How to maintain your income after the tenant fee ban
The upcoming tenant fee ban is causing a lot of commotion in the world of lettings. While it’s a stretch to say there’s panic in the industry, the uncertainty over when this ban will be exacted and the terms behind it mean it’s best practice for letting agents to prepare ahead for losing a main stream of income.
The truth is that lettings agents don’t need to rely on tenants’ fees in the first place in order to have a profitable business. So, what are the tricks up the sleeves of lettings agents in the face of this ban?
To increase income, there are THREE crucial areas to consider:
- How do you increase the number of new leads that come your way?
- How do you increase conversions of those leads?
- How do you increase the profit you make from these new leads?
When you lose a source of income you normally expect to get, you need to be proactive. Increasing numbers in just one of these three areas will help bring more money in, but by implementing a strategy that increases all three, you have a secure income stream that doesn’t rely on tenant fees.
Here’s how to connect these three areas together to create the strategy you need to beat the ban:
- To increase your leads, you need to increase your reach.This requires making your brand more present and visible than ever before. Alongside your traditional marketing methods, take this as the cue to invest in your online brand – including social media accounts, promoted posts, email marketing and blogging – to increase the number of people hearing about you and talking about you. PWC state that per £1 spent on digital marketing, companies are seeing a £14 return, compared to just £1.20 from traditional advertising. Look at the success of online agents and how they bring in consistent numbers of new clientele. The great advantage of digital marketing is the low costs for inbound leads. You can spend a lot less for clients to search for you, rather than using your staff’s time and energy to search for them.
- To increase your conversions, you need to increase your team’s performance.Bringing in more manpower is the easy route but is counter-intuitive to maintaining profit. However, with a slight restructure and some smart incentives, you can create the dream team you need with your current employees. Sales is a competitive environment, so train, organise and empower your staff to offer more in order to be better at winning business. They need to be focussing on the front end, maintaining consistent contact and supporting all leads throughout their customer journey. While maintaining a structured, up-to-date back-end is important, there are data management systems that simplify and streamline the process. There’s no excuse for your team to spend more time filling out forms than winning clients.
- Finally, to increase profit, you need to increase the value of your service.More specifically, you need to consider whether you are charging enough for what you do. The private rented sector has evolved far beyond how it started. Legislation continues to increase and the numbers of professionals in the investor landlord industry continues to grow. What starts as a side income becomes a livelihood for many, and they need to protect their portfolio at all costs. Take this as a sign that landlords are willing to invest in the best – so there’s no need to devalue your services to get clients. Many agencies will offer tempting one-off fees and neglect to mention the services that are NOT purchased with it. Start by breaking down all the services you offer and value them favourably to your competition, then shine the spotlight on how much you offer rather than how much it costs. You might be surprised at the difference in how much landlords are willing to pay when your services are packaged differently or more transparently.
The value of service always comes first and is key to getting regular custom and maintain profit margins. If you want to know more about the strategies that lettings experts use to maintain their income, click HERE to book on our Intensive workshop, for a one-day masterclass on running a letting agency.