If the value perception of your management services is no different from your competitors, it means you are only competing on price and service, and that can lead to a race to the bottom.
Stop the Race to the Bottom: Change Your Value Perception
How Communities Value Management Companies
Value perception is a big deal for any business. If potential clients do not perceive value in a product or service, or the client’s perceived value does not match a provider’s prices, the market will influence the business to reduce prices or eventually close.
Your management team are professionals, and they should be treated like professionals, just like the board treats its attorney or CPA. But many boards of directors treat their management company more like a janitorial or lawn care service – they assume management services are all the same, and the only differentiators are price and customer service.
But if you look at it from a different point of view, you might understand why community associations would undervalue management services. For many management companies, the sole representative of the brand on the sidewalks and hallways of the community is the manager. It’s efficient from the management company’s point of view because it gives the community a single point of contact. But look at it from the community’s perspective: the manager is out there issuing citations for leaving the garbage cans out 2 days or parking in the wrong areas. In spite of the fact that you have a bevy of other employees managing the accounting, tracking emergency calls, creating resale packages, coordinating vendors, and all the other hard things you do, this image of the ‘rules enforcer’ is what is seen. So the perception is, anyone could do this job. “We should be paying a meter maid value, not a professional services value!”
What Sets You Apart from the Competition?
There are many differentiators between management companies that can have a significant impact on a community’s success. The hard part is getting boards to recognize these differentiators – and be willing to pay what they are worth. To do that, you need to change your value perception.
I have seen many management companies try to compete on cost, which inevitably leads to a race to the bottom. This model isn’t sustainable and has led to the demise of many management companies.
The real opportunity for management companies to differentiate themselves is in the value they create for their clients. After all, if you’re not providing additional value through your services over what your competitor could, then why should they pay you more? In other words, if the only tangible benefit communities receive from their management company at the end of the month is a report package, it is easy to understand why they think all management companies are the same.
However, if you can increase your perceived value to your clients by providing them with valued insights that help the board make foolproof, data-backed decisions; if those decisions can reduce potential liability AND increase property values in the community; if that data can also be leveraged to increase revenue for your management company, you have a winning strategy.
SmartProperty Can Help
When your management company becomes a SmartProperty partner, you gain the tools you need to increase your management company’s value to your clients. You gain the insight and data analysis to help your boards make smarter decisions, and you gain a toolset that helps you leverage your portfolio data on your client’s behalf.
Whether it is increasing the remaining useful life of components, helping your clients fund projects, leveraging data for bulk bidding on contracts, or helping track capital improvements, your management company will be seen as a valued partner that provides services above and beyond your competitor.
With SmartProperty as your partner, you can turn your race to the bottom into a race to the top. Schedule a meeting today to learn how SmartProperty can help you unlock value in your management company.
The Living Reserve Study™ is more than an electronic version of your reserve study. It’s a suite of tools that let you control every aspect of your asset management process, from tracking reserve component inventory to funding scenarios to tracking maintenance to managing capital improvement projects.