A few months ago, I was lamenting the loss of a few substantial accounts. Lured away by an attractive headline price for tenant referencing, the clients took their business to our competitors.
In theory, it would have been possible to keep the business – if we’d been prepared to reduce quality and restrict the service we offered, but nobody at LegalforLandlords would have been happy with that approach. We’re proud of doing a great job, so we carried on doing things our way.
Well, it turns out that the old saying right. The grass isn’t greener on the other side of the fence, after all. This month, we’ve seen 3 of those accounts return. Their reason: their experience with the new supplier didn’t match the promises made. In short, they’d been told they’d be getting more for less and they weren’t. People can talk about smart systems and efficiency all they like, but there’s a limit to how far that can take you. The truth is that it costs more to deliver more.
The problem with decisions based purely on price
The property rental industry has been bashed and battered recently, and it’s now in transition. We’re becoming a highly regulated sector, with more responsibilities, increasing professionalism and slimmer margins. It’s no longer a piece of cake to make money. And because it’s getting harder to get the returns, there is a temptation to focus on cost-cutting. The problem with this tactic is that it ignores the necessity of looking after your clients’ best interests.
Letting agents who attract landlords with a seemingly unbeatable offer are treading a very dangerous path. If their business model is based on low cost, when things go wrong – which is very common in property – there’s no easy way to rectify the situation. For example, a relationship with a landlord could be destroyed by a tenant reference that missed key information. Poor service from the letting agents’ suppliers always filters through to the consumer – the landlord or tenant – and that’s where the damage hits home. I always say that lettings agents should prioritise looking after their customers and their investment. Offering them a dirt-cheap deal isn’t looking after anyone. It’s neglecting responsibility.
We’re always hearing stories about what our clients have been offered elsewhere. When these proposals are explored further, the prices are good, but there are hidden costs to tenants, monthly subscription fees and transaction fees. Sometimes there are lengthy, restrictive contracts. In some cases, letting agents are pushed in the direction of a particular provider by their software supplier. In these circumstances, letting agents aren’t getting what they want. What they want, surely, is a quality reference, great customer service and value for money.
Using common sense to deliver great value
As well as returning clients, we’ve just taken on two entirely new accounts. These have been secured precisely because we’re not ‘cheap and cheerful’. The clients understand that a better-quality reference, superior customer service and a common-sense approach are what their business needs to thrive.
We’re not afraid of this competitive marketplace. Yes, it can be challenging, but that’s good for us – it keeps us on our toes and keeps us delivering our best. That, I believe, is what letting agents should focus on – delivering their best in the best interests of their clients to maximise retention and overall returns. In that equation, the price of a reference is only a very small part of the picture.
If you’re an agent who wants to put their best foot forward and truly protect their landlords’ investments, we should talk.