Attract clients to boost your strata management business. These insights from industry leaders might help.
Apartment approvals may be softening but Australia's construction pipeline still has more than $6.3 billion new apartments and units in it . If you are an owners' corporation (OC) administrator, this translates to a raft of potential new business - if you are willing to go above and beyond to differentiate yourself in an increasingly competitive market.
Competition has grown in recent years due to a flood of new entrants, ranging from small boutique operations to mid-sized franchises and massive, multidisciplinary corporations. This means property owners have more options than ever before if their existing provider isn't meeting expectations - and that you must work carefully to determine and accentuate your biggest value.
If you think that value is the price you offer, you're not thinking hard enough. There's much more to being a good OC administrator than looking cheaper on paper.
"In a growing marketplace where there is a low barrier to entry, churn occurs relatively commonly and you do see people making decisions based on cost," says Chris Duggan, President of Strata Community Australia (SCA) NSW, whose more than 3,000 members manage 75 percent of the state's strata properties .
"Pinching pennies over management costs is a very short-sighted view of the world," Duggan warns. "Particularly when legal situations arise, an inexperienced manager will tend to take a lot more money to get the same answer and outcome for the owners. Someone who is experienced will save a lot of time and money."
If you're trying to convince property owners to give you a try, here are five things you need to do for them:
Return their calls
Customer service lies at the core of the strata-management proposition, and every property owner has different expectations. That makes OC administration a deeply hands-on relationship: effective strata managers stay readily accessible, get onsite quickly to manage situations as they arise, and keep clients regularly updated on the progress of works underway.
Get the right skills
Many strata managers are new to the game and not all of them are accredited. If you haven't already put your team through training like SCA's A100 introductory training or the Certificate IV in Strata Community Management - both of which are attestations to a minimum level of professionalism - you should definitely get started.
Sourcing staff with other, related skills is also a good competitive differentiator since it can help you offer a broader range of expertise to new and potential clients.
Skills development "is very important given the complexity of the buildings we're seeing today," says Stephen Raff, CEO of Ace Body Corporate Management Australia, whose network of franchisees manages over 60,000 strata lots nationwide. "Our people have to be part lawyer, part accountant, part engineer, part facilities manager, and part psychologist."
Think nationally, act locally
Growing housing densities and ever more-demanding clients mean you need to be readily accessible to the properties you manage - and that means being able to have feet on the ground within minutes. Local relationships also help you build relationships with local tradies and other support staff. They can also help you lock in new business through working side-by-side with developers to build OC processes into new properties as they're built. Establish yourself as a valuable partner capable of helping developers navigate strata-management legislation, and you will generate the kind of word-of-mouth publicity that money just can't buy.
Particularly as apartment construction slows down and competition heats up, providers are getting on the front foot with cost-saving deals designed to get customers to switch, then hitting them with bigger costs for administration or other trailers. Cost-based marketing can certainly work in the short term - "the expectation of clients is a very high level of service and what they're prepared to pay is right down underneath the ground," Raff says - but it's bound to disappoint clients in the long term when you realise you can't meet their expectations based on cut-to-the-bone pricing.
To avoid disappointment on all sides, make sure you are upfront about your fees and don't fall into the trap of underselling your services. And if your business is diversified and horizontally integrated, be wary of the costs you charge. Customers expect a lot - but they will soon learn that it's better to have a responsive and effective OC manager than just a cheap one.
Invest in technology to help your clients
New management, reporting and communications technologies facilitate better connectivity and more flexibility. If you're not offering online portals - which give customers access to minutes, financials, issue tracking, and the same asset-management data you are seeing - you're in danger of losing out to competitors that do. Many firms are also introducing related technologies such as electronic voting and the use of online video to run AGMs, video consultations, or meetings. These let you hold meetings during the working day rather than forcing owners to meet onsite in the evening.
Ultimately, each property's requirements reflect its unique mixture of owners, their expectations, and resident amenities. If your current service offering isn't cutting it, they won't have to look far to find a better fit. "We've found that two identical looking properties, side-by-side, have vastly different needs based on the owners' expectations," Duggan says.
"Some are run by very experienced committee members who understand what owners are looking for, and others are managed at arm's length with a governance style similar to a board. If customers set clear expectations about what they're looking for, they will find a company that has experience with similar buildings that makes them able to deliver."
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- Australian Bureau of Statistics 2017, 8731.0 - Building Approvals, Australia, July 2017, http://www.abs.gov.au/ausstats/[email protected]/mf/8731.0, accessed 12 September 2017.
- Cordell Construction Monthly, August 2017.
- Sydney Morning Herald, June 30 2017, CBD Strata Market in Hot Demand, http://www.smh.com.au/business/property/cbd-strata-office-market-in-hot-demand-20170621-gwvrnz.html viewed 13 October 2017.
- NSW Government Fair Trading, Reform of strata laws, http://www.fairtrading.nsw.gov.au/ftw/About_us/Have_your_say/Reform_of_strata_laws.page, accessed 12 September 2017.
- Strata Plus, SCA Accreditation, https://www.strataplus.com.au/sca-accreditation/ accessed 13 October 2017.