“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett

Lockdown Lessons

Lockdown came with many challenges. It also gave agencies an opportunity to test their agility in responding to the changing needs of their customers. It provided the backdrop to prioritising the customer experience as well as finding new ways to add revenue streams to the business.

Lockdown wasn't the first opportunity the industry has had to evaluate its processes. The Tenant Fee Ban also pushed agencies to look for new ways to overcome a shortfall in revenue. It was not luck for those that succeeded. The agencies that have thrived have been those that have found ways to overcome challenges quickly and efficiently, finding new ways to bring value to Landlords and tenants and to stand out from the crowd.

Beef up your proposition

Increasing your letting agency's revenue doesn't need to be complicated. In fact, it could be as simple as offering your tenants and landlords extra services that are integrated into their experience and proving that you offer added-value.

Management fees are an obvious first port of call. But, if you want to charge top-end management fees (and higher than your competition), you will need to demonstrate the value you’re providing to your landlords. You will need to start thinking more creatively about how you present your proposition to landlords – articulating every service as well as demonstrating your professionalism, levels of protection and why you will find them the best tenants.

How will you add value? Ask your clients what more you can do to help them. Find out what the issues are that they face and try to build your service around solving these issues for them. By creating a more compelling offering and showing landlords why your agency stands out from your competitors, you will justify a higher fee.

Offer your tenants additional, optional services

Whilst Letting Agencies traditionally see Landlords as their customers and main source of income, tenants represent a huge opportunity and untapped resource for letting agents to increase their revenue. In the midst of so much market change, letting agents needs to begin to view their tenant-base through a different lens. Agents need to begin to see renters as customers – in fact, agents will typically have 80% more tenants than landlord customers. In doing so, they will build positive renter engagement with their brand, as well as create an environment that produces happy tenants.

To do this, Agents need to strive to connect and deliver compelling experiences: Happy tenant-customers are far more likely to pay their rent on time, look after the properties they live in, purchase other services, make referrals and stay in the long-term. So much money is being left on the table because agents aren’t really offering additional services at or after the point of move in.

A recent nationwide survey by Vaboo of their customer’s tenants uncovered where agents are missing out on revenue generating opportunities - simply because they don’t know what their tenants want or are willing to pay for. The tenant survey found that around 70% of renters would be happy to pay more rent for particular service add-ons.

This included paying more for access to discounts that would help reduce their overall day-to-day spending, for example on 79% wanting to save money on household bills. The survey found almost a quarter of Londoners would pay extra for access to a communal space (24%) while Yorkshire & the Humber showed the greatest interest in gaining access to a shared workspace (23%).

The survey highlighted a significant number of potential revenue generating areas for landlords – in particular on moving in.

Over 66% of tenants would find the process easier if removal services could be arranged. A further 42% would pay for recommended cleaning services and another 26% would pay for a stocked fridge.

Also making the list of items tenants would be willing to pay more rent for if included were items such as parcel collection, meter readings, key replacement, gym memberships, home insurance, laundry, utilities, broadband and National and local discounts.

Real-time data

Understanding tenant expectations like these will be crucial to ensure you’re providing services your tenants not only want to buy, at the time they want to buy them, but actually improve their moving experience and increase the likelihood of them giving your agency a positive review online. It is crucial to have your hands on real-time data about the wants and needs of current and prospective tenants.

How much agents can also make from other services like insurance or utility and media switching is determined by the take up of tenants, so the key to capitalising on this opportunity is making sure those products and services match up with the expectations of tenants.

It is these ‘insights’ or key information about customers that agents can use to shape their service offer and gain competitive advantage - whatever channels they sell through. The property industry is slowly coming round to this way of thinking, and smart agents are already gathering this data and acting upon it. By becoming experts, and utilising data and insights agents can shift the balance in favour of retention over churn.

Tech that talks their language

Once agencies have a good understanding of the products and services their landlords and tenants want to pay for, they’ll need to identify seamless ways to offer these in order to increase conversion rates.

As well as improving your agency's efficiency and saving money by choosing the right tech for your business, you should also consider how it will improve your customers' experience - the ultimate end-goal being to ensure their loyalty. Technology can make it easier for letting agents to offer products to their landlords and tenants. Agents now need to move forward with technology by choice as well as necessity.

At Vaboo, we understand this importance, and our agent clients are intregrating links to their other services such as property maintenance, mortgages, energy switching or insurance into one easily accessible dashboard. With just a click of a button agents can benefit from an extra revenue streams that wouldn’t otherwise be so accessible.

Increase your conversion rate

To build a robust business, add value and continued growth, the most forward-thinking agents are identifying ways in which they can stand out from their competition and cement positive customer experience into their existing services. If agents want to stay in the game, build trust and loyalty, and win customers, they must incorporate a data-driven culture so they can personalise experiences and capture a larger audience. You will also need to consider proving how you demonstrate this added-value and customer service driven experience.

Net Promoter Score

Customer Experience is hard to prove – unless that is you are using a universal and global way of measuring it! Using a tangible system to gather feedback, Net Promoter Score (NPS) finds out exactly how your customers feel and gives you a comparable way to measure how your customer is stacking up – both internally and with your competitors.

Agencies can use their NPS to address any problems areas, improve the experience of their customers, monitor loyalty trends, and grow revenue through referrals and upsells. The NPS methodology is primarily intended to measure customer loyalty - in other words, how likely they are to buy again, act as a brand ambassador and resist pressure to defect to another agency. This is important because it is cheaper to retain a customer than acquire a new one. Proving that you offer an experience which generates long-term relationships is a sure-fire way to help attract new Landlord customers too.

With scores well above average, and 95% of clients improving those scores in the first 12 months of using Vaboo customer rewards and engagement platform, Vaboo can help you measure your NPS and drill down into exactly what each individual customer thinks about you. With the ability to rectify problems, gather positive responses and develop real relationships, the potential to monetise those opportunities is just one of the positive outcomes.

Optimise your Sales funnel

For those agencies with both Lettings and Sales divisions there is also the opportunity to explore the potential of their existing lettings customers. There has been much speculation over the trajectory of the rental market and how plans to buy have been affected by the pandemic. Vaboo responded to the demand for answers to this question and asked tenants if Covid-19 would mean that people would stay in their current property longer. 43% of respondents answered No and a further 29% hadn’t decided. Over 66% of tenants were worried about the idea of renting for life.

The survey uncovered that 47% per cent of tenants said they were still likely to buy after their current rental with 31% likely to buy in the next 2 years. This is a huge untapped resource for Letting agents to turn great lettings relationships into sales – and an opportunity many are missing.

However - providing fuel to sceptics who accuse some tenants of doing too little to save for a home to buy -26% responded that they were saving to move in the next 3-4 years and a further 20% would be in a position to buy in around 5 years.

Some 23 per cent of tenants surveyed said that they would be renting long term. With positive engagement, great communication and superb customer service, this also gives agents huge potential for long term relationships, regular income and reduction in void periods.

The real-time customer dashboard at Vaboo, now means that agents have the data for their own pool of customers at their fingertips. As well as knowing what they think, they know exactly what their tenants plans to move are at any given time. The potential for agencies to use this data in their marketing has significant financial implications.

Conclusion

If you are not taking care of your customers, your competitors will.

Agencies that learn to embrace the challenges of the fast-paced and evolving lettings industry are the ones that will survive. Learning from the past while looking to the future will help you stay ahead of the game. With most agents having a pool of tenant customers four times larger than their landlord customer base, the opportunities need to be understood as the industry evolves. As soon as they do, the increased revenue streams that result will change how they look at their businesses over the next decade.

Focusing on tenant retention rather than churn will be vital, and building a service that meets customer expectation is the surest way of attracting great tenants that stay for the long term. Ultimately, happy and engaged tenants are more likely to look after the properties they are living in, pay their rent on time - leaving both letting agents and landlords much happier.

With data and insights from over 150,000 tenants, Founder at Vaboo Jonathan Stein commented:

“I think about this all of the time. I think about it in the morning and at night and have done for many years and still I cannot come up with another industry, business, or sector that has as much potential as private rentals. Before the pandemic and beyond - for agents, it’s all there for the taking.”

Visit the Vaboo landing page for more information and to see reviews. Click here