Peter Lohmann describes a property management tactic where clients trying to cancel see escalating offers: three months free, six months free, then free management forever. The real goal is keeping clients for higher-margin fees like maintenance and tenant services, which make up two-thirds of revenue.
Let me read you a quote about insane downselling. You're not going to believe this. So someone decides they want to terminate management. So here's what my friend Toto says in his newsletter. He says, you got to create a form that they have to submit in order to terminate, just like the SaaS providers. And he says, next thing you do on the form is create a series of special offers. You first offer a short extension, no management fee for 3 months, and then you, you escalate it a year, then free management for good. That's what he's doing right now. If someone wants to cancel management, they gotta go through a form. First thing it does, how about 3 months free just to make it about, see if we can win you back. Then he does 6 months and then it's free management forever. That's what he wants.
And he's trying to do, he's, he's trying to do that in order to, uh, get marked up maintenance.
All the, all the fees, maintenance, tenant fees, everything else. Even at my company, which isn't like aggressively fee maxed, our management fees are only a third of our revenue. So talk about a downsell. Send me that account. It's like, how about for free?
