Published 6th December 2021
Trying to grow a lettings business is like riding a seesaw. For every new instruction you win, there’s one you lose and revenue continues to fluctuate without ever taking off. The same agents compete for the same pool of customers each year and whilst they might win or lose a few each year, few are able to dominate the high street. This is even harder when operating a small agency with limited resources, as it can be difficult to channel those resources into growth, or know what to prioritise. Channelling your efforts into winning new landlords, via marketing and hiring of new employees, may take away focus from account management and leave you susceptible to losing clients.
For every traditional way to grow a lettings business, there is also a challenge to be confronted. With the same group of agencies attempting the same approaches to impress the same pool of customers, the seesaw effect is almost inevitable. Step growth, not incremental improvements, are needed to drive effective growth. As the name suggests, step growth delivers a major improvement in revenue, and does so without this then falling back to previous levels, a week or month later. By pitching for large portfolio tenders, rather than one off properties, specialist agents across the country are delivering major improvements in growth rates, deploying accurate, up to date property data and technology to support this.
So why is step growth the way forward, and why are traditional growth methods no longer enough? Traditionally, growth is achieved by adding new locations, investing in customer acquisitions, increasing marketing budgets or through hiring of new employees to support business expansion. In a market as competitive as lettings, however, there are real reasons why agents struggle to grow using these approaches.
For a letting agency, one of the most common growth strategies is geographical expansion, allowing a letting agent to target a whole new area of new prospective customers. Yet expansion brings with it additional costs and risks. The main risk with expanding into new areas is a lack of market knowledge and expertise, which will put you at a disadvantage behind your competitors.
A lack of existing relationships with local landlords, for example, can hinder your new branch from being considered. Worse, a lack of understanding of local housing regulations and requirements puts you and your new landlords at serious risk. Growing legislative complexity provides an opportunity to support and impress landlords, which is vital to gaining trust in a new area. In this circumstance, deploying technology that automatically scans and maps legislation and compliance can do the hard work for you, building trust, supporting expansion and helping agents to stand out in new areas.
Spending money on marketing is one way to increase customer awareness and move customers down the funnel closer to a sale. Yet marketing needs to be distinctive and memorable. To work, it needs to stand out, and this is made harder when competing with other agencies with bigger budgets and similar messages. Kamma has spoken to agents that have quadrupled their marketing spend in a year and still seen little growth, precisely because of the competition for attention that all agents face.
One way to stand out is through new services that increase the customer offer and drive new revenue. A licence application service, for example, provides a new way agents can support their landlords, adding value whilst creating new streams of revenue. The Kamma application services takes the hard work from agents whilst offering £300-600 in revenue for every new application.
Finding and hiring the right team is crucial to the growth of any business, yet this also comes with additional HR and management costs. If more time needs to be spent on management or operations, it can distract from commercial activities. Hence, trying to scale a team without an efficient operating model can result in agency directors losing substantial amounts of time – and potential deals!
Dealing with complex challenges, such as legislative compliance, through a tech solution is a big step forward. Not only does this improve levels of compliance, it does so at minimum operational cost to the business. This keeps the team off the phone with local authorities and out in the market with customers instead. It’s a win for the business and new team members.
Kamma works with some of the leading agents in the industry, from corporate to SME agents, to help them with their business development efforts. By introducing licensing compliance and application services, agents can focus their time on winning new deals and achieve step growth.
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