When it comes to business development, one size definitely does NOT fit all. Or more accurately, one personality type does not fit all.
We discussed in another recent article the importance of personality testing for fitting people into the right roles, but in this article I’d like to drill down specifically into your sales roles and how this concept applies, as all too many property managers are trying to force their BDMs (Business Development Managers) to be all things for all lead sources.
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Inbound & Outbound Are Two Entirely Different Species
Sales is not just sales, and one great salesperson is not the same as another. One of the biggest mistakes I see property management companies make when it comes to their sales operation is assuming that someone who is a skilled salesperson can handle all forms of sales equally well. In reality, someone who is fantastic at fielding inbound lead calls is usually going to be someone who struggles at going to sales brokerages and trying to generate referral leads. This isn’t universally true. As with anything, there are always a few unicorns out there who can do it all. But they’re few and far between, and they usually figure out pretty quickly that they’re unicorns and they move on up to an industry that can pay them half a million per year instead of a “measly” $150k. So as SMB owners, we can’t count on finding and holding on to those types of unicorns. Instead, we need to build our sales operations around the idea that a specific BDM is likely to excel in one kind of sales and not others.
Inbound sales is largely an administrative type of role. It’s about overseeing a process more than about being a smooth talking master of persuasion. In one of the greatest scenes ever put to film, Alec Baldwin said in “Glengarry Glen Ross,” “Get out there! You’ve got prospects coming in. You think they came in here to get out of the rain? A guy didn’t walk on the lot lest he wants to buy!” Now, this movie doesn’t exactly present sales in the best of lights (although it’s become a bit beloved among sales professionals for some reason), but this particular line is gospel. People hate car dealerships. They don’t even want to be at a dealership when they actually want to buy a car, so they’re damned sure not going on the lot unless there is a very real chance that they’ll pull the trigger and buy a car. The same is true of anyone who calls in to your office asking about PM services. People don’t like talking to salespeople. If they’re making the call, it’s because they’re ready. More than anything, your BDM taking those inbound calls just needs to be knowledgable and regimented. She needs to be knowledgable so that the caller feels comfortable with your company managing their most expensive asset, and she needs to be regimented because sales rarely close on the first call. It requires follow-up and consistency. Just because someone wants to buy a car doesn’t mean they want to buy THIS car from THIS dealership and from THIS salesperson. You’re half the way there from the start because this is a warm lead that is ready to buy, but you still have to make them feel comfortable that your product is the one they want. It’s not about smooth talking. You don’t need to convince this type of lead that they need property management. They already know. That’s why they called. Instead, it’s about addressing their specific concerns and needs (knowledge) while making sure to follow up so you’re staying front of mind (regimented).
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On the other hand, outbound sales is 90% persuasion and relationship building. You are trying to create demand, not just handle existing demand. The kind of person who is great at handling inbound leads frequently feels like a fish out of water trying to walk into a real estate brokerage and convince them that they need to refer leads to him. If your entire outbound strategy is nothing more than dropping off flyers that tout your referral fee that you pay for leads, then the inbound person can certainly handle that. But if you want someone to go in and shake everyone’s hand, make personal connections, teach a class on property management, etc., you need a different person.
Nurture Rather than Chase
As I frequently do when sitting down to write one of these articles, I dropped some questions into ChatGPT to spur some thoughts. This time it turned out a great comment: “[inbound salespeople] need to nurture rather than chase.” This is a fantastic description. If you come on too strong with an inbound lead, you’re going to give off “used car salesman” vibes. And nobody trusts a used car salesman. Instead, you want to be consultative. You want the lead to feel that you’re trying to help them with their specific problem.
Some key traits of an excellent inbound BDM:
Great listener - the best inbound salespeople don’t spend a whole lot of time talking. Instead, they’re asking a lot of questions and doing a lot of listening. Only after listening to everything the lead has to say will they speak up and start talking about ways to solve the prospects problems.
Detail oriented - inbound sales is all about follow-up and paying attention to the details. There needs to be a highly regimented follow-up plan that is followed every time to make sure a warm lead doesn’t slip through the cracks. But you also need to focus on the details of that specific prospect. If you follow up with them a month after originally talking to them and you don’t even remember the details of their house or their concerns, then you’re not building trust and won’t close that deal.
Trustworthy - people don’t like used car salesmen because they aren’t viewed as being trustworthy. Many of you likely read “Matilda” either as a child or to your own children, and you remember the dinner table conversation when Matilda’s dad is talking about the various tricks used at the car dealership to screw over consumers and make them think that they’re getting a much better car than they really are. Rolled back odometers, sawdust in the oil, etc. Fair or not, this is how the average person sees a used car salesman, and frankly, it’s how they envision most salespeople in general. So you’re already fighting an uphill battle in the trust department. You need someone in this role who exudes trustworthiness and doesn’t come across as “slick.”
Educator - a good inbound salesperson is acting as an educator more than as a salesperson. Most people calling in to ask about property management don’t really understand what exactly it is that you do, so the BDM needs to be able to condense that down into easily understood chunks that the prospect finds value in. The more knowledgeable the BDM sounds, the more the prospect will trust her, and the more likely a conversion will take place.
Facts, not pressure - objection handling is part of any sales role, but there are many different ways to handle objections. The old school high-pressure sales pitch is certainly one way, but it’s not likely to yield results with an inbound owner lead. Instead, this is when that educator hat becomes so important and you address the objections with facts and knowledge rather than high-pressure sales tactics.
Competition is Key
Outbound sales is an entirely different game. When it comes to outbound, competition is what it’s all about. And I don’t mean competition between salespeople. Sure, that’s great in a company that has multiple salespeople, as they’ll thrive on it, but more than anything I’m talking about competition with themselves, or competition with the goals that have been set. An outbound closer is someone who is relentlessly obsessed with beating the goals and beating their prior bests.
Some key traits of an excellent outbound BDM:
Persistence - this is a person who doesn’t give a damn how many times they get rejected. It literally doesn’t bother them in the slightest. In fact, some of them embrace it. I recommend reading a book called “Never Split the Difference,” by Chris Voss. The author talks about “getting to no,” meaning trying to reach a point early in the conversation where the person tells you “no,” because that helps you to find out where their true objections are and what you need to address to instead lead them to a “yes.” If you’re dancing around it endlessly and never getting to the true objections, you can’t solve the problem. A great outbound salesperson understands this intuitively and immediately seeks out where those objections are so that they can be resolved and get to a deal. This takes persistence. It means you hear an awful lot of “no”s, and only a few of them ever become a “yes.” For the truly persistent salesperson, this doesn’t bother them at all. They’ll gladly hear 100 nos if it leads to 1 yes.
Charismatic - this is where the traditional salesperson personality comes into play. When you’re doing outbound, you aren’t dealing with warm leads who “walked on to the lot.” You’re trying to convince someone who never even asked to speak to you that you have something worthwhile for them to pay for. That’s a big lift. Only people who are extremely socially gifted and charismatic are going to be good in this role.
Competitive - this role is all about setting goals for the person to compete against. They’ll compete against themselves by default, always trying to one-up their last sales achievement, but they’ll thrive more if you set difficult goals for them to hit also.
Energetic - outbound sales can beat a normal person down. Like I said, we’re dealing with 100 nos for each yes in many cases, so this person needs endless energy that doesn’t get drawn down by rejection. This person should be hyped up when they walk into each new real estate brokerage or investor meet-up, even if they’re already been rejected ten times earlier that day.
Both, Not Either/Or
The fastest growing property management companies are using a combination of these roles. And I don’t mean combining them into the same seat, because as described above, these are very different people. No, if you want the maximum possible growth rate, then you need someone focusing on inbound and another person focusing on outbound, and they need to have personalities specifically geared for those roles.
Obviously, this sounds very expensive. And it can be. But one thing I always remind people is that the sales roles are the only roles in the business that pay for themselves. If a salesperson is doing their job, they are generating far more new revenue than you’re spending on them. Of course, the problem in our business is that there is a delayed reaction. At a used car dealership, you pay the salesman when he makes the sale. You got your money from the car sale, and you pay out a portion to the salesperson. But with property management, it is usually taking most companies around 12-24 months to break even on that new client. If we look at the latest NARPM benchmarking numbers, the average Unit Acquisition Cost (UAC) is running $1,665.53 all-in:
Let’s say you’re the typical PM company in a typical market with an average rent of around $1,800. Your revenue per unit runs $300/mo, or at the high end of what the industry sees, and your profit per unit is a solid $75/mo. Some of that revenue is front-loaded by the leasing fee, of course, but there are also additional expenses at the leasing stage, so that’s basically a wash. In reality, we can count on that $75/mo for what we’ll actually make from that unit, so with an acquisition cost of $1,665.53, it will take us about 22 months to be in the black on that unit. Some people out there will argue with me on this and claim the 50-100% leasing fee moves this timeline up significantly, but those people are ignoring the cost of labor for leasing that is also front-loaded. There’s a reason that we amortize these numbers out and look at them on a monthly basis, because when revenue peaks on a unit, expenses and workload for that unit are usually also peaking simultaneously.
So, it’s true, salespeople do pay for themselves. Unless you have a massive churn rate of 50%+ or your profit per unit is atrocious, that salesperson WILL pay for themselves within 2 years on each door they close. But, it does take that time, so you need to have the cash reserves to cover that delayed reaction.
Most companies aren’t able to bring in two BDMs and float the cash necessary waiting to get that return on their money. Instead, you need to prioritize. In the long run, you will want to plan on having both roles, inbound and outbound, but you’re going to likely need to pick one or the other starting out until your revenue reaches the point where you can support a second. For most property management companies, my advice is to start off with inbound. The reason for this is that inbound is far more predictable and stable, and it generates dividends far more quickly. One of the key traits of an outbound salesperson is persistence for a reason: it takes time to close outbound business. Someone who has walked on the lot of their own volition is likely to buy relatively soon (usually within 90 days). Someone you went out and found and are trying to convince that they need to walk on to the lot is likely to take you some time to convert. In the early stages, producing results more quickly to start getting that revenue rolling in is higher priority.
Now, that said, this still isn’t a universal answer. In some markets, the inbound leads are just going to be tough to come by. If you’re in a highly competitive market and you’re just starting out, you’re likely not showing up very high on the search results in Google. If you don’t have the cash to put into paid lead sources, you’re likely going to need to focus on outbound instead to bring in business in a more cost effective manner.
In the end, while there are certain guidelines to follow, each company’s situation is unique, and you’ll need to figure out whether traditional guidelines work for your market and your company, or whether you need to make some tweaks. But the end goal is always the same: get to the point where you can have BOTH inbound and outbound sales in separate roles. Once you get there, you can become one of the companies bringing in 20-30 doors per month consistently in even medium-sized markets.
Work With an Expert
Despite this sales-centric article, I don’t claim to be a sales expert. I do relatively well with inbound sales, and I used to do a little of it for my PM business back in the day, but I am, at best, a mediocre inbound salesperson, and an absolutely atrocious outbound salesperson. However, I’ve hired and managed a lot of BDMs at this point, so that’s where my perspective comes from here. I would never dare try to “coach” a BDM. That’s just not my skillset. Instead, you need to work with someone who excels at training and managing salespeople. There are a number of companies out there that do this kind of work in our industry, including this article’s sponsor. If you’re like me and you’re not someone who excels in coaching and managing salespeople, then you need to seek out the advice of one of these companies who specialize in it. Sales is a complex field. Don’t assume that all you need to do is hire one really charismatic person and they’ll carry the day on your growth. If you do, you’re likely to just spend a lot of money on a salesperson who doesn’t generate results. I’ve been there and done that, and I can tell you that it’s painful. Look to the experts. That’s always good advice in any endeavor.
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