Understanding the motivations behind property manager’s decisions is key when trying to win business in the security industry. Unless you want to be competing on cost, which is a recipe for thin margins and high turnover, winning new customers means being able to persuade property managers that your company can deliver a measurable better service than their current security contractor.
Going into a proposal meeting without understanding these triggers puts you at a significant disadvantage. Ultimately, you want to show the decision makers how your service can make their lives easier and their wallets fatter.
Where Their Bonuses Come From
Typically, property managers earn bonuses based on four identifiable criteria:
- Occupancy: A bonus paid out based on the quarterly occupancy rate of the property. The bonus is typically paid out when a manager maintains 95.5% occupancy (industry standard).
- Receivables/Delinquency: This is based on the percentage of the total rent that is overdue or delinquent. The level varies between companies.
- Lease Renewal: This bonus is paid out based on the percentage of the residents renewing their leases on an annual or biannual basis.
- Budget Adherence: This bonus is paid out based on the overall adherence to the property budget on a quarterly, biannual, or annual basis.
Understanding these common factors affecting a property manger’s wallet and then implementing ways to positively impact these areas will help you establish common goals with your prospect.
You’ll notice that your contract price only can impact budget adhering, whereas the quality of the security service can have a big impact on the occupancy & renewal rates. But you can even indirectly help #2, since happy residents tend to be more likely to pay rent on time. If you can show property managers that your service will measurably improve resident satisfaction and renewal, that’s a massive selling point.
Ask yourself which would be a more effective “elevator pitch”:
“I’ve been in business for 10 years with a background in law enforcement. I hand select only the best guards in the industry. We provide great looking uniforms, electronic daily activity reports, and are always accountable.”
“How’d you like to get your occupancy level to 95.5 and stay there? We work with dozens of property managers and utilize software that provides instant transparency and incident reports that will impress your boss and make you look great.”
Touting the experience and accountability of your guards is one thing, but if you can demonstrate an ability to tangibly address more common issues like parking management, noise complaints, and maintenance issues that cause residents to move, you’ll be able to make a much more convincing case.
How To Approach The Pitch
We love to stress this point, and it’s worth repeating: do your research ahead of time!
Look up reviews of the property online to figure out what are the most common issues residents are complaining about and where the manager might be looking to improve.
Beyond that, make an attempt to understand the property manager’s business when meeting with them. Taking the time to ask questions about their security needs rather than just bragging about yourself and your company is a big part of what takes you from a vendor to a partner. Understanding not all properties or management companies are require the same levels of security solutions is extremely important; take the time to do your research about the geographic location, resident demographics (age, gender, income, education level, etc), and create a strategy that will align with your findings.
I also like to get into specific questions about the property manager herself and her experiences with past security guard companies. These include:
- "What has your turnover been with guard companies?"
- "What was wrong with your last guard company?"
- "How many guard companies have you been through in the past year and a half?"
- "How long have you been here?"
- "How long do you plan on staying here?"
Remember, you’re planning to develop a working relationship with this manager, so it’s important to get a sense of how high a priority the property is to them, what kind of manager they are, and which issues give them the most problems.
Don’t Forget The Budget
While all these aspects of differentiation are critical, don’t take this to mean that price isn’t important. Pricing is always going to be key in this industry. Property managers have set budgets to work with, and they generally don’t have much flexibility in this area.
If you’re up front about your capabilities and make an effort to understand their needs, most property managers will be straightforward with you about their budgetary constraints. You don’t have to come in and offer the lowest price, but you do have to fit within their budget.
Selling Peace Of Mind
On top of all the fiscal concerns, property managers will be very interested in your security services if it can make their lives easier. For a property of 500 or less residents, reducing customer complaints will save a huge chunk of time for the property manager.
Timely and quality incident reporting makes property managers lives’ easier by giving them the information they need to quickly address issues and make sure they don’t happen again. Sloppy or incomplete reports, on the other hand, create more work for the property manager, who then has to call to get more information and might get blamed by the resident if they’re working off of inaccurate facts.
With many companies out there still focusing on experience and accountability as their main selling points, you can make a big impact in a sales meeting by showing how you’ll tangibly address their pain points and improve occupancy and lease renewal. For more in-depth resources on this subject, check out our Lunch & Learn Playbook and Vendor To Partner Ebook.