By Tim Cafferty GRI, ARM
Recently I was requested to reprise a seminar I first conducted in 2006 on behalf of VRMA. “An Introduction to Homeowner Relations” was the original title of the 3 hour course that I taught in San Diego at the annual conference there. The challenge to make this course a webinar for a 2015 audience was to convert the material from paper handouts to colorful power point slides and to trim the time to 50 minutes. Now, for the purposes VRM Intel Magazine I’ve got just 1800 words that you can peruse in less than 10 minutes! With this in mind here are some key points to consider on this vital aspect of vacation rental management.
We are The Middle Man
One of the very basic points of vacation rental management is to understand that we are paid to be the middle person in the relationship between guests that wish to experience a vacation rental property and the property owner that has the desire to profit from their investment. The key to success is remembering the property owner provides us the platform for our business, but ensuring you communicate expectations to what in effect is your business partner (the property owner).
Just as in life, successful partnerships require clear communications, and a common bond of a positive outcome in the relationship. Failure to set expectations from the start is often the key element in a relationship going bad.
What is Your Why?
Certainly before any partnership with a property owner can take place comes the courtship phase. Much like a life-partner relationship, you need to differentiate yourself from all other prospective suitors. I call it the “why.” Why you? Why should I place my future in your hands? Why are you going to be a better choice for me than the company down the street (or than I can do for myself)? Is it your delivery of service, superior housekeeping, above market income generation, technology, or your outstanding staff? What exactly is your “why?”
Remember when you got your first contract from a property owner that chose your vacation rental firm? That was a wonderful time! You provided information to the owner, you probably met with them (several times) and your charm and business acumen won them over. It was a time when you felt vindicated, and energized about your work. It was also a time when you focused on the “why.”
As time goes on many of us forget that wonderment, and it may behoove some to step back and answer the tough questions just as we did in those golden days. What was it that set you apart? And is that same “why” valid today as prospective new business partners put you and your company to the test?
I submit that it is more competitive today in the vacation rental business than ever before. Not only do you have the threat of business loss to the company down the street who promises half price commissions, rebates, or other creative inducement, but the shared economy has property owners believing that the value of a professionally managed property may be overblown. Never before has there been such a forum for do it yourself vacation rental owners as there is today, and if you are finding, as I have over the last few years that many new vacation rental owners are new to the experience you indeed have to have a steely focus on your “why.”
Delivering on Your Promise
Once you resolve the meaty issue of your “why” comes the phase of the relationship I will call the operations phase. Things are going along as expected. You are delivering your promise of performance. Bookings are good, housekeeping is performing perfectly, guests are doing their part, and in short the operations of the vacation rental are percolating like a fine tuned Proctor Silex (that is an old school coffee maker for you younger vacation rental managers out there). But then something happens.
Just as with a life-relationship that hits the rocks a business partner relationship too can have issues that can be drilled down to poor communications. The owner starts to feel differences in how they are valued by your firm. Maybe a work order or four are charged incorrectly. A blip in their housekeeping happens, or heaven forbid a guest review makes them question what “you people” are doing. “I don’t know you anymore.” “You don’t care like you used to.” “You’ve gotten too big.” These are all comments that may be stated by a property owner that starts to experience doubt.
I firmly believe many issues that surface can be traced directly to poor communications. The truth is that you HAVE lost focus on communicating that value proposition (the “why”) back to your property owner on a daily basis. Or maybe you didn’t have “the talk” with them about what expectations they should have, and you unfairly were expected to perform to a standard that you never realized was in place in the mind of the property owner.
That’s when you need to hold the proverbial mirror up in front of you and determine how you can not only recover the once trusted relationship with that owner that believed in you, but also deliver the value proposition each day to all of your property owners.
That mirror often does not provide a flattering image. Consider the five W’s of news reporting. Who? What? When” Where? And Why? How do you communicate with your owners? Is there another way? What are you communicating to your owners? Should you be communicating more and in different ways? When are you communicating? In a timely and appropriate forum? And probably the most important one (again) why are you communicating? What is the purpose of your contact?
If you don’t tell them who will?
I submit that if you do not advise your owners of what you are doing for them then no one else will volunteer for the job. Isn’t that a self-serving philosophy? You bet, but again your job is to ensure that your business partner feels good about your relationship whenever they think of you.
Communication is so vast and varied these days that you should explore this with your team. From owner’s statements to social media we have so many channels of communications with our property owners that we should be clear on which the best are and how they will be used. I never thought for instance that I would be text messaging a homeowner when I first wrote this course 10 years ago, but I do it every day now.
One time consuming, but potentially valuable tool you may consider implementing is an Owner’s Manual that you would present to your business partner at an appropriate time in your relationship. This booklet might be 10 pages, or it may be 100 pages, and it would outline how you do business. This is what we do, and this is something we do not do. This is who you call to get this done, and please don’t call us to do this for you because we don’t do that. Something to consider no matter if your company is just getting started or has been around for decades.
One of our last points to consider in the discussion of property owner relations is the idea of building loyalty. Obviously delivering on your mission is a key in how you are perceived by your owners. If you consistently deliver on your promise of performance certainly you will build loyalty, but over time there are numerous opportunities you have to point out to your owners just how lucky they are to have you as their VRM. From annual homeowners gatherings at your office complete with a band and booze, to discounted services from local vendors, to gifts, to no charge work orders, to something as simple as a handwritten anniversary card marking when they joined your program there are countless ways you can think of to outwardly show appreciation for your business partner.
Making your owners feel appreciated is a great way to build good word of mouth, and what better referral can you hope for than one from a happy and satisfied business partner?
Analyzing the Relationship
Finally when speaking of property owner relations there comes the point of analyzing the relationship. First you should analyze your business plan. Amy Hinote delivers thought provoking articles on her website (www.vrmintel.com), and recently she had a great discussion about whether VRMs should look at quantity versus quality when it comes to building their footprint. There was significant data in the article I reference to make one realize that growing your firm solely by adding properties to your inventory may not be the most profitable or appropriate philosophy. Bigger is not always better, especially when you consider the wear and tear on your staff with some owners.
Whether you analyze relationships automatically each year or not there should be a point in time when you take a hard look at not only your delivery on the promise of performance, but also analyze what your business partner has brought to the relationship. In short, are they doing their part in the relationship? If the answer is not a resounding yes, you should go back to the communications portion of this article and read that carefully to ensure you are not to blame, but short of that you need to make a hard decision regarding the future of your relationship.
As alluded to above have you considered not only how you are treating your property owner, but also how they are treating you and your staff? If you conducted a poll of your staff of the top protagonists and disruptions to their work would certain owners be at the top of everyone’s list? If so, you may need to consider the reality that your staff, and your firm may be better served without this particular business partner. The proverbial scales of justice may come into play in terms of the amount of money you make from a property versus the angst your team has to deal with, but I can tell you from experience that the loss of one property owner may open the floodgates of productivity for your team.
And In Summary
So as you consider the myriad of property owner relations (note I never used the term “home owner” in this article….these are not their homes, and that is another article altogether) the key points to remember are knowing your “why,” communications, and constant evaluation (of your company and your business partners). If you build off of that base you can’t go wrong!