The first step to get where you want to go is to know where you are right now; anyone who has been on a winding road trip can tell you this! Market share is one of the critical metrics you should be keeping an eye on to understand this principle.
Whether we're in the middle of a pandemic or not, market share gives you an inside look into how effective your property management business is at generating and keeping your property management leads. Having this data carefully calibrated also gives you a snapshot of where you are as a company relative to your competitors.
There are several property management tools you can use to generate these figures that keep you aware of your progress and start conversations about increasing market share over time. Ultimately, an increase in market share means an increase in property management leads that have converted to clients.
Insight Into the Meaning of Market Share
Market share is effectively your "piece of the pie" when it comes to the entire property management industry in your area. Rather than merely noting how much total revenue you generate or how many doors you have under management, market share notes how much revenue everyone in your area produces, including all of your competition. It then expresses your part of that total number as a percentage. Therefore, if you are one of four equally-popular property management companies in your zone, you'd have a 25% market share.
Knowing these kinds of numbers, regardless of a crisis like COVID-19, is a useful skill to have. However, during a pandemic like this one, it can also give you insight into your competition—and if you have a chance to claim more market share in the form of property management leads. Additionally, it tells you how effective your strategies are compared to everyone else.
How Do You Calculate Market Share?
Calculating market share starts with easy math.
- First, find statistics from your property management tools that showcase your total revenue.
- Then, calculate the total industry revenue.
Calculating the total industry revenue is more complicated, of course; your competitors may not want to open up their books and showcase how much money they are making! However, you can approximate the industry numbers using a few methods:
- Some people work from doors under management and average revenue from a particular kind of property, scaling up to the total amount of rental properties in your area.
- Another method might be to see how many employees your company has versus revenue and compare that to the number of employees at all your competitors' companies if that information is available. You'd then use it to approximate the total potential revenue.
These numbers are estimates, of course, but they are further complicated by the portion of the market that is DIY, landlord-managed properties. Until these property management leads convert into clients, they behave as an indirect form of competition. That said, knowing exactly how many self-managed properties are out there can be a hard number to calculate.
Start your market share calculation by figuring out what reliable data you do have as a company and creatively asking the question, "what do we need to know to estimate the size of the total property management industry in our area?"
Making Use of Market Share Statistics in the Future
Once you have your market share information, you can use it as a metric to gauge how your company is surviving and growing over time. You can also see it as a benchmark and have brainstorming sessions to create new methods for improving market share relative to your competitors. Here are just a few of the ways that property management tools and strategies can help you gain market share.
Boost Brand Awareness
The first step to getting more of the market share is for more people to know who you are! You can offer fantastic property management services and still not grow if no one knows about you. Getting satisfied customers to share their stories, creating useful content on your company's blog, and getting active on social media can all help to boost your property management leads—and market share—through growing brand awareness.
Find Untapped Potential in the Market
Another way to grow your market share is to actually find new aspects of the market to engage with. This enlarges the pie—but gives you the first chance to reach those elements of your market. There may be a lot of new people moving to your market, or you may have an unusual share of out-of-state landlords who previously struggled to manage their properties. A new subdivision where rental properties are available, for instance, might be a new place to proactively advertise your services.
Lower Your Prices or Increase Your Service Value
Of course, the less-fun way to gain market share may be to offer discounts, promos, or other lowered prices. In a market where competition is fierce, or you are starting up with a smaller market share, this may be the way to go. No one likes to raise prices in the future, though, so it's wise to really think through this option.
Another way to make your prices seem lower is if you can clarify to your customers any new aspects of your value. If you've gained new property management tools, or have an excellent new vendor partner, mention it to your customers as a "free add-on" that improves the value of your services. The longer the list of services with you, the less likely they are to look to someone else!
Offer Outstanding Customer Service
Fundamentally, great customer service is what will sustainably gain and retain market share. Landlords want the process to be easy and clear, and if you can continue to keep every aspect of your customer service at a high level, you'll see growth over time. Note your market share every year to keep the conversation going about how to improve in relation to your competitors!
That said, knowing your market share is just data at the end of the day. If you don't know how to apply this to generate more property management leads, you're still in trouble. This is especially true now in the wake of the COVID-19 crisis, where your leads might be battening down the hatches. Once you know where you are and where you want to go, you need a game plan to get there.
That's why we put together our FREE Business Development Handbook for Selling During Social Distancing. Now that you have a remote team capable of keeping your business going, you need to maximize their skills by learning how to convert your leads to clients—even when you can't meet face to face.