Decision Workshops

Letting agency

The problem

 

A letting agent was interested in using Decision Workshops to increase the probability of arranging sales.  How could the principles of dilemma elimination be used to increase the chances of a landlord using a letting agent (even though the agent charges 10% of the rent as a commission)?  The letting agent maintains a website and can introduce tenants to landlords, and can also perform some of the administrative support such as paperwork and collecting the rent.

 

What should the sales procedure be?

 

Decision Workshops looked at the sales procedure in terms of the card table and the consequent dilemmas. It worked on a strategy that ensured that the landlord never had a dilemma with the agent.  

At the point of first contact, the landlord’s dilemma is that he does not know if he can get a tenant for the flat (technically we say he has a trust dilemma with himself).  We recommended therefore that the letting agent emphasize this dilemma to the landlord: “It must be difficult to get a tenant” “How long have you been trying for?”, “Have you worked out how much you are losing whilst the properties are standing empty?” The aim is to build up the landlord’s dilemma.

 

Notice especially that the letting agent should be neutral about the landlord getting a tenant through other means.  This means the agent should not give reasons why the landlord should only work through him. He should only try to persuade the landlord to add the agent as one means among many getting a tenant.  The other “bonuses” such as collecting the rent and doing the paperwork should not be over emphasized as they are probably not important to the landlord.  The landlord would probably not want to pay 10% of his rent for this service.  Hopefully the landlord will agree to add the letting agent to his list of ways he could get a tenant, and the card table will change to that below:  

The next problem is how to deal with the thorny question of the 10% commission to the letting agency. The letting agent should broach the subject of finance to the landlord.  Decision Workshops suggests that the agent talk about getting (and try to get) tenants who would have paid 10% more for the rent than the landlord was asking, thus the landlord would not be out of pocket for using the agency.  The emphasis is on not allowing the landlord to have a dilemma with the agent. Getting tenants who would pay the asking price and then offering to pay the landlord 90% of the cost won’t work. Notice the way the story changes.

If no tenants are forthcoming the agent should then maintain a dialogue with the landlord, sympathizing with his attempts to get a tenant.   If neither the agent nor the landlord can find a tenant, then the agent should discuss with the landlord the possibility of reducing his prices to the market rate, although he should never insist that he should.  This should be an example of co-problem solving, both agent and landlord working together to solve the landlord’s problem, and building the relationship. Throughout this the agent should not suggest that the landlord stop looking for clients in other ways.  

By building up the relationship in this way the agent makes sure that the landlord never has a dilemma with him. Even if the worst happens and the property is rented through another means, it will still mean that if the landlord has other properties or the property becomes vacant again the landlord would still consider using the agent.  Also if there is a good relationship, then the landlord will be less likely to try to cut the agent out by coming to a private agreement with the tenant.

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