Focused Client Experience | Dean Firth Conference Review
What separates the best from the rest? Why are property management agencies operating on a 40% profit margin while some can only expect a 5-10% profit margin?
According to the people who know the difference is simple.
A laser-like, focused client experience.
This was the message from Dean Firth’s excellent presentation at the STAFFLINK 2022 Conference.
Who is Dean Firth?
Dean is Head of Business Banking at Macquarie Bank, and has over 27 years’ experience in banking and financial services. This is a man who speaks from a place of knowledge and experience. What he doesn’t know about the industry is probably not worth knowing. His leadership of Macquarie has seen it invest heavily in the real estate industry and grow into the undisputed leader of banking and financial services for the industry.
“For those of you who don’t know, Macquarie actually got its banking license back in 1985, our first client was a real estate agent, its second client was commercial real estate agent, its third client was a strata manager, so we have known the real estate industry, and the banking of the real estate industry for a long period of time”
How is the industry performing?
Dean highlighted the massively different levels of performance that exists among property management agencies within the same sector.
“Some are operating on profit margins in the 20’s, some are in the single digits, and some are operating on a profit margin of the mid 40s.”
Dean is quick to point out that this level of profitability bears little relation to the size of the business.
This is important because a question that property management businesses often ask him is ‘What is a rent roll worth?’
His answer? It’s only worth what someone is prepared to pay for it.
Size and geography do come into the equation, but far more important is the profit margin. A business with a smaller, more profitable rent roll is worth more than a far larger business whose inefficiencies are hindering their ability to predictably and consistently post higher profit margins.
“What I’m saying is you’ve got to get more efficient.”
Technology and efficiency
“A logical way to get more efficient is to engage technology.
But another way to get more efficient is to think about your workflows, if you take a crappy process and put it in technology, it’s not necessarily going to improve the economic outcome”
You’ve got to be thinking about the operational flow of the experience that landlords and tenants have with you, and remove the friction.”
This is important to note, Dean isn’t saying that technology is NOT the answer, he is saying the technology is only part of the answer. Any technology that you add into your business must be built on solid ground.
The goal is not to add technology for its own sake. The goal is to improve the client experience, and technology can help you achieve that goal.
The best experience you’ve had anywhere, is the experience you want everywhere
The real estate industry does not exist in a vacuum. Tenants and landlords are not just comparing you to other real estate agencies, but they are comparing you to Uber, Netflix, the online banking apps. These companies have fundamentally transformed people’s expectations of what a good, focused client experience looks like.
Who wants to actually go into a bank when you can do all your banking on your phone, from the comfort of your own home? Who misses waiting 30 minutes for a taxi to show up? Blockbuster and chill anyone?
The most successful businesses of the past two decades have not just transformed their own industries, but they have also lowered the customer’s tolerance for outdated, and antiquated interactions.
This is what Dean Firth sees happening to the real estate industry. In fact, it’s what he sees already happening to the industry.
The businesses that will succeed will be the ones who have the technological capacity, and laser-like focus on providing the best client experience.
“It’s not just about price, it’s not just about brand, it’s not just about the products, it’s not just about the relationships.”
Its about all of those things, but if you get the focused client experience right, our data shows that the returns are off the chart”.