One of the leading property management coaches in the country believes a consumer’s perception of value isn’t fully understood by most agents or property managers.
In fact, director of the Leading Property Managers of Australia (LPMA) Darren Hunter believes the ‘law of price focus’ is so strong that consumers can perceive the cheapest agents as expensive, and the most expensive agents a bargain.
“As long as you are delivering the expectations of the client, they don’t think you're expensive. As soon as you start lowering your service levels and disappointing them, they start thinking they’re not getting their value any more and start to believe you’re expensive,” Mr Hunter told Residential Property Manager.
According to Mr Hunter, the principle applies to agents operating at all price points.
“You can be the cheapest agent in town, but if you drop your service levels your clients will perceive you as expensive," he said.
“From this principle we can see that no matter what you’re charging, you may as well not be cheap because unless you’re getting worse as time goes on, people will perceive value in you.”
It’s just one of the eleven ‘profit injecting solutions’ Mr Hunter will be speaking about next week at the Leading Property Managers of Australia conference on the Gold Coast in early April.
“In putting together the conference, one thing we’ve been hearing from property managers is that they’re competing with other offices that are charging lower fees, so we’ve tailored the event to look at this issue,” he said.
Mr Hunter’s role in the conference involved selecting and interviewing potential speakers.
“One of the speakers, Martin Grunstein, gave me an excellent analogy that summed this up pretty well," he said.
“A barber in the US was charging $25 per haircut for 20 years and was making a great income. A new barber opened up across the road and put up a big sign that read ‘six-dollar haircuts’.
“Instead of cutting prices, the veteran barber put up a sign that read, ‘We fix six-dollar haircuts’. I think this is a great way to look at things in terms of how consumers see value.”
For more information about the event, click here.