG works to get existing owners to purchase new properties.
- (07:14) – Hannah explains how IPG’s positioning and branding differentiates itself in the marketplace.
- (16:32) – Building and managing a sales team
- (16:49) – Hannah shares the details on the hiring and on-boarding process.
- (16:49) – Internal versus external recruitment.
- (17:37) – Keeping a pipeline of potential recruits.
- (18:24) – Maintaining an ‘attraction business’.
- (18:29) – The importance of team culture.
- (19:20) – The practicalities of creating such a culture.
- (20:19) – Hannah’s views on temperament as it relates to hiring for specific roles.
- (21:38) – Keeping the team accountable and productive.
- (22:45) – Compensation and incentive models at IPG.
- (23:58) – Leeway for negotiation.
- (25:00) – Connecting individual performance to the long-term performance of a property.
- (16:49) – Hannah shares the details on the hiring and on-boarding process.
- (26:00) – Leveling up
- (26:39) – Hannah’s thoughts on the continued growth of IPG.
- (26:50) – The importance for the PMs to understand the long-term costs to the business with the loss of a property.
- (27:05) – Developing awareness by sharing the numbers and the math.
- (29:08) – Hannah’s five to ten year growth trajectory for IPG.
- (30:04) – The use of AI and automation to further growth.
- (30:22) – Practical examples to impact IPG.
- (31:42) – IPG’s time tracking initiative.
- (30:22) – Practical examples to impact IPG.
- (30:04) – The use of AI and automation to further growth.
- (36:27) – Hannah discusses whether she analyzes the quality of her portfolio.
- (37:26) – The process for firing clients.
- (38:38) – What is the most frequent objection from prospects, and what was your response?
- (40:11) – What is the most overused selling point that you hear agencies leading with?
- (40:33) – Who do you learn from?
- (42:00) – What is the biggest threat to your business?
- (44:15) – If you could do it all over again, what advice would you give to yourself at the beginning of your career in property management?
- The Effective Executive: The Definitive Guide to Getting the Right Things Done, Peter Drucker (33:17) – Time management resource recommended by both Jordan and Hannah.
- Darren Hardy (34:14) – Motivational speaker and best selling author.
- L’art de la Simplicité (The English Edition): How to Live More With Less, Dominique Loreau (41:30) – Reading resource highly recommended by Hannah.
- Slow, Brooke McAlary (41:32) – Reading resource recommended by Hannah.
Where to learn more:
To get in touch with Hannah, tune into the show for her personal email and contact number.
Jordan: 0:00:00.1 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 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 that you need to get to the next level.
0:00:28.5 Today I’m talking with Hannah Gill, the managing director at Independent Property Group, the largest real estate and property management agency in Australia’s capital, Canberra. 0:00:38.8 Hannah stepped up to managing director after spending six years as a BDM, where she built a successful new business and a leasing team of 12 0:00:46.8 [Inaudible – Recording Glitch].
0:00:48.0 In this interview, Hannah shares where most property management entrepreneurs go wrong when it comes to hiring and managing a sales force. And the exact steps that you can avoid 0:00:58.3
0:00:59.6 In this interview, Hannah shares where most property management entrepreneurs go wrong when it comes to building out a sales team.
So if you’ve struggled with that in the past, if you’ve made a hire or two and it just hasn’t worked out, or if you have a sales team in place right now but you’re wondering if they’re performing at maximal capacity, then this is the episode for you.
0:01:18.4 As always, if you enjoy the show, head over to iTunes, leave us a review. The more reviews we get the better we are able to recruit top-tier guests.
0:01:27.1 Let’s go ahead and dive in, welcome to the show Hannah.
Hannah: 0:01:31.1 Thanks Jordan, pleased to be here.
Jordan: 0:01:33.3 So, Hannah, I just want to start here: how did you get into the property management industry?
Hannah: 0:01:38.7 Ah well, I was actually looking for a career rather than a job. And it was just after my 21st birthday and I sort of was getting sick of working a number of casual jobs, and I thought what opportunity or industry will create a pathway and a career for me.
0:01:52.9 And property management seemed like a really interesting place to start out. And that was ten years ago this year.
Jordan: 0:01:57.7 Wow, fantastic. So, first role, where in the business did you start?
Hannah: 0:02:03.2 Yeah, as many of us do, I was sort of thrown in the deep end as a property manager. I didn’t know much about what that actually meant in real terms.
It sounded interesting to me, as I said, and I just sort of learned from there and found my way through experiences and learned from the people around me.
Jordan: 0:02:22.3 Makes a ton of sense, a lot of people start in that role. But eventually you transitioned more into the business development function of the business.
0:02:28.8 How did that happen? Where you kind of pushed into to that role or was that just something that stood out as a place that you wanted to navigate towards?
Hannah: 0:02:37.2 Yeah it certainly stood out as something that was really interesting to me. The capacity to get in front of people and build new relationships was really appealing.
0:02:43.6 Having sort of, as we do, inherited a portfolio that wasn’t necessarily in the best shape – and you’ve got some disengaged clients – I found that at the time, as a property manager, a really great challenge to improve those relationships.
0:02:56.2 But then I thought I’d love to be able to get to the front of this relationship at the very beginning. 0:03:00.5 And set the expectations right from the start.
0:03:04.6 And I sort of fell into the role naturally. We’d had a long term BD in the team and she left. I kept putting my hand up saying I was interested and I actually recall I got a call on my day off asking me to come in to have a chat about the role. 0:03:20.5 And the rest sort of just fell into place from there. Which was really exciting.
Jordan: 0:03:21.8 So do you think that your background as a property manager – did that better position you to act in a business development role in light of the fact that you actually understood what it looked like to hand that client off and to hand them – basically have them get on-boarded, as opposed to just having the sales background and maybe not necessarily having as much context for what that client relationship looked like on a more long-term perspective within the business?
Hannah: 0:03:50.5 Yeah, look, I think having the property management background I can attribute to a huge part of my success in the BD role.
While I didn’t have a lot of the sales skills around scripts and dialogues, with a background in PM they were very easy to learn. And they are very easy to learn – those sorts of skills.
0:04:08.3 But just having that really thorough, in-depth knowledge of property management, that really helped with my success as a BD.
Jordan: 0:04:15.6 So you mentioned that you were thrown into the deep end with property management.
Did you receive any training in your business development role? Did you also just kind of figure that out as you went?
Hannah: 0:04:25.6 Well, with my predecessor moving to a different agency, I had a week with her. I remember attending an appraisal with her and watching her do it.
0:04:36.0 And I remember her attending an appraisal with me, which I fumbled my way through. 0:04:40.7 And it was probably the worst 40 minutes of my client’s life, unfortunately.
0:04:45.6 But I always like being thrown in the deep end because I can find my groove and I can put systems into place that really worked for me rather than sort of inheriting systems that I might have become accustomed to, but may not have been the best for me in the way that I operate.
0:05:01.9 So I was quite happy with that. And although it was a bit overwhelming, I think it was the best thing for me.
Jordan: 0:05:08.0 Wow. Alright guys, so as you’re listening at home, realize that we’ve just met the exception to the rule.
0:05:14.4 While that is really inspiring what you just articulated, I think for most people, they actually prefer to have some training rather than – I hear what you’re saying.
0:05:22.6 What I hear you saying is, being in a position where you didn’t have any training, you were able to ask ‘why?’ on the deepest level and kind of build, like from first principles as opposed to just having, “This is the way it’s always been done and this is the way that you should do it.”
0:05:36.1 That makes sense to me. At the same time, surely as you’ve kind of got into that role and put in some other people behind you, there was a bit more training and scripts, dialogues, whatever it may be.
0:05:49.8 What does that look like for you now? What do you view good training looking like for somebody in a BD role?
Hannah: 0:05:58.9 Ah look, I mean, that’s an endless sort of answer isn’t it? I mean, I don’t think you can ever do too much training.
While I was happy to take the initiative, as you’ve alluded to, when asked those ‘why’ questions, I certainly wouldn’t want or expect my team members to be doing that every time someone joined us.
0:06:13.3 So absolutely, you’re right. Once I sort of found my footing, I put – I really defined the processes and the systems and what worked well for me. And was able to replicate and train others with those systems.
0:06:24.9 But what works well, I think, for business development training, is really looking at it holistically.
I think, absolutely there’s a place for scripts and dialogues. And they are important. I think the confidence around networking, around negotiating. And the capacity to think on your feet with numbers, with finding a talking point of commonality.
0:06:44.7 So, really, the training needs to be holistic. It can’t just be on scripts and dialogues. 0:06:47.5 And that’s what I’ve found has helped my team grow quite quickly.
Jordan: 0:06:53.5 Ok. So let’s back it up even further than that. Let’s talk about positioning. Within the market, where is your company positioning? How is the branding or the positioning differentiated from other companies and how do you train your staff to articulate that in a way that feels different than just, “My script and dialogue is better than your script and dialogue”?
Hannah: 0:07:14.4 Yeah, absolutely. I mean, we’re actually celebrating 60 years in – under a number of different brands. So 60 years celebration of our group this year. So, we’ve evolved a lot over that time. In our marketplace we’re really well a known brand.
0:07:28.7 We do a lot in the community space, which, in our community in Canberra, that’s really appreciated and that’s really valued.
We’ve got a charity foundation, for example, that the team are quite active in participating in. So that’s really important to us.
0:07:41.5 But in terms of the brand itself, the positioning is really around our success. Our capacity to share previous results, our ability to talk about what we have achieved and why that’s relevant and important for our clients.
0:07:55.6 That’s where we’re able to win new business because of our scale and because of our systems and processes, we are consistently exceeding the marketplace expectations and that’s what wins us business.
Jordan: 0:08:08.7 So what are some of the specific claims? Like, how can you actually articulate that in a way that somebody can really believe by hearing, like specific numbers or metrics? What does that look like in practice?
Hannah: 0:08:20.1 Yeah sure. So at the moment we manage around four and a half thousand properties and vacancy rates in Canberra for the last 12 months have sort of sat around one to two percent, depending on the area.
0:08:29.6 Our vacancy rate has 0.4%, I think was the highest we had last year. 0:08:37.1 And that’s pretty powerful. When we’re talking four and a half thousand properties – the end of last month I had four vacant properties on our books.
Hannah: 0:08:45.6 Yeah, and you know, that’s a reflection obviously of the market, to some degree. But it’s also a reflection of our capacity to have people on the ground showing prospective tenants and getting them into the right property as quickly as possible.
0:08:56.8 And obviously, for an investor, that’s a pretty big selling point.
Jordan: 0:09:02.0 Yeah, I love that. So, I always love hearing math actually get brought into the equation. There are so many banal, generalized claims.
Things like, honestly what you just mentioned. We’ve been in the business for so many years. You know, that’s great, but what is that really going to do for me as an investor. But what you just mentioned about no down time, well that’s money in hand. Right?
Hannah: 0:09:22.4 Absolutely. Absolutely. So that’s the thing. There’s no value in our marketplace if everyone can say they’ve been around for awhile.
So it certainly is drilling down into what that actually means in real terms and how that’s going to make our clients money. And create wealth for them.
Jordan: 0:09:37.0 So, in terms of what the structure of what the business looks like, is the property management side of the business any larger or smaller than the brokerage? How do those two operations function together and how large are they proportionately?
Hannah: 0:09:52.4 So we’ve got six sales teams under the independent brand. They’re partnership offices. And the property management is wholly owned by the group.
0:09:59.8 We do have shareholders, of course, which are a part of the group. 0:10:02.7 So, we do receive referrals and we work very closely with our sales team for the opportunity to get referrals.
But a good opportunity for us is also that we have quite a big project marketing team. 0:10:14.5 So in Canberra, there’s a lot of new developments being built. There have been for the last five or so years. And those new developments have really been the cream on top for us.
0:10:24.3 We were able to double the size of our rent roll in a four year period. Predominantly from project stock.
Jordan: 0:10:29.3 Ok. So just to be clear, we’re talking about new construction?
Hannah: 0:10:34.2 Yeah, yep. Like, high rise, townhouse developments, apartment blocks. There’s a load of that happening in our market at the moment.
So being able to capitalize on that and work with local builders and developers has been a really great opportunity for us to grow quite quickly.
Jordan: 0:10:47.4 So what exactly does that relationship look like in practice?
Hannah: 0:10:52.7 In my time as a BD, that’s when we really started to be able to leverage those relationships.
So, I work still very closely with builders and developers right across Canberra. 0:11:03.2 They know that we’ve got the scale and the staffing to be able to service the development of 70 or 100 units at one time and get them leased very, very quickly.
0:11:12.6 We’ve been, you know, well and truly low days on market. So, for us to be out of work with a client and picked up 75 listings in one hit is hugely beneficial, but they also have faith in our capacity to do that because we’ve done it time and time again.
Jordan: 0:11:25.2 Got it. So you’re talking about a situation where the builder or the developer maintains the property, not new construction where they’re selling to independent landlords and referring you as a manager?
Hannah: 0:11:36.7 There’s a mix of both. I’ve probably got about half a dozen key developers that I’ve worked with and, as an example, I’ve picked up 24 last week and another 48 the week before from those sort of clients.
0:11:48.7 But there’s still no shortage of individual mom and dad investors buying in these developments as well. It just depends on the developer and the location of their site at the time.
Jordan: 0:11:59.2 Got it. So that sounds amazing to me. And obviously, getting referrals from the brokerage side of the business is also really exciting.
How do you view that processing those types of leads though, versus outbound prospecting? If you were to bring on a new BD, would you have them doing a mix of both?
Do you segment those roles? Because obviously, inbound is very different than outbound.
Hannah: 0:12:21.9 Yeah, absolutely. Look, I’m a big believer in servicing the relationships that are closest to us.
0:12:29.0 So, my focus is working really closely with our sales team, our finance team and our current clients in property management.
0:12:37.1 Because I believe there’s so many opportunities that generally remain untapped in those relationships. So my current new business team focus on existing relationships.
0:12:48.3 Because of the scale we’ve got, we don’t have a huge need to focus outbound and we really grow through word-of-mouth and internal referrals more than anything. 0:12:57.5 Which is obviously a great position to be in.
Jordan: Of course.
Hannah: 0:13:01.2 In terms of outbound, it’s more around how can we enter the market in a strategic way and provide something new to clients that doesn’t currently exist.
0:13:09.3 So, for example, we’ve just rolled out a long-lease program. Which basically, we’re offering to owners and tenants that if they join us, we’re happy to sign a lease for three to five years.
0:13:20.0 And by doing that we save the owner a lot of money, we save additional wear and tear. The tenant has peace of mind around what the rent increase is going to look like year on year.
0:13:29.0 So, rather than just hitting the market and saying, “We’re the best”, we’re actually trying to find ways to provide a new opportunity to the market that doesn’t currently exist.
Jordan: 0:13:39.2 Yeah, makes a ton of sense. So in terms of working the existing clients that you have, and particularly helping them buy more properties, is that more reactive?
Do you wait for them to raise their hand? Do you reach out to them and ever put deals in front of investors for purchasing a new property?
How do you actually get existing clients to buy more properties that you can manage?
Hannah: 0:14:00.3 That’s probably my big project at the moment. Connecting those dots. I believe that we – currently it’s reactive. More often than not.
But I believe that we’re in a position where we can be proactive about it and that comes back to conversations around property health checks, reviewing of interest rates, reviewing of equity in property.
And then actually acting as like a concierge buyer’s agent service from the property management team. 0:14:25.8 Because they already trust us, they have the relationship with us. 0:14:28.6 And finding them additional properties from our department.
0:14:31.9 So that’s probably my big project at the moment. I’m mapping that out and rolling that out and looking to recruit for that position right now.
Jordan: 0:14:38.3 So when you say finding them properties from your department, if you have a client that – an existing client that says, “Hey, I’m going to be selling my unit”, will you ever put that inventory, that home, in front of existing clients to consider potentially purchasing it from another existing client?
Hannah: 0:14:56.8 Yeah, that’s the idea. Or from – or for a tenant to purchase. And then not only stock that exists in our rent roll, but stock that our projects team might be selling.
0:15:07.5 For example, if we have a client that we do a health check for and they’ve owned the property for five years, we might refer them to our finance team.
0:15:16.3 Let’s say they’ve got $40-50,000 dollars equity, that’s going to buy you another investment property in Canberra.
0:15:20.3 So then going back to them and saying, “What are you looking for in a property? Let us find it for you.”
0:15:26.9 So we’re creating the opportunity, we’re taking the hassle away for them. But it obviously – the flow and effect is that we get additional business out of it.
Jordan: 0:15:34.0 So you’re saying that that’s a challenge for you to flesh out that program. Do you think that that is something that any existing property manager could take on?
Or do you view that as potentially being a more specialized role for somebody to make that a bigger part of their focus as an individual acting in more of a concierge type fashion?
Hannah: 0:15:56.6 Yeah, to start with I certainly want to structure it as a new position. We’ve got a really great team of people here, but they’re already doing so much in their day-to-day roles as property managers and this role really requires those sales skills. 0:16:10.5 Subtly, obviously.
But the necessity to be able to ask the question, to be able to get in front of someone and have a really holistic understanding around finance and around interest rates and so on.
0:16:21.7 My team could do that, but I’m conscious that I really would like them to continue to keep building on the relationships they have rather than trying to up-sell and cross-sell to those clients.
Jordan: 0:16:32.3 Yeah, that totally makes sense. So, one of the things I wanted to ask you about was the hiring process for somebody in the BD role.
0:16:40.4 What are you looking for? What does the hiring process look like? And what is that initial on-boarding process look like?
Hannah: 0:16:49.4 Yeah, that’s an interesting one. I mean, traditionally we’ve always recruited for those BD roles, and even leasing roles, internally.
0:16:54.6 We tend to – well, my team tend to view the sort of natural progression from PM to leasing to new business.
Hannah: 0:17:04.7 Yeah, that is interesting, because I know a lot of businesses sort of, have different views on that as well. But that’s been the case here for a long time now.
More recently, I’ve actually gone external. 0:17:18.5 I’ve had a couple of key roles I’ve needed to fill. Really high-level roles, so I’ve recently recruited a role we’ve called, Head of Property Management Growth.
0:17:26.8 So, that’s not a BD role, that’s a role looking for strategic business opportunities, which they can then flow through to the prospecting and business development.
0:17:37.3 So, what it looks like, in terms of hiring, I tend to try to have a pipeline of prospective recruitment in place. Just like listings.
If I can keep talking to the best people in the industry in my market, build relationships with them, when the time is right for them, they’ll come to me.
0:17:55.8 And that’s exactly what happened with that recent role I just mentioned.
Jordan: 0:17:59.5 So this may be somebody that you know for 12 months or 24 months before they actually come to work for the company.
Hannah: 0:18:05.7 Absolutely. And I’m – and Canberra’s a really small place in terms of the industry.
And I’m certainly not interested in trying to poach or screw over another business, as an example.
0:18:15.4 But, certainly, if people can see why we’re an attraction business and an attraction brand, I don’t believe there’s any harm if they seek me out for the opportunity.
Jordan: 0:18:24.4 What does that mean to you, attraction business, attraction brand?
Hannah: 0:18:29.6 Well look, to me, one of the most important things in my business is our team culture.
I’ve really put a lot of energy into trying to build a culture that is engaging and empowering for our people.
0:18:41.2 Really understanding what makes them tick and celebrating their successes. Really publicly. 0:18:45.1 And that might be personal successes, or that might be business successes.
0:18:48.9 If I can have a team of people that just absolutely love what they do, I believe the client experience will come naturally.
Jordan: 0:18:58.6 Couldn’t agree more. Yeah. That’s a – there’s always a big gap between the aspiration of culture and the actual implementation.
What are you – is there anything you would describe as some of the sacrifices that you guys are willing to make internally in order to actually facilitate culture?
Because who wouldn’t want great culture. But what’s the bright line in your mind between that being a truism versus something that’s actually being really manifested?
Hannah: 0:19:20.9 Absolutely. I mean, it’s interesting – we probably pay on the lower end of the scale in our marketplace – we pay our staff on the lower end of the scale. That’s not necessarily right or wrong, I’m not sure. That’s always sort of been the way.
0:19:37.5 But what’s interesting is people will still come to us because they believe in what we do and they love the feel and the atmosphere of the place. And they’ll leave long-term relationships from other businesses because they know that that’s available to them, even though they might be taking a pay cut.
0:19:53.8 And I think that’s a real reflection of getting the culture right. Because, you know, money obviously does talk.
Jordan: 0:20:00.6 Yeah, the prestige factor.
Hannah: 0:20:03.2 Yeah, yep.
Jordan: 0:20:05.6 Love it. So, going back to what I was asking you about previously, in terms of the recruiting, you’re saying that the track that you’ve described is moving from property management – property manager to leasing to business development.
0:20:19.0 And so, as you describe that, I would be interested to hear your take on temperament. Do you feel that the temperament is flexible enough in those roles?
0:20:27.9 Because traditionally, certainly on the sales versus the property management side, it’s a very different temperament that people are being recruited for.
0:20:37.1 How do you view that property management – that property manager mindset and skillset being flexible enough for somebody to move over into the BD role?
Is that because you guys are not as focused on outbound? Walk me through your thoughts there.
Hannah: 0:20:52.0 Yeah, I think two parts to it. Traditionally we’ve had people in PM roles who have the capacity to sell. They’ve been really keen, they’re not afraid to pick up the phone, they’re not afraid to get in front of people, and those – that progression has been natural.
0:21:07.7 Currently, as I just mentioned, I’ve recently gone external. I’ve recruited the Head of Property Management Growth role and also a BD role. Both externally.
0:21:15.3 And the reason I did that, was because I didn’t actually feel at the time that we had people in our team who were able to translate that skill set.
I mean, obviously having the property management knowledge is fantastic, but as you mentioned, the temperament and the capacity to sell, I felt we didn’t have the right fit for the level and the scale of leads that we’re working on at the moment. So I went external this time.
Jordan: 0:21:38.5 Now how will you plan on keeping that BD accountable? What is the management and oversight look like?
I assume that the culture – part of the way the culture manifests itself is in not micro-managing people, but at the same time, accountability is key. How do you balance that? 0:21:52.0
Hannah: 0:21:53.5 Yeah, absolutely. I mean, I feel quite fortunate at the moment. Having a new BD team come together, obviously with two new people, the atmosphere and the drive is just, you know, tangible.
0:22:04.5 You walk into the office and just – there’s just a buzz around and they’re really pumped. They’re pumped to get their goals as a team, not just as individuals, which I absolutely love.
0:22:14.4 In terms of ongoing accountability, obviously that honeymoon period always does sort of faze off at some stage.
0:22:22.2 In terms of accountability, it’s a matter of weekly reporting, weekly training, reviewing why we’ve lost leads, and reviewing why we’ve won leads.
My guys are all very target driven, so it’s quite easy to say, “Hey guys, this month I need you to list 30 properties”, and they will go to the end of the earth to get 30 properties. Which is – makes my job very easy.
Jordan: 0:22:45.7 So what are your thoughts on the type of compensation structure that actually gets you the results that you want?
Because obviously with compensation and with incentives, it’s a really powerful thing. It can either incentivize things in the right way, or the wrong way.
Have you guys iterated through various compensation and incentive models in that BD role? And what’s your advice there?
Hannah: 0:23:11.0 Yeah, my advice is just to keep it as simple as possible. I would agree with you there’s a right way and a wrong way to engage and motivate.
Certainly I think in our market it’s important to keep the base salary relatively low. 0:23:25.3 Comparatively. 0:23:26.7 And then really build the commission quite high.
So, our incentive structure with property listing ranges between 100 to 400 for a listing, depending on what rate they sign at.
0:23:37.8 So, while it’s all well and good to get 30 listings in a month, if they’re signing them below our average management fee, that adds no value to our asset, really, in the long term.
0:23:47.6 So, if they can achieve full fees, they’re going to get a higher rate. And they get, as I said, get paid per property.
So they’re incentivized to keep pushing to create that income that they’d like for themselves.
Jordan: 0:23:58.9 And how much leeway do you give them in negotiation?
Hannah: 0:24:02.7 We’ve got about a 2% variance in our management fee that we’re able to look at. So – we start at 8.8% and in our market, that’s pretty on par with our competitors. For multiple properties, obviously there is room to move.
0:24:18.4 They all understand the value of the management fee and the importance of upholding the value of the asset. So, room to move is more around our additional fees, such as an inventory fee, or a letting fee, rather than actually touching that management fee.
Jordan: 0:24:31.0 Got it. So, am I hearing that you essentially do not allow them to negotiate on the letting fee?
Hannah: 0:24:37.6 Look, we need to understand that we’re running a business, and we need to know what our bottom lines are.
They do have room to move, as I said, by about a percent or two, depending on the amount of properties. 0:24:49.0 There’s no value in losing a property worth $5000 dollars to the asset for half a percent.
Jordan: 0:24:52.9 Sure.
Hannah: 0:24:52.9 So they use their common sense there, but it’s certainly not the go to fee that we reduce.
Jordan: 0:25:00.2 Got it. Now what about connecting their performance to the long-term performance of the property?
For example, that’s a – if the property churns out quickly, or if it’s just a low-end property. Not in terms of the management fee, but in terms of the overall rent, the area, etc.
0:25:16.2 Do they have any connection to the quality of the property that they’re pushing into the portfolio?
Hannah: 0:25:23.3 No. But that’s a really interesting point. I guess in Canberra we don’t really have any really bad areas, as such. Like there’s not an area we don’t service in our market. So, I guess we’re fortunate in that respect.
0:25:36.1 They do use their common sense around the fact that if they believe that the property is going to cause a lot of grief for the property manager or around maintenance or a state of disrepair, then they’re not going to pass that on to a team member, because that’s just not what we do culturally.
0:25:49.5 Equally, if the owner’s really unpleasant or unreasonable, not all business is good business. They’re happy to walk away from someone who’s only going to make life difficult for people in the long run.
Jordan: 0:26:00.5 Hannah, how do you think about growth of the business overall? When you think about adding doors, does – are you more focused on the priority of how the business as an asset will cash flow?
Is there conversation about the value of the overall asset, the overall business in terms of the underlying asset in the event that there was an acquisition?
0:26:24.5 I know we’ve gone from like, super low-level to super high-level, but how do you think about growth and making that investment in acquiring new doors relative to the cost and the long-term ROI?
Hannah: 0:26:39.4 Yeah, absolutely. I think, I think if anything, it’s really important that the team understand both components of that. Not just the new business team, but also the property management team.
0:26:50.3 If we lose a property, for example, due to a client being unhappy, the PMs are actually aware of what that costs.
0:26:55.9 Not only annually, on management fee income, but also the cost that’s made, or the discount that’s taken from the actual value of the asset.
Hannah: 0:27:05.1 So having those conversations and making that really aware for our people, I think actually adds depth to their service because they actually realize, “Hey, losing this property isn’t just my incentives for my month, it’s actually costing my business, you know, x amount of dollars.” 0:27:19.3 And that creates a real awareness among the team.
Jordan: 0:27:22.0 I’m so super curious. You’ve totally got me hooked here. What’s the basic math that you walk them through to illustrate what a property is worth to the business? Gained or lost.
Hannah: 0:27:33.0 Yeah, well we get them to do the sums. So, off the top of my head, it would be weekly rent times occupancy.
So, in our market, that’s 52 weeks times the management fee. So, let’s say 8.8%. That would be the income. So, that would be on average we might be looking at $1600 or so income per property in a year.
0:27:56.2 And then we times that sum by $3 dollars is the multiplier for our marketplace. 0:28:00.0 So again, on average we’re looking at about $5000 dollars per property in our market for a rent roll.
Jordan: 0:28:06.7 But is that per year or are you talking about over the lifetime of the…
Hannah: 0:28:13.4 That would be if it sold.
Jordan: 0:28:13.4 Got it. Ok. Yeah. Wow. That is so awesome that you’re connecting the dots with them.
Hannah: 0:28:22.1 Yeah. I think they don’t understand the importance of it otherwise. They know that it might affect their monthly incentives, but they actually need to understand the impact that can have on the business.
0:28:30.8 And the flow and effects of that might affect training budgets, might affect conference opportunities. So it’s really important, I think, that we’re transparent about that.
Jordan: 0:28:38.6 That is a writer-downer for those of you at home. One of the ways to elevate the culture and the thought processes in the overall ownership is just simply exposing your team to the economic realities that they are participating in.
0:28:55.5 All of this underlying math, all of this reality is happening – the question is, do they feel connected to it? And the connection first starts with awareness. 0:29:03.7 So, I love that you’re doing that, it makes a ton of sense for me.
0:29:08.0 Taking the metaphor a little bit further, when you talk about the overall – within the management team, when you talked about the overall growth of the company, what is the trajectory of the organization? Where are you guys headed over the next five to ten years?
Hannah: 0:29:25.6 Our goal at the moment is to be signing 100 properties a month.
Hannah: 0:29:30.7 So to break it back down, that’s our team’s goal. That’s obviously gross.
I mean, when we look at net, that equates to around a growth of 50 to 60 properties depending on cancelations with sales and owners moving back in.
0:29:44.8 So we’re really trying to grow quite aggressively. We’d love to see, sort of 10% growth year on year, with business as usual.
0:29:52.2 But that’s really before we get into the really exciting stuff around automation and technology and artificial intelligence, where I believe we can take our business, sort of, to double in the next couple of years if we get that piece of the puzzle right.
Jordan: 0:30:04.7 Ok. Well, so you’ve got to tell me more. When I hear those words, it oftentimes kind of strikes me as a little bit of a buzzword. Right?
We’ve all heard about AI, automation, etc. Where does the rubber meet the road, and near-term, where do you have the most optimism of how that can actually impact your business?
Hannah: 0:30:22.6 Well, I mean if we look at a property management role as an example, so much of what they do is – one: it’s admin based, and two: it’s repetitive.
0:30:30.8 And so anything that is either admin based or repetitive, there’s capacity there to simplify, or to streamline, to outsource, or even to automate.
0:30:39.0 So, for example, we’re just testing software that we’ve been developing around when a new tenant is approved, the signup is booked.
0:30:48.5 And from the point of the signup they booked, emails automatically go to the tenant, to the owner, to the property manager. The lease is automatically created based on the application information that’s been provided.
0:31:00.8 The signup’s done electronically and as soon as it’s signed, the signed copies then are distributed to all parties.
0:31:07.1 So, using that as one very small part of a lifecycle, that’s going to save – and we’re testing at the moment – but that’s going to save each team member close to half and hour work for every signup. 0:31:19.0 And on average, we’re doing about 120 new signups a month. So, it adds up pretty quickly.
Jordan: 0:31:23.2 Wow. So you guys are really in that position to where you have enough scale to actually experiment with these sorts of things.
0:31:30.2 For a smaller company managing, let’s say, 500 units, what you just described would be completely untenable.
Because you – did I hear you correctly? This is actually a software you guys are developing in-house?
Hannah: 0:31:42.3 Not in-house, partnership. So, yeah, it’s really exciting to see it come together. And obviously, the success of that part of the process will inform which parts we tackle next.
And we’re overlaying that with a bit of a time analysis of where our team is spending most of their time and trying to really understand those pain points from a time perspective so we can decide what to tackle next.
Jordan: 0:32:03.4 How do you do that? What does time tracking look like currently? What would you like it to look like?
Hannah: 0:32:07.7 So we’re about to start that up actually next week. For the first time, and that’s going to be – for a full week, each team member in every job role will track every time they spend across a day.
0:32:20.1 What they’re doing in that time based on the core tasks that we think they’re doing. 0:32:26.3 So that will show quite quickly if they’re spending, sort of, six hours a month doing rent reviews or CMAs, how can we streamline that process. How can we free them up to get in front of clients rather than be stuck behind a computer doing admin.
Jordan: 0:32:40.5 So is this a long-term initiative or is this something that, even though it’s painful, you’re willing to accept that because you really just wanted to do it – like how do you plan on doing this for?
Hannah: 0:32:48.9 In terms of tracking the time? It’ll be a week on a week off, and then a week on. And from there we’ll analyze the data.
The reason we think we only need to do the two week chunks is because we’ve got so many of the repeat roles. 18 PMs and six leasing consultants.
We’ll be able to crossover that data across different staff members to get a pretty good feel for where the time’s being spent.
Jordan: 0:33:10.6 Wow, this is incredibly exciting to me. I am so glad we’re talking about this. A lot of light bulbs are going off.
0:33:17.3 So here’s where I am connecting the dots. I’m connecting the dots to two moments in my past.
One was a book that I read called, The Effective Executive by a guy named Peter Drucker. Which is a management theorist and guru, really smart guy.
He writes in that book about an experience that he had doing high-level consulting for a CEO of a multi-national company.
And when he got into this consulting engagement, the first thing that he did, getting paid a princely sum, was simply to follow this guy and to track how he spent all of his time.
And he actually went back to that individual, that CEO, and showed him the reports, the CEO was incredulous.
0:33:58.8 Because he was spending the vast majority of his time on tasks that he, admittedly of his own words, did not assign a lot of value to. 0:34:10.2 Acting in a very reactive fashion. That’s one data point.
0:34:14.0 The other data point I’m thinking of, is a speaker named Darren Hardy. I heard him speak in the states.
He’s a motivational speaker, consultant, etc., and he talked about the turning point in his real estate career being the week that he wore a stop watch around his neck and he followed – he tracked every task and wrote it down.
0:34:34.0 What he realized was that after doing that for about a week, he was spending about two hours working on actual proactive selling activities. The vast majority of all the other time was reactive sort of stuff.
0:34:46.8 I wish – I kind of wish we had done this interview four weeks from now, because I’m super interested on what the results are going to be.
But what I’m guessing is that you’re anticipating that there are potentially going to be some surprises from where you’re assuming the time gets spent to what it actually looks like. So you’ll have to let us know how the results of that go.
Hannah: 0:35:07.9 I sure will, I sure will. It’s all about finding where the high-value points are and removing the low-value stuff, isn’t it? So I’m pretty excited to see how it pans out as well.
Jordan: 0:35:16.3 Ok. So time tracking, in terms of how you’re going to do that. I’m just curious. Are you going to use software? Spreadsheets? Pen and paper? How are you actually going to facilitate this experiment?
Hannah: 0:35:25.9 We’re running it just because of the – we’ve got 42 team members in the office, so we’re going to run it as a, like a survey monkey. So they’ll just submit at the end of every day. Just to submit a survey on the computer.
0:35:37.8 The idea is that the time tracking shouldn’t take a lot of time. There’s a real, you know, possibility that you get bogged down in trying to track it all, when that’s not the case at all. 0:35:46.4 So they’ll just do it at the end of each day.
And then we’ll analyze that data at the end of the two-week trial.
Jordan: 0:35:53.4 Yeah, totally makes sense to me. Well, if you’re listening at home, I’m inspired. Consider doing this yourself.
It’s a one-week, well I guess two weeks total of time. And the insights that come out of that could be absolutely tremendous.
We all talk about departmental, portfolio, but so many times these conversations are had in a data impoverished environment. 0:36:18.8 Meaning, it’s opinion versus opinion.
So, starting off at least just tracking and seeing what really is, how the time is being spent, that sounds exciting.
0:36:27.1 Here’s another thing I want to ask you about: in terms of analysis, what kind of analysis do you do on the quality of the portfolio?
How often do you take a look at the bottom 10%, bottom 20% of your portfolio and what does that kind of analysis look like?
Basically, properties that are maybe potentially underperforming or dragging the overall business down.
Hannah: 0:36:50.2 Yeah, to be honest we haven’t looked at that – the bottom 10 or top 10%. That will come into play with the program that I mentioned earlier around health checking and identifying where there are opportunities to really maximize, you know, capacity to buy additional property.
0:37:07.5 But equally, that comes back to the conversation of potentially selling property that isn’t performing where it needs to.
0:37:13.2 So that ties into that conversation with conversation with clients. But not just to sell the property.
Obviously that’s good for our sales team, but then to have the client buy another property that can perform better for them.
0:37:23.5 So that’s actually what we’re working on at the moment to roll out this year.
Jordan: 0:37:26.4 So I’m thinking more on the level of clients that where you’re managing the property and it’s just a very high effort client.
Do you guys have a process for firing clients? Does that ever come up? I mean, surely you have difficult owners that at times you just realize it’s just not a good fit.
Hannah: 0:37:44.1 Yeah, yeah, from time to time that does happen. Our new business team are pretty good at making that call…
Jordan: 0:37:49.9 On the front side.
Hannah: 0:37:51.5 However, obviously people’s circumstances change. You know, stresses can come unexpectedly for people and that can really change the relationship.
From time to time we have had to let clients go. 0:38:03.4 It’s not something I obviously like to do. But at the end of the day, if people are causing serious grief for my staff, that’s my number one priority and I’m not going to let them be spoken to in a way that’s unacceptable.
Jordan: 0:38:15.3 Yeah. I mean, obviously that’s a huge moral issue if employees feel like management doesn’t really have their back.
Hannah: 0:38:20.8 Yeah, absolutely agree.
Jordan: 0:38:23.6 So, I want to transition to the rapid-fire section of the interview. I’m going to ask you a series of questions and I’m just looking for guttural answers from you.
I know that you’re not functioning in a BD role, but you have done it in the past and successfully at that.
0:38:38.7 So my question for you is, what is the most frequent objection from prospects that you would hear back in the day, and what was your response?
Hannah: 0:38:45.5 Oh gosh. I really didn’t get too many objections. I mean, I think – and I don’t mean that to be cheeky.
I think it comes back to the conversation before you even have to try to close the client. And so I would spend a lot of time qualifying clients, understanding their needs, understanding their fears and really tapping into that part of it.
0:39:11.2 So, the objection was actually answered, or the concerns were actually answered at the very start of the conversation.
0:39:17.1 So, come to actually a trial close or a close, I would be listing, sort of 98% on the spot. I very rarely came up against objections. But that was because of the groundwork I put in at the start.
Jordan: 0:39:30.2 I love it. So you leaned into the discovery process and you were pitching against what they had already told you as opposed to your own talking points.
Hannah: 0:39:39.8 Yeah, exactly. So the objection could be overcome before there was any talk about our actual services.
It was just tapping into their concern – overcoming that. I guess if I had to pick an objection generally, it’s fees. In our market there are competitors that are much lower than we are.
But again, by building on the value of understanding what the client’s concerns or main focus was, you could overcome the fee conversation before it really became an issue. 0:40:08.3 It was just a question more than anything.
Jordan: 0:40:10.2 Right. Yep, totally agree. 0:40:11.4 Next question, what is the most overused selling point that you hear agencies leading with?
Hannah: 0:40:19.6 “I will look after the property as though it’s my own”.
Jordan: 0:40:26.0 I love it. Awesome.
Hannah: 0:40:28.6 I hear it all the time.
Jordan: 0:40:29.8 Yeah. No doubt, no doubt. Yeah, that probably would be at the top of the heap. 0:40:33.6 Who do you learn from?
Hannah: 0:40:37.0 Look, to be honest, I learn from my team. I find them really inspiring. I find them to be really resilient.
I think seeing them overcome challenges they face, I learn from them everyday. I don’t really have a mentor as such, but I do love reading.
I do love TedTalks. So I’m sort of like a sponge. Anything around me, anything I can learn I’ll take on. 0:41:00.3 But I wouldn’t say it’s one or two individuals.
Jordan: 0:41:02.5 Fair enough. What about books, podcasts? Are there any specific books or podcasts that you’re a big fan of.
Hannah: 0:41:10.7 Yeah, you mentioned Drucker. Like, I really like his work. I really like reading books that are more holistic in their teachings, in their learnings.
So I’m a big believer in mindset and mindfulness and I think that can be useful across real estate in particular because of the nature of the job. 0:41:26.2 So, I read a lot around that space.
I finished just reading a book recently, I think it was called, 41:30 Simplicate which I really loved. And also another book called, Slow 41:32. Both of those I highly recommend.
0:41:42.1 And I do a lot of training courses as well and go to a lot of local conferences. Because I find it really beneficial just to meet other people and hear their stories.
Jordan: 0:41:50.0 Love it. So it sounds like you’re a lifelong learner then.
Hannah: 0:41:54.1 I think we have to be don’t we?
Jordan: 0:41:56.2 No doubt about it. Leaders are readers. 0:42:00.0 Hannah, what is the biggest threat to your business?
Hannah: 0:42:03.6 The biggest threat to our business is – let me start that again. 0:42:07.8.
0:42:09.2 If we don’t move quickly and innovate, the biggest threat to our business is ourselves. I know that the buzzword of disruption is thrown around all the time and I believe that there is a time and a place for disruption, but I truly believe if we can be agile in what we do and we can continue to understand and meet and exceed the needs of our clients, disruption becomes less of a conversation.
0:42:32.4 Particularly because we have to remember, in the property management relationship, we’ve got an owner and a tenant. And for disruption to truly work, we need both of those parties to buy in.
0:42:41.3 But if either of those parties just loves us and thinks we’re the bees knees, it’s never actually going to work, regardless of what it looks like.
Jordan: 0:42:48.0 Yeah. Totally agree. And also, you brought it up. I mean, I’ll just ask for a little more detail there.
What are the flavors of disruption that you hear people talking about most frequently?
Hannah: 0:42:58.8 Yeah, I think comparisons of business such as Uber and Air BnB are the no-brainers. They always get brought up. Particularly at real estate conferences.
I think in both of those instances we’re looking at businesses and markets that didn’t meet the need of the consumer.
0:43:17.4 I think in real estate there’s many opportunities for that. I think we certainly don’t always get it right, and I know that property managers, unfortunately, don’t have a great reputation despite the great work that so many of them do.
0:43:30.0 So I think a lot of people with a lot of money see that as an easy target. But I think the difference is, until you’re actually in that industry and you understand the complexity of it, it’s actually really hard to tackle.
Jordan: 0:43:42.9 Yeah. I mean, it’s a people problem. There’s a lot of – I think there’s a lot of good reasons that – with fragmentation and just the nature of the overall work being done that there’s a lot of good reasons that disruption will have a hard time.
0:44:00.0 And there’s a lot of good reasons that property managers can disrupt themselves rather than have it being done for them.
Hannah: 0:44:08.0 Absolutely. And that’s sort of our mindset. How can we disrupt ourselves and make ourselves better before something else comes along and does it for us.
Jordan: 0:44:15.6 Final question of the day. Hannah, if you could do it all over again, what advice would you have given to yourself at the beginning of your career in property management?
Hannah: 0:44:26.4 That’s a good question. I think at the beginning I was pretty naive. As I said, I jumped into it without really understanding, I guess the value of the role as a property manager.
For the first, sort of six months, at the very least, I very much viewed myself as a task based person who had to tick a box, who had to send an email, just so it was done.
0:44:47.3 And it took me awhile for me to learn the real opportunity to actually change people’s worlds by making their life easy.
0:44:53.8 And we can do that as property managers. We get to be really close to people. It’s their homes, it’s their money, it’s their biggest investment.
0:45:01.9 And so, I wish I had known earlier and I wish I understood earlier just how valuable that relationship is if we get it right.
Jordan: 0:45:07.7 Love it. Really inspiring. Hannah, I appreciate you taking the time to come on the show. If folks want to learn a little bit more about you and the company that you work for, what’s the best place for them to go?
Hannah: 0:45:21.0 Well we’re undertaking a complete overhaul of our website and our social at the moment. So I’d suggest if people are keen to learn a bit more, they’re welcome to contact me directly on email or by phone. And I can give you those details if you like.
Jordan: 0:45:32.8 Sure. Feel free.
Hannah: 0:45:36.1 Yeah. So email is HGI@Independent.com.au and the best number to catch me on is 02 6209 1409. And I’d love to chat with you.
Jordan: 0:45:49.0 Wow. I love it guys. So you’ve got an open door to chat with Hannah. She’s been in the trenches in the BD function and has worked her way up and has an exciting vision for where her company is headed.
0:46:00.7 I just want to remind all of my listeners, I do not have a fetish with Australia. I genuinely think that these folks are doing some really interesting work and I think that the parallels are strong. It’s a big turnoff to me when folks say, “Well, what can property managers learn from insurance or mortgage?”
But it’s even more of a turnoff when folks say, “Well what can we learn from somebody else in another country?”
0:46:22.3 It’s not that different. It’s a human to human business, it’s the same good and service. So let’s harvest and mine more ideas. I found everything you just talked about to be imminently relevant and practical for our stateside audience here. Thanks again for coming on the show. Let’s stay in touch.
Hannah: Thanks for having me, I really appreciate it.