NUMBERS GAME: SEGMENTING LANDLORDS
In his latest book Numbers Game, Ben White profiles four different types of landlords that have very different needs.
APMASPHERE HAS worked with hundreds of agencies over the last eight years, and we’ve distilled our learnings into a series of books. Numbers Game is the third and latest book in this series in which we explore lessons from agencies that have achieved great success, showing how to define and pursue plans that are more aggressive than the levels traditionally thought possible. In Numbers Game we introduce powerful consumer research to profile four core landlord segments and the five channels of growth.
In this article we’ll be touching on these four landlord segments, which form our framework for better understanding the minds of landlords. This framework includes both quantitative and qualitative research, conducted by a professional market research firm.
By analysing the results of this professional research, we’ve developed a good understanding of the different types, or segments, of landlords. In essence, there are two dimensions to how we define the landlord segments. This is set out in the figure on the left.
Each of the four landlord types have different preferences, perceptions, motivators and hygiene factors. A brief summary of the segments is set out here:
SILENT MAJORITY – 38 PER CENT OF
The silent majority have a broadly favourable view of the industry - they don’t micro-manage the property manager, because they assume that things are being done well. They are the most likely to have only a single investment property, and if they have more than one they are the most likely to use the same property manager for both.
OUTSOURCER – 21 PER CENT OF LANDLORDS
This segment is the least interested in having a close relationship with property managers. They are the least likely to insist on seeing the photos from a routine inspection or even consider that a necessary service. Despite this, as a whole outsourcers are less satisfied with the service received than the silent majority. They have the highest expectations yet are the least engaged of all segments.
PRIVATE CLIENT– 13 PER CENT OF LANDLORDS
This segment is the most likely to own a number of investment properties. One hundred per cent of the private client segment agrees with the statement “I need a high level of attention; I expect my property manager to contact me with regular updates, consult with me on every issue and notify me immediately if there is any issue.” They seek to have a high level of service, with a high level of customisation for the situation. Ultimately, they will find the property manager that suits them, which leads to satisfaction, and they are prepared to pay more for the service that suits them too.
AT RISK – 28 PER CENT OF LANDLORDS
The At Risk segment is best described as cynical of our industry. Landlords in this segment have often had a bad experience with a poor-quality property manager in the past and, as a result, the whole industry has become tarnished. Because they have a low level of trust but a high expectation, they will revert to micro-managing their property manager. The end result is often an unhappy relationship. Forty per cent of At Risk landlords disagree with the statement that their property managers are proactive, compared to 20 per cent as a whole. Even worse, 15 per cent think we are untrustworthy, compared to only 7 per cent overall. The At Risk landlord may well be a micro-manager and their attitude may present issues, but their behaviour is rational based on their previous experiences.
For more on the four landlord segments, including help choosing which segment your agency should target, tips on identifying segments and thoughts on how to best market to each segment, get a copy of Numbers Game today - free as an ebook and available in paperback or on the Kindle store. For more information visit to apmasphere.com/books-epm.
EACH OF THE FOUR LANDLORD TYPES HAVE DIFFERENT PREFERENCES, PERCEPTIONS, MOTIVATORS AND HYGIENE FACTORS.