Concierge services: how to talk to owners about revenue management?
In this video I share with you the key points of good communication to the owner of what revenue management is and why it is essential to talk about it.
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Hello and welcome to the J'poster Complet channel, the channel which helps seasonal rental companies, professional sub-renters and seasonal rental concierge services to have the life of a serene and ultra-profitable entrepreneur from the first property.
Today, we are going to talk more specifically about the situation we encounter when we are a seasonal rental concierge. We can even have this situation when we are a professional sub-let, so stay with me if you ever had this dilemma of saying to yourself: “But I want to do revenue management, I trained for that, or I I have someone on my team who does this, and I don't know if I should, if I can, or if it's a good idea to tell my owners about it. Do I talk to those I already work with about it? Do I tell the new guys about it?” We're going to talk about it today. I'm going to give you my opinion on the matter and I'm going to offer you some suggestions in relation to that. When you join me, don't hesitate to say hello, it's always a pleasure.
Hello Laetitia, welcome!
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Hello Valérie, welcome!
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Today's subject is: what should you say to owners if you are a professional sublet, if you are a seasonal rental concierge, about this subject of price management, revenue management also called Wild Management. The owner may have a certain number of prejudices which come from the media and the image that the media convey of this profession. So, should we talk about it? Do we have more to gain from talking about it, or not then? You may have guessed my position. I am obviously very supportive of talking about it. What I also see is that beyond my personal point of view which only has value from a personal point of view; beyond that, from experience, for our customers, it is still very virtuous for them to talk about it. It's also used as a sales pitch, really.
Hello Romain, who is also faithful to our lives, Welcome! Hello to you, welcome. I'm sorry, I see your nickname and I know that you are also faithful to our Lives, but unfortunately, I no longer have your first name in mind, but I thank you for your loyalty. Hello Marie. Marie is there too. I can't check Marie's message...Hello Marie, thank you for being here.
So, on this subject of: “Should we talk to the owners about it?” I told you, I am very in favor, in fact, of talking to the owners about it. And as I told you, beyond my personal point of view, and what I also observe from experience, is that it is really a commercial argument which is of interest to a prospect. When you really have someone who is hesitant to entrust you with their apartment, the fact of being able to say that you have someone on the team who takes care of that, or that you yourself have trained yourself on these subjects, it This is such a strong argument which will perhaps allow you to compete. And if you are a concierge service, perhaps, just starting out, or a medium-sized concierge service, well, you also have arguments against what larger concierge services can offer. So in my opinion, this is an essential subject. We are evolving in the world of tourism. This is one of the points that are essential today to carry out our job well, and we cannot do without it; Now, it's still difficult to talk about.
What do we tell the owner? How do we present it to him? I'll give you a thousand, what the owner will say is: “Oh yeah, no but wait, I know the value of my apartment.” Tell me in the comments if this speaks to you. “I know the value of my apartment, I tell you, in fact, it’s 50 euros per week, and in the summer you put me at 80 euros, and then the things where, in fact, you lower the prices and all, there is no need for that”. You risk having this kind of speech, so how do we manage the situation, and how do we get the owner to realize that in fact, what we are going to do for him will actually help him win? , a lot more money. I also wrote down a few points, I have a little reminder today to help me.
Point number 1, in fact, we need to talk about it. Point number 2, it is still important to place our owner in the field of activity in which we operate, and the field of activity in which mechanically he too operates. I realized that, having spoken with several owners, for certain concierge clients, it is that in the end, we sometimes have owners who, despite the fact that they own short-term rental apartments, are extremely far from the realities of the world of tourism. Because for lots of excellent reasons. It's not their job, they work in something else: medical, civil service, whatever, but in any case, they are extremely far from all that. And sometimes, it is important to remember that in fact, we are evolving in a field that is changing. There are events that can impact us which are more or less predictable. We all know one year by heart: it's the pandemic, a totally unpredictable element, but there are others which are a little more recurring: we have strikes, we snow, etc. All these elements will mean that we are obliged to be aware of the most precise trends possible at time T and that what was true two months ago is perhaps no longer true today, and that whatever happens, even without an unpredictable element, we have a certain number of elements in the calendar which mean that we have a fluctuation, in reality, of demand in the city, and that we have to adapts to this, to be able to constantly extract the maximum financial potential for his apartment or his house. So this is really to put him in context, to allow him to realize that in fact, we are in a field of activity in which there is no absolute truth, that is to say -to say that there is not a price “divine truth” as I usually say. There is no one price “divine truth” that is true all the time. In fact, that is wrong. In any case, if we do it like that, we are not getting the full potential in terms of turnover from the apartment. So once we have managed to make him aware of this reality, with examples, we suddenly immerse him a little in the adversity of the world of tourism by saying: “Be careful, it changes all the time , you have to be aware of the facts, and then there are pitfalls, sometimes there are pandemics, there is snow, there is Greece, etc.” But after that, we’re going to say to him: “Okay, what are we going to do for you?” Precisely, because we are professionals, because we know how to manage these situations. It’s our job, so: “What are we going to do for you in this context?” “What we will do for you is that we will vary the prices, we will vary the minimum length of stay, when it is necessary, we will launch a promotion, we will use the boosters available on booking, etc. You can list the list of actions that you usually put in place as part of the exercise of your revenue management functions, either for yourself in the company, or for the person who takes care of it for you in the business. This is step number 2, to list, in fact, the levers on which we will be able to act. That he can also realize that: “Ah yes, these are things which can fluctuate, and for which it is of interest, in fact, to make fluctuations.” I'll give you the example of lengths of stay. It is often when you are new to this subject, quite surprising, to realize that in fact, you can require stays of a different duration depending on the time of year. Sometimes, we will perhaps say to ourselves that we expect stays of at least four nights, five nights, and then at other times of the year, we will say: “There, I accept everything. Even the “one night” I’ll take, because I’m not at all sure it’s complete.”. See, these are things on which you will be able to make the owner aware, and allow him to also get acquainted with the profession. Why am I suggesting that you go into detail about this? The idea is to avoid the Dunning-Kruger syndrome. I had already talked about it on the channel. I don't remember the title of the video. In summary, what is the concept of this Dunning-Kruger effect? You can Google it on the internet. In fact, it says that when you are extremely new to a subject, you tend to overestimate. So, I think he calls it: “the mountain of stupidity”…it's a bit harsh. When you are very new to a subject, you tend to overestimate your level, and you even tend to overestimate your knowledge compared to that of experts. So we say to ourselves: “Yes but hey, I know how to do prices, damn.” And then, the more we begin to understand a little: “Ah yes, there is such an aspect! Oh yes okay, there’s that too! Oh yes, that’s true, I don’t know.” So there, we have a drop in the self-perception of skills which is therefore called: “the valley of humility”, that is to say that when our level of knowledge advances, we realize little by little little, that in fact, we are really not that knowledgeable. And once we have passed the valley of humility where we really feel very little knowledgeable, little by little, with learning, we increase our perception of skills. We are going back little by little. So here, what we want, just this parenthesis, just to tell you that here, that's why I suggest you go into a bit of detail without completely breaking our owner's head, because that tires him out. But just to make him feel this expertise, this knowledge that he perhaps doesn't have to this day, and really get him over this mountain of stupidity to enter the valley of humility. And by touching on our expertise, our knowledge, and our skills on this subject, he will be able to say to himself: “Ah yes okay, it’s a real subject. It’s true, I hadn’t necessarily noticed all these aspects, but there must indeed be things to do about this.” So, we already have part of the owner's support with us on this subject. Now we are going to reach a stage where there will be obstacles, that is to say he will understand why, he will understand what it is about, and how we are preparing to do that. But he will immediately think: “Ah yes, but no, but wait, below 35 euros, I don’t take, below 40 euros, I don’t take. Oh yes, and then if it’s “one night”, I don’t take it, because it will circulate too much in my apartment, etc.” So there, see, this is the stage where he begins to be convinced, but he has fears which resurface and which will worry him in relation to what we are expressing to him.
This is why for me, in the 3rd step, we also have to tell him what we are not doing, that is to say we have told him what we are going to do, but we are going to also say what we don't do. What is what we don't do? This is a completely uncontrolled price fluctuation, which means that we are not airlines that will have a price that will change in the morning and afternoon. It makes no sense for seasonal rentals. In the same way, we're not completely oblivious people, because sometimes I hear owners think that. We are not completely unconscious people who will, for convenience, sell off the apartment in order to fill it 100%. On this, we must reassure owners that our indicator of success is turnover, see revPar. So it’s important to reassure him about that too, because some people can think that too. In the same way, we are there to work to his satisfaction, so if he gives us a price below which it is not necessary to go down, he does not wish to go down, but obviously we will respect his requests. The same way for lengths of stay. We will take careful care, like a good father, of his apartment. So reassure, and unlock all the obstacles, all the fears, all the fears, in fact, that the owner will have when listening to what revenue management is.
So that's it, and therefore ultimately switch the exchange to: from when do you consider that you would be satisfied? It's true that asking each owner for a turnover objective, this too I had the opportunity to talk about in another video, is still quite delicate, that is to say that if you place yourself in a golden prison in which each owner asks for a minimum turnover, and that, in certain months, this cannot be achieved, but on the other hand, in other months, we have done much more, sometimes it's a little complicated, because you start to manage the owners' wishes and that can lock you into certain...it can prevent you from having access to certain possibilities in revenue management. Now, if the owner remains skeptical, and is afraid of all this, well what I recommend is to finish the exchange by thinking with him about the indicators of success. What would be the indicators of success for him? If we agree to wait for them, does he feel reassured about that? Does it give us carte blanche to carry out revenue management? Ultimately, the objective is this: it is to say to ourselves, when do we tell ourselves that we have a success, and are we given carte blanche to do revenue management ? It's really important to have the latitude to be able to implement all the actions that will be necessary to maximize turnover. And then, in any case, as a seasonal rental concierge, we are, most of the time, paid as a percentage of turnover, which means that you can tell them, completely honestly, that you yourself , it is not in your interest if the turnover of the apartment is low, since your remuneration will be lowered accordingly.
To recap on all this: should we talk to owners about revenue management? I vote for yes, clearly, because I think it can really help you, and it is an essential part of the profession today. This is a competitive advantage that you can, and that, for example, our clients, often, advance to prospects and owners to show that they are not alone on board in their business, they have a team, a team solid and expert on these essential subjects. This is something that will really help you compared to your competitors in the city. So yes, talk about it. The second thing is to make your landlord aware of the field of tourism and the issues that may exist in this area. The second thing is to explain what we are going to do. The third thing is to explain what we are not going to do to unlock the obstacles and concerns, and ultimately agree on an indicator of success: when will the owner be happy with the collaboration and will be able to validate the smooth running of this collaboration?
There you go, I hope this could have helped you in the exchange with the owners. If you have any questions, please don't hesitate to ask me.
Thank you Marie for your return finally. Great argument, quantifiable too, top.
So if you have any questions, don't hesitate to ask me. Generally speaking, you can always...I know that many of you, because people tell me, they tell me: “Elise, I'm not available at noon on Tuesday or Thursday, but I check on you every times in replay”. So if you also watch me on replay, don't hesitate to give me your questions in the comments. In fact, I respond to all the comments. I respond to all comments, no more, no less, so don't hesitate to ask me, either questions about this video, or questions you are asking yourself at the moment about short-term rentals, subletting , but also seasonal rental concierge. Either I will answer it directly, or I will make a video to give you an answer on this subject. Look, I don't think I have any questions today. What I suggest to you is that we meet next Tuesday at noon for a Live on a completely different subject. Until then, you will have, at the end of the week, a video from Claire who works in the J'poster Complet team, who will talk to you about photos: how to take good quality photos? She is a professional photographer, she has a myriad of tips to give you, you will see, it's super interesting. And on Sunday, don't also miss an interview that we're going to publish, very interesting, with a...I'll tell you no more. See you tomorrow morning, Friday and Sunday on the YouTube channel I'm showing Complete, you'll see, it's super interesting. I wish you a very good weekend in advance and I'll see you on Tuesday.