Six Signs You Might Already Be Centralizing and Misconceptions About Tomorrow’s Operating Model
Early centralization symptoms often go undiagnosed. While we’re not technically doctors, here are a few commonly missed centralization signs.
With dropping demand, and increasing costs to do business, companies need to adjust their operating model to keep margins healthy. Whether you’re specializing roles, or leveraging AI to add capacity, you’re moving to the new operating model.
The catch-all word that we are using for that is centralization, but don’t be scared by that word, it can mean many different things to different people.
Centralized sales, leasing, maintenance, centralized…everything. Centralization is THE topic of multifamily conversations, but one thing we’ve noticed talking with operators, and suppliers alike, is that there seems to be some disagreement about what exactly defines “centralization.”
Centralization is…
At Funnel, we define centralization as any effort to move away from individual property-based leasing and operational teams and move toward centralizing them in one or more regional locations (or even remotely) through role specialization or task automation to improve efficiencies and reduce costs. While that may sound very academic, it’s a good place to start pointing out the signs or symptoms that your company is centralizing already…(even if you might not call it that).
Centralization doesn’t mean leasing offices are ghost towns
“We aren’t centralizing because we think there needs to be teams onsite.”
Us. too.
Centralization does NOT mean that your properties are ghost towns where teams are never seen again.
Centralization IS about giving your onsite teams the support they need to focus on renters and residents (instead of administrative tasks that gobble up their time and attention).
Your approach to centralization is as unique as your business goals and property portfolio. It’s not one-size-fits-all, and because it’s so tailored, deciding what workstreams your team must do onsite, and what workstreams a centralized team could take care of for the onsite team is critical.
Centralization lets you staff strategically, and helps insulate you from labor challenges
Centralization does mean you can staff more efficiently, and strategically staff, which in the ongoing saga of staffing challenges is a welcome relief for both stretched-thin teams, and operators who can’t keep up with team turnover. In our definition of centralization, AI, automation, and centralized teams are now supporting your onsite team, which means they have time to focus on high-value interactions with renters and residents, and no longer need to do things like renewals, leasing, mid-lease changes, and initial follow-up.
Six signs you’re centralizing:
#1. Leasing activities are handled “offsite”
Leasing is a technical process with multiple steps and varies by geographic location. Typically your onsite team is overwhelmed with follow-up, resident requests, tours, and the day-to-day chaos that is life at a property.
Let a centralized team take your back office offsite and let the team of leasing experts take care of leasing for the entire property portfolio. You might call it centralized leasing, or you might just say you “took leasing offsite” either way, this is a clear sign of centralization.
#2. Multi-property teams
You have a multi-property sales, maintenance, or any other multi-property team. Some people call multi-property groupings clusters, hubs, or nests. For the sake of our blog, we’ll call it clustering. Simply put, by clustering properties in a geographic area together and having a single team take care of various needs at this group of properties, you’re centralizing.
#3. A single team takes care of the initial follow-up
You get it, onsite teams are stretched thin and need a hand. So, you have a small team that takes care of all initial follow-up for the entire portfolio, alongside your AI solution, of course.
You’re centralizing. (Super smart of you!)
By taking this workstream off onsite teams to a single small team, you centralized follow-up, giving your teams a hand and leveraging technology to make the day-to-day at your properties more efficient.
#4. Renters’ or Residents’ calls routed to a corporate number
All renters are unique, but many of their communication needs aren’t quite as unique. In our experience, they tend to have common questions, and if something goes wrong common complaints.
For some property management companies, it’s common practice for a single team to take care of many of these renter and resident needs, questions, and complaints. Therefore they route all calls to a single team, or location to answer these questions and take care of their needs.
Routing these phone calls to a single corporate line solves a few challenges that property management companies face:
- It takes tasks offsite and gives the onsite team a bit of their time back to focus on other tasks.
- If for some reason renters and residents don’t feel like they’re getting the level of service that they need, it gives them a “neutral” third party to talk with i.e. not the onsite team that they see often.
- Edge case requests that the onsite team would need to escalate to a corporate team regardless, it eliminates the onsite team’s need to play middle man in this conversation thread.
One word for you about this business practice: centralization.
#5. In-house collections
Some conversations are…delicate. Money conversations and collections are among those. Providing excellent customer service for slightly awkward interactions is a skill. That’s why some property management companies direct past residents to one office to handle collections of past-due amounts post-move-out.
Additional benefits to this plan are that this takes the burden of collections off the onsite team, and allows the property management company to collect some of these past due amounts before turning it over to a collections agency which is a lose-lose for a couple of reasons. For property management companies, they only get a small percentage of the amount due when a collection agency handles the interaction. For renters, when it’s turned over to a collection agency, it damages their credit. In contrast, by taking care of collections in-house property management companies are saving the renter’s history, and not damaging their credit, which is good for renters and operators.
#6. Regional or area managers
Do you have regional managers in your company? If so, structurally within your organization, they are probably “over” many properties sometimes in several cities or states.
In many organizations, these positions report to the corporate headquarters, and require and are some of the key players for ongoing success. This is an example of centralization-lite. If you have these positions you’ve centralized some of your operations to a corporate level.
The real benefits of centralization will be garnered by diving deeper, there’s an opportunity to apply these same centralization principles to the community level too. By centralizing and specializing roles, you would take many of the easily repeatable administrative tasks off of your leasing teams so that they can focus on providing an excellent customer experience for prospective renters and current residents.
Unlock your portfolio’s potential
We are honored to be the only supplier with a proven track record assisting some of the largest and leading property management companies with their centralization efforts. We took the lessons we learned from these industry leaders and built a portfolio-specific Centralization Playbook. And lucky you, you can
Request your portfolio-specific centralization playbook here.