Revenue Reality Check: Your Biggest Revenue Risk Isn’t Pricing, It’s Owner Churn with Julie Brinkman of Beyond

Alex Husner 0:00

Today we're back with another edition of our bi-monthly series, the first of the month revenue reality check presented by Beyond. Because if there's one thing that vacation room managers know, it's that your revenue strategy does not happen on autopilot. Markets change, booking windows shift, owners ask hard questions, and guests get more price sensitive. And suddenly, the rate strategy that looked great a month ago needs a second look. That's where Beyond comes in. Beyond gives property managers the tools, data, and dynamic pricing technology to make smarter revenue decisions across their portfolio. From protecting peak dates to filling need periods to understanding what's really happening in the market. And that's exactly what this series is all about. Each month, we're going to take a look at the moves that matter most right now, what to stop doing, what to start paying attention to, and where managers may need to double down. Okay, let's get into it. Welcome to Alex and Annie, the real woman of vacation rentals. I'm Alex and I'm Annie. And we are back today for the third installment of our first of the month series, Revenue Reality Check with Beyond. And we've got Julie Brinkman back on the show. Julie, it's so good to see you. So good to see you. How are you, Alex? Good. Love the love the green shirt. You're just bringing all the all the flavor and excitement to revenue today. Oh, yeah.

Julie Brinkman 1:19

I mean, color money, maybe.

Alex Husner 1:22

Oh, there you go.

Julie Brinkman 1:24

How are you doing, Annie?

Annie Holcombe 1:26

I'm good. I'm good. I just said I just got back from Chicago and like it's the weather there was amazing. So I actually wish I was there instead of here. It's so hot. So I'm glad you brought some bright positivity to today. So I was feeling a little hot and heavy.

Julie Brinkman 1:38

Yeah, we're gonna we're gonna brighten it and lighten it up, talking all about owners.

Building owner trust through consistent communication

Annie Holcombe 1:43

Yeah. So today I think we're gonna talk about something that is very timely since we're rolling kind of out of season in between seasons if you're in a ski market, but it's really working with like owners. So, like, what does it mean when you have to protect that owner relationship and you get to the end of the season that you could potentially lose them and you want to have conversations with owners before it becomes a problem? But where a lot of those conversations revolve is around data. It's it's around exactly what you do. So I think we wanted to dive into how we can protect those owner relationships and prevent owner churn.

Julie Brinkman 2:15

Yes, super important. The lifeblood of a property management company.

Alex Husner 2:19

To get started, Julie, the last time that we had you on, we were talking about helping property managers explain to their owners to hold their nerve when revenue plans go off course. And, you know, at what point does normal owner concern become, you know, really a genuine risk for the business, would you say?

Julie Brinkman 2:38

I think when we take it at a micro level, at an owner level, you know, one of the things we talked about was that when you are managing your relationship with your owners, the the time that they hear from you shouldn't be only ever bad news, right? And so the first rule of owner management or, you know, ideal owner management is making sure that you're setting up a good cadence of communication with your owners, whether that be bi-weekly or monthly or quarterly, using various channels. You know, some folks love email, some folks love the in-person, some folks love phone calls, some will even watch YouTube. But I think um when you have that regular level of communication, not only just from you to them, and they might not respond, they can rely that they're getting information not just when uh stuff hits the fan. Um I'll I'll keep my cursing out of this, even though my Chicago is trying to come out. And so, you know, I think when you're able to have that consistent communication and consistent type of communication, what you're sharing, so they know you're not just cherry picking what's what's going right, you're also showing them the data about what's going on the market, what's going on with you know comparable listings. That helps them understand and trust that when you're saying we need to hold rate and we need to protect your revenue because we see the market overall going in this direction, they believe you. There isn't a you know shot in the dark, communication out of nowhere. They're just a property manager coming to an owner, either saying something's gone wrong or we need to drop rate. Rather, it is part of an ongoing sequence of communications. I was just talking to a property manager today, actually, and they um they were mentioning they're in a ski market, a really um a high-end ski market. I I guess are there any like non-high-end ski markets? Right. Um maybe where I grew up, uh, where I skied on landfills, Midwest. What are you gonna do? It was super high-end ski market. They were behind, they were pacing behind like 40%. And the revenue manager was she knew she she had looked at pacing the year before. She had looked at pacing

The owner retention metrics property managers should understand

Julie Brinkman 5:03

at what had gone on historically, and she knew we need to hold rate. This is gonna pick up. And now they are ahead of 4%. And I can imagine she she didn't take zero calls from owners saying, you know, WTF, what are you doing with my seven-figure property at a minimum, holding on to this rate? Like, why aren't we selling these weeks? But with that base level of trust, you're really able to make sure that you yourself, be it your revenue manager or an owner relations person, or in, you know, in some cases an owner management representative, that you're able to convey the story and you have that base level of trust to do what the business knows to be right.

Annie Holcombe 5:42

Yeah. Do you think that property managers are putting the same lens and tracking and KPIs towards owner turn that they are just for their, you know, just general revenue management? Do you think that they're they're doing enough to pay attention to that?

Julie Brinkman 5:57

I mean, I I just have to like caveat that I am a complete data nerd. And so like KPIs and metrics are my love language. So to me, there's there there can always be more. But I think my unequivocal answer, even for the most sophisticated property managers, is no. When I ask them, when I ask what's your owner acquisition cost, which is a very core KPI, how much does it cost for you to acquire an owner? Which is the sum of the people that you have focused on acquiring owners, the advertising you're using to bring owners to your website, the amount of time you're spending to um, you know, convert that owner, I would bet you. Now I'm just gonna pull this out of thin air because I it's part of, you know, um, I I can be prone to hyperbole, but I would bet you fewer than 20% of property manners can tell you their owner acquisition cost. And if you don't even know how much it costs for you to acquire an owner, how are you ever going to understand how long it takes you to keep that owner to make sure that they're profitable to your business, to know what to spend on marketing, to know what to pay the people that are referring you owners. You know, realtors are a great source of owner referrals. How do you know what to pay them if you don't know what the return of your owners are or you don't know what the lifetime value of your owners are? I I don't want to bury people in the amount of like KPI metrics that that comfort me. But I think there's like at least five core metrics you should understand. You have to understand your acquisition cost, you have to understand your gross retention rate, meaning how many of your owners left you, regardless of how many owners you acquired in the year. You have to understand your net retention rate, which is okay, if you add the number of owners that you acquired through to the year with the owners that you lost, what is that? You have to understand the lifetime value, which is a function of those three. And then you really have to understand your channel performance. So, what are the best channels that you're using to acquire owners? Because that will make all the difference in how you think about your acquisition strategy.

Alex Husner 8:18

Yeah, that's a really good point. And I think the hard part is for property management companies is they sometimes will look at owner acquisition marketing costs the same way they're looking at guest acquisition marketing costs, which are totally different. I mean, like it's obviously it's gonna be much less on the guest side than it is for an owner, but you really do have to understand that lifetime value. And that does justify, you know, sending out postcards sometimes when you're not even getting a response. And I mean, I see this all the time that a company will say, okay, we're investing in a new owner acquisition software and we're gonna do owner marketing and we're, you know, we're gonna really give it a go. And they'll do it for like two months and then they give up. And it's like, that's not you, you really it has to be always on. I mean, that's a form of marketing that should always be on, I believe. And because you never know when a homeowner there could be something that happened today that just really ticked them off with their property management company. And they've gotten the last six, seven mailers or communications from you. And now it's this is the time. They're like, you know what, I've been hearing from that company and they sounded pretty good. I'm gonna give them a call. But it's normally it ends up being a situation like that where it's like the last straw, and then they're gonna remember you because you've been consistently reaching out to them. But when you look at it on a you know, monthly or weekly basis of like how much that's actually costing, you know, you're not typically closing deals that quickly. So it's it's a much longer, much longer sales funnel, kind of like B2B marketing, you know. I mean, you're speaking by language, right?

Julie Brinkman 9:46

Yeah, I, you know, and I think it's never been easier for companies, for for competing property management companies to try to pick off your owners. It's really easy to come up with personalized marketing. I mean, I saw today on LinkedIn um a really well-known uh short-term rental influencer post about how another property management company was using um some ill-informed data to try to pick off her owners and how A was, you know, uh questioning sort of like the morality of it. But with generative AI, I mean, it's really easy now to produce this type of content and this type of marketing at scale. And so if you don't have a consistent and persistent owner communication and owner management and owner retention strategy, your owners are gonna get like it's like the cat with the laser pointer.

Annie Holcombe 10:40

Yeah.

Julie Brinkman 10:40

Um, you know, he comes into the room. Exactly. Yeah. You know, we know property management companies that'll promise you the lowest commission rate and then tack on fees for days and you know, all the promises in the world and they don't have local staff and all of that good stuff. But when you're talking to a homeowner who may live a thousand miles away and a couple paper cuts happen throughout the year, whether it was be a cat, a guest cancellation, um, something broken, or maybe they didn't get a communication in time, they're more likely to listen to that, you know, to that property management company who who's being aggressive.

Annie Holcombe 11:17

Yeah. I've been doing a series on owner personas and the different type of personalities that you deal with. Yeah. And I think, and I think that that's that's one factor that I I feel like is not in the equation when you're talking about the owner acquisition cost and then like what the cost of that owner becomes when they're on plan. I mean, you know, some of them are time sucks. You know, some of them are people that want nothing. They want you to vomit data on them all day long. And some of them don't want to be talked to at all. Now, those are the great ones, but those are also the ones that you have to like be, you know, you have to be a little cautious about because you just never know. But I I think there's so many variables in this, and it is almost like a cat and mouse game. I mean, there's just there's so many variables with owners. You never know what your competitor is going to do. And and I think I know the the property manager you were talking about because it actually came into play that it was like it got called out that like some of this stuff like borderline bad ethics in like the real estate world. Um, and so like there's just there's a lot of things that are at play that it just adds another layer of complexity to this business that you know we're all in to on in on some levels, but what these property managers are dealing with every day. And like here we are talking

When growth hides a leaky owner bucket

Annie Holcombe 12:19

about there's one more list of KPIs you need to take a look at. Thinking about churn as a business risk, a company can appear to be growing because it's at an inventory, but they're actually losing or they're they're becoming less healthy because of the inventory that they're bringing on. And so what what are your thoughts on that? Because I think that Alex and I've been talking about that a lot lately, kind of that growth at all costs scenario. It's like we just get the get the inventory and we'll deal with it later. But it's like, you know, I know Alex and I, both um our previous companies at Condo World and then companies I had in Panama City Beach, like we had diverse inventory, but because of that, you had varied types of communications because you're dealing, you're talking with a Gulf Front homeowner versus a one-bedroom condo two blocks off the beach. Those are two completely different types of owners, different investment. I mean, so there's a lot of things that go into play. So what would you say that they need to be mindful of in terms of like their portfolio becoming less healthy?

Julie Brinkman 13:14

Having a good handle on your retention rate and the major reasons for churn are core. When you're looking at the short-term rental market we're in now and you see the level of consolidation happening at the property management, you know, with between property managers, I can tell you that owner retention rate is one of the core KPIs that the consolidators look at, because most of them are private equity backed. So if they're looking at a business and the business appears to be growing, great. But if the business is only growing because they're spending hundreds of thousands of dollars refilling a very leaky bucket, that's not actually growth. That's, I mean, we're just basically getting back to baseline and you you're spending five dollars for every dollar you're acquiring, and you know, and on those efficiency ratios. Again, remember, I'm like a KPI nerd for days. And so I think getting your handle on the retention rates, and of course they'll vary by inventory type. So condos will tend to trade more often than homes, for example. But making sure that you have the story, the numbers, and then your preventative measures, you know, and understanding the the churn reason, the churn reasons. So for most property managers, real, you know, the sale of the real estate is generally the the the most common reason of churn. And the second is revenue. The owner didn't feel like they they earned enough revenue. Now, first of all, there's no there's a problem with that sentence where they feel like they didn't earn enough revenue. It's like, well, this is data, y'all. So like someone didn't do their job somewhere along the line to communicate the amount of revenue that they were meant to earn, the amount of revenue they they were earning, and why or why not we were offered plan. And I mean, I've heard the largest property managers talk about their business developers generating a projection, handing it to an owner, and this is this is just you know day in the life of a BD rep, but that number is seared in that owner's mind. I they told me I'm gonna get a hundred thousand dollars. And guess where that projection goes in the BD rep? Like maybe in a desk drawer, maybe they never look at it again, yeah.

Annie Holcombe 15:42

Well, and and and you add to that, you add to that so many people that bought post-COVID when the real estate spiked. I mean, you've

Revenue projections and owner expectations

Annie Holcombe 15:49

looked at the panhandle numbers, you know. I mean, I looked at some stuff for Park City for somebody a couple months ago, and it was like they had a 52% increase in real estate values and in, you know, up to like up to 2024. Like a 52, how in the world does that even make investment sense, let alone sense at all? So you know that there's a lot of people walking out there that are like, I was gonna make a million dollars, and there's no way anybody's can deliver on that. So there's just there's a whole I think we've talked about this for a couple of years now. There's a whole lot of fault in in the projection thing. But to your point, if you're giving somebody something and you're not following up and continuing to communicate as to why you're not gonna meet that number, what the you know, the deficits are for the market, those type of things, like you're just setting yourself up for an absolute bloodbath at the end of the season.

Julie Brinkman 16:34

100%. And I mean, that's you know, uh, one of our clients is like, we don't even let our homeowner acquisition team generate projections. We only let the reservations team generate projections. What um, you know, because they know the market. And so we're cognizant that this is a need within the market. And I think there's a lot of factors that can go into how much a home can generate. And it's really helpful to sit down with a homeowner and say, hey, here are like the major considerations. The number of sellable nights you give me, the more that I can make you. But a sellable night is not equal. If you take two weeks at the end of the, you know, December and the beginning of January and two weeks in the middle of July, it's gonna be a different story versus, you know, September and March. You know, so I think being able to talk through what goes into those projections and then turn them really into proformas and into forecasts, and then use that to actually inform the revenue management strategy. I mean, now you're talking this is what I dream about at night, and it just coming full circle. It's just it's it's wild to me how disconnected these core aspects of uh property management really are when you have different teams doing different things, but all related to ultimately the same goal, which is earn money for the business.

Alex Husner 17:57

Yeah. And well, this is why this episode in the series is called the Rev Revenue Reality Check, because that's that's exactly what it is. And I think you know that that uh probably hits a chord with a lot of the companies that listen to this show that they've been around for a long time and they know their markets inside and out. I mean, I remember when we would have prospective homeowners come in at Condo World and our general manager would say, you know, if it was a building that we marketed in, she could tell you a range for each bedroom size just right off the bat. And, you know, you've got to ask those questions, like you said, Julia, of but I'll that's that's the range of what, and I think doing a range is better than just doing one. But then uh asking those really important questions of how much do you plan to use the property. I mean, you really have to have those, those parameters in place to be able to give more of a specific answer to somebody. But you know, as far as companies that have been doing this for a long time, I mean, lean into that, you know, lean into the fact that you do know the market that well and it is an advantage for you. And if it's a newer company, you know, you you have to just really be able to rely on the data, but make sure that it's good data that you're relying on because I I think a lot of companies end up, they overpromise in this situation of what they think that they can do, and and they're hoping kind of on the backside. The owner's not gonna want to change, you know, it might be a little bit less than what we said, but it's like changing banks. Nobody wants to do that, and then that's true, but like it does it's gonna start the relationship off on a negative foot at that point, and it's very hard to get to a good place unless you know the following year you're just really, really kill it in the revenue. But it's like if you knew you weren't gonna be able to do that in the first place, you shouldn't have said anything, but they should do the choir. Yeah.

Julie Brinkman 19:36

I mean, it's and then you're just you're not starting from trust. And now you've developed a squeaky wheel, that unit might make you $25,000 a year, remember the loudest owner you have. And I think to your point on knowing the market is incredibly important, but also watching the trends because there's a lot of folks who can look at a unit and say, I know exactly how much that's going to go for. And the other questions they need to be asking are, how flexible are you are you on your minimum? What about minimum stays? When I want to fill a gap, are you going to let me do that? Or is there going to be some, you know, archaic back and forth? And so those are all really important questions to understand and get on the same page with. And then you can suss out what persona. I'm so interested in your work on persona, Annie, to see what you to see what you come out with, because I think it's, I think the owner personas are so fascinating.

Annie Holcombe 20:25

Well, I did it in a tongue-in-cheek way. So like they all have clip, like I had last week's was um the family syndicate. You know, it was just like, you know, those families that you get into and you one person signs a contract and then you have to replace a toaster and it's a 27 person email of people you've never met and everybody's got an opinion. And one guy says, like, look, I just went down to Walmart and bought a toaster, just go do it. You know, like it's just like there's these. So I took it from like the the tried the humor standpoint, but I also use some like real life experience that I had with some conversations that had happened. And it really is kind of interesting because it's like I think you can call them whatever you want to, but everybody recognizes that there's there's there are some specific types. And then there's some outliers that are completely crazy. But I did want to touch on something that you said that I also feel is valuable as you're talking about, you know, all these teams, you can't have them working in silos. They need to be working together. And I have this approach with managers to say, like, from an acquisition standpoint, owner acquisition standpoint, your team is your army. Like every single person should be playing in, you know, whether you want to call them a team or like the army or whatever it is, they're all working together and they all have to be on point and on message and understand how each piece of it like affects them. And like, you know, the cleaner is gonna affect how one owner sees things, the the maintenance is gonna affect how owner sees things. And I think that some people don't necessarily keep their like operations teams in the loop. And to your point, like, you know, using a reservationist, they know better. But the BD is the one that's having the conversations. I mean, all of these teams need to be having conversations together because as you said, like the owner, you gotta have the owners in order to have a business. And if you're not having everybody in the business involved, and that's very, very key relationship, like you're starting. Off like just with your hands tied behind your back.

Julie Brinkman 22:03

Yeah, making sure you're all speaking from you know the same playbook. There's whether you want to call them core values or operating principles, but I think that's absolutely critical in making sure that the owner experience is always at the forefront. If you're talking about money, obviously that's incredibly precious and you want to be precise with it. But if you're a cleaner, you know, knowing that this is their, I mean, probably one of their most highly valuable assets. And so you're treating it as

Added 40 properties, lost 26: is that really growth?

Julie Brinkman 22:30

such, and your decision of whether or not to lift the couch and vacuum under it or not has an impact on whether or not this this home stays in the portfolio. So I think those are all like core operating principles that the most successful property management companies hold really, really true.

Alex Husner 22:47

Great insights, Julie, as always. And so now we're gonna we're gonna transition to a segment that we started last episode, which was really fun. And so we've pulled our audience to ask what questions they would ask of Julie. And we asked this month about uh owner-related questions. And actually, the first one that we got is is very much in line with what we've been talking about the last few minutes. I didn't have time to print them out, so I'm reading them from the screen, but I'm just picking them at random.

Julie Brinkman 23:18

There's there's a I haven't seen or heard any of these. Just that's the there's seven, and I think we're gonna get to two or three of them today.

Alex Husner 23:28

But it says, Dear Julie, we added 40 properties last year, but we also lost 26. Our leadership team still considers that growth, and we tend to describe the owners who left as unrealistic or difficult. How do we determine whether we have an owner retention problem or whether this is simply normal turnover? And to that, I would also ask, you know, what should they be investigating here, Julie?

Julie Brinkman 23:53

You know, I liken this to my business because I have customers, right? And I um fortunately not every customer stays, although I would love it if they did. It's really easy to look at a customer who's left or look at an owner who's left and said they didn't fit. They weren't profile. Um we don't have a problem. You know, those 26, they they weren't for us. Now these 40, they're definitely for us. And what's gonna be interesting is in a year from now, are you gonna say the same thing? And and so this is where I think intellectual honesty versus intellectual dishonesty comes into play. And you have to categorize and code the reasons for people leaving in a pretty um structured way. So for example, you know, when I started at Beyond, we had churn, first of all, we only ever looked at return of certain customer types that were contracted for 12 months, but we had like a whole bunch of other customers. And it was like, oh, well, only they just look at this one part. Right. Is that helping us or hurting us? Yeah, just ignore all these over here. Right. And then one of the the churn codes was like other. I'm like for there is no other define other. Yeah. So so if you get really serious about structuring um the data you're collecting when the owner's leaving, because more more often than not, you're going to speak to the owner as they're offboarding. Um, and you know, hopefully that's not the first time you're speaking with them. Hopefully you had signals. And what were the signals that you missed? Were they off pace? Were they stuck in a 26 reply thread about a toaster when it was like someone needs to call timeout and just go to the go to the Walmart, right? What what are some of the patterns that we can learn from? Because if we just look at the overall number and pat ourselves on the back, that's called complacency. And in my mind, you're only going to that that that problem, that complacency problem is only really going to grow because sooner or later you're only looking at the things that make you feel good versus the thing that the things that make your business better. So, you know, structured churn reason codes, looking at pacing, looking at revenue, what could we have done differently? Asking the hard questions and doing so, you know, we talk a lot at Beyond about like psychological safety. So it being creating an environment where it's not a finger pointing exercise. It isn't Alex or Annie's or Julie's fault that this owner left. We're a team together. We live and breathe and we, you know, we grow and we die together. Hopefully, you don't die, we just grow. Um but that you know, let's remove all of the ego and just focus on what uh on the on the question at hand, which is what could we have done differently to retain these 26 owners? Because instead of growing 40, maybe we could have grown by 50 or grown, you know, our unit count would be 50, 50 higher because we we kept 10 more. So I think those are so those are at least like the tip of the spear of what I would think about.

Annie Holcombe 26:57

We have one here that I've actually encountered quite a

Transferring founder trust as the company scales

Annie Holcombe 27:00

bit with people, and it's kind of the the founder dependence problem. And I think that, you know, companies grow, and you know, obviously you started your company, you you've had the relationships, but it's important to understand that you have to diversify it. So I think this is a great question. So I feel like I need to read it with a little dramatic flair. But um maybe I don't know, dear Julie. Several of our longstanding owners I can't do that. Um, several of our longest standing owners originally work directly with our founder. As we've grown, these relationships have moved to account managers. The owners are still performing well, but some say the company feels less personal and have started contacting the founder again whenever there's a concern. How do you transfer that trust to the company without making owners feel pushed aside? And kind of like going dovetailing off of that is like, how can a founder remain visible without becoming the bottleneck for every relationship?

Julie Brinkman 27:54

Oh, yeah, what a great question. And and I one, I think it's so critical in this industry because founders are so core to how a pro, you know, how most of these companies got started. And they're they're present in their community, they know that they know the residents, they know the people that come, the people that own the properties. And, you know, I think for for this company in particular, I'd say like one, validate that, yeah, no, we are growing. And in order to grow, we have built an incredible team to help support you and um everything that you need in order to achieve your revenue goals. And, you know, let's call her Sarah, for example. And Sarah's here to make sure that you do that. And um, if Annie, you know, you're the you're the founder. What I like to do at Beyond is I actually like to I like to work directly with the account manager, so in this case, Sarah, and show the level of trust and give Sarah some wins, help her, you know, show value and so that they can see the level of trust that I have in Sarah so that they're not coming when if they're coming directly to me after that transition has happened, I know that potentially I have an issue with my account manager. But if we're working as a trifecta and they understand that this, that not only do I really trust this person, but we are working together as a team to make sure that they are better over as a whole, then I can um focus on what really, you know, is helps the company and then that therefore helps their revenue grow, which likely isn't getting a plumber on the line to make sure that something's unclogged, right? Of course, we'll do that because all hands on deck. And at the same time, you know, you want the person that's in charge of the company managing your property to be focused on more strategic, more strategic and more value-added activities so that you're your your rental can continue to thrive.

Alex Husner 29:56

Yeah. I'm sure, I mean, you see a similar issue to what that listener expressed in your business too, right? I mean, like that this happens in not just property management companies. I've seen this for sure happen in in tech companies within the space. And you you think about the similarities of property management. One group I was working with, the the founder was also a realtor. And so in a lot of cases, he was selling the properties, getting them on the program. And so I mean, he was really building a relationship with those people. And that was a problem that now, okay, you're turned over to somebody else. And he kept saying, Well, they just keep calling me anyways. And it's like, you know, in in most cases, if somebody's doing that, they're going around the person that they're supposed to talk to because they either are not getting the answer that they would like, or they don't have trust in that person that they're going to make the right decision. You know, of course, they probably really like you too, and they have that personal connection. But I think it's also about like having that bridge between if you're not the main person that deals with that owner anymore, maybe it's more of like a segue to wean them off of that relationship so that you're still attending, you know, some of the meetings, like, you know, as as the handoff happens, so that the owner has trust that you believe in that person to be the right person to now make the decisions on their behalf. And that the owner is still aware of everything going on. You know, I mean, it shouldn't be that they're completely in the dark on things, but yeah, I think that's something that really should be talked about more, really, you know, whether it's any of these types of businesses, because that that's that's key to retention and certainly an issue.

Julie Brinkman 31:28

And the growth, I mean, and I think you like attending meetings, um, you know, not every meeting, but at least once a quarter or once a year, whenever you're having more of the strategic conversations with the owner is a great way to do it. I mean, I'll just drop notes to customers that I know. I'll look in their account and then I'll copy their account manager and we'll have had a side conversation, but that just shows, you know, hey, I'm still here, still right here. And then there's there's always gonna be the one-off, hey, something's wrong, can you take a look? And as the founder, as the owner, as the person in charge, the answer is never no. It is always like, of course, I got you. And by the way, um, you know, just just want to make sure and check

What high owner churn can mean for a future sale

Julie Brinkman 32:10

in on the person that you're supposed to be working at. How's it going? Because you can use that interaction if they're like, oh no, I just, I, you know, I just wanted to see how you're doing. Because most of the time it's that, you know.

Alex Husner 32:20

Yeah. Well, and you need to make the owners feel comfortable that if something is going wrong, that they can tell that person. I mean, if sometimes it's a personality clash. And I think that it's important to also match your owners with property managers that are gonna really, you know, they're gonna, they're gonna mesh well. And so it really is a process. I mean, there's so much to this business, and at the end of the day, a lot of it comes down to the relationships on all levels are so key to making this successful. So that's people are the the biggest and the most difficult parts of any business.

Julie Brinkman 32:54

It's incredible, right? Like you can have the best idea and the best technology, and just you know, if you don't have the right people, yeah, it ain't gonna work.

Alex Husner 33:04

Yep, yep, that's true. Okay, we've got one more that we're gonna read today. And so this one says, Dear Julie, I hope to sell my property management company within the next three years. Our revenue and total property count are growing, but annual owner churn is close to 28%. Should I be more concerned about the net growth or the numbers of owners leaving and what should I start fixing now?

Julie Brinkman 33:29

Yes. First of all, congratulations for thinking longer than 12 months in advance because I think that's incredibly important. If you're looking at selling your business in three years and your owner churn is 28%, you are um you're flying very close to the sun in terms of what we see private equity or large property managers being willing to stomach when it comes to owner turn. Um, I think there's, you know, there's a small study by CT acquisitions, which basically said 30% owner turn was like a hard stop. So here you are, two points away from that. And so knowing you're 36 months out from a potential sale, my guidance to you would be you need to get your owner retention under control. And where is the where is the leakage happening? Is it happening from over like overselling expectations in the beginning? Is it happening because they're quiet and you think they're fine? I mean, Annie, when you mentioned that persona, we have those customers and those, those are the ones that keep me up at night. I'm like, you have to find a way to stay in front of them so they know that you are still there and taking care of their guests and their property. Is it on the reporting end? Are they not getting the information that they need? Do they crave a story? Do they crave the meetings? And so really breaking down the owner life cycle, I know that sounds so you know business school-esque, but which part of the owner life cycle are we really losing these owners? Are these long-standing owners or are they new owners? Because if they're new owners, oh man, now we had a bigger problem. Now we just spent a bunch of money to go get them. If they're longstanding owners, are they transferring

Using portfolio data to identify where attention is needed

Julie Brinkman 35:10

to there's this wealth transfer? And how are we not creating relationships with the people that either are getting the property sold to or transferred to or you know, inherited? So I think those are the things I'd really, really focus on because net growth in and of itself, it takes two clicks to get below to see that you're spending too much to acquire because you have a leaky, leaky bucket.

Annie Holcombe 35:33

Yeah, it's a lot to consider. And I think that that actually goes into kind of like another part of the conversation is should a property manager and could they actually with Beyond set up a dashboard that with their metrics to be able to flag them when stuff is happening? So, you know, maybe an underperforming property year over year that maybe needs some love and attention. I mean, are there things that they could be doing to understand the health of their owners?

Julie Brinkman 35:57

I love that you ask about our product. You know, I love to talk about our products. And I try not to be super proud. I figured you had some insight there. Um, so we do have right now in beta our owner hub module, which does include the ability to acquire, manage, and communicate with your owners. So that is everything from projections to listing analysis to generated reports that are really personalized and really intuitive. The other thing that we like to also do is help revenue managers or portfolio managers take a step back and see their portfolio as a whole. Because, you know, if you look at a listing level, um, it's fine up until, I don't know, two dozen. But once you start getting past a certain amount, managing at a listing level becomes completely cumbersome and you're incapable of knowing what's going on. And so we'll be um also putting into beta our performance manager, which helps um basically understand across all of your groups and your cohorts where listings are performing relative to their goals and relative to the market. And you know, you can imagine sort of like a two by two quadrant where you know you have on fire. I am below the market, I am below my revenue goals. And then you have like caution, right? These people are pacing. We need to start paying attention to them. Then you have the high flyers. And high flyers aren't don't talk to them. It's like, hey, that's the time to take a victory lap.

Alex Husner 37:24

Yeah, you're great. Yeah.

unknown 37:27

Yeah.

Julie Brinkman 37:27

Because they want to brag too. Exactly. Exactly. I mean, we had we just had a customer whose house did like $500,000 last year.

Annie Holcombe 37:36

I was like, Yeah, uh, do I give them a high five?

Julie Brinkman 37:40

Can I go inspect for this? I know, right?

Annie Holcombe 37:42

And can I need to visit for at least a weekend?

Julie Brinkman 37:44

Yeah, it's like I don't know, in January. Um, yeah. But those, I think being able to step back and then so okay, so you have the view. So now what? Now you need to be able to zoom in, diagnose, and then act really quickly. And these performance dashboards have to be dynamic enough to understand what is and what isn't important. Because let's say I'm looking at the next 90 days, if I'm pacing behind for the next 90 days and I am a 30A property, that's less important to me than next summer, right? And so, how are we understanding what's peak, what's not, what's what are holidays doing, and and really diagnose and then be able to take um informed action at scale. So a lot of exciting product coming out of beyond to help property managers and revenue managers do their job more at scale so that they can help move the top, the bottom left up to the top right on their little two by twos. And I'm sure you'll be able to show us this at BRMA, right? Um, it's weird, right? We kind of have our product times for perfect timing. Yes. Um, yeah, looking forward to Nashville.

Alex Husner 39:00

Awesome. Yeah, we're looking forward to seeing it. I just have one follow-up question to that about the dashboard because I think that's where companies sometimes get caught up because you know, they're the bigger companies, if they have a revenue manager, they have multiple property owners, they have the general manager, you know, there's a lot of different roles within the company. But I mean, for companies that are are using your system and the way that you foresee this dashboard even growing to be used even even better to help companies, who should own that? I mean, like is it revenue? Does it start with revenue management or can it start at a different level in the company if they don't have a revenue manager?

Julie Brinkman 39:33

Yeah, I mean, it's really anybody who is interested in performance. And so in some cases, there might not be a revenue manager. It is the property manager. We've specifically thought about the revenue manager and helping her scale, not just from like, I can manage 100 or 200 listings, but I can manage a thousand to two thousand listings. And, you know, I hope in Nashville some revenue managers don't uh throw tomatoes at me for saying that. But how do I make her job the easiest? And um, I think the the property manager, you know, at that scale, property managers and investors can get their information in a different, more seamless way. But this is really meant to be an action, not just like a visual, but like an action dashboard. Here's here's not only what's going on, it's what's coming and what you need to do. So like take these next 10 steps to get these groups performing higher.

Alex Husner 40:31

Yeah, no, great, great information, great insights. And we're excited to see your as this a presentation you guys are doing, or how are you rolling it out at VRA?

Julie Brinkman 40:41

Oh, um, yeah, you know, come by the booth. I love to demo products.

Alex Husner 40:45

Okay. You guys always have a great booth. Well, thank you for joining us again, Julie. This is always a fun segment. And for anybody listening, if you have burning questions for Julie, I would suggest submitting them because we kind of try and do a different theme each episode for this, but we've got some more coming. And I know Julie would love to answer them for you. And she's got some great insights, so send them all away. But Julie, if anybody wants to get in touch with you now, if they can't wait, they have a burning question. Need to answer immediately. How do they get to it?

Julie Brinkman 41:18

Um, my cell phone is no uh Julie at BeyondPricing.com is how you reach my bait me by email. I'm in box zero. I respond to everything unless you're trying to sell me something, then most likely I won't uh or my LinkedIn. Um, I'm not on Twitter or Insta or TikTok. LinkedIn's a lot. Yeah.

Alex Husner 41:39

If you're in box zero, it's hard to manage all of it. So it's a great awesome. Well, if anybody wants to get in touch with Annie and I, you can go to alexandanipodcast.com. And until next time, this has been your revenue reality check. Thanks, everybody.