Cutting costs is one effective way for property management companies to turn revenue into profits, but eventually, they’ll run out of costs that can realistically be cut. Another option can be to raise prices but at a certain point, raising prices can alienate customers and increase churn. A third strategy for increasing profitability is to monetize additional services provided by your organization. This method grows revenue without a significant increase to operating costs.
The growing popularity of mobile app downloads, in combination with the ubiquity of the smart phone makes monetizing mobile apps a smart effective decision. There are over 2.7 million smartphone users worldwide and mobile apps are projected to generate $189 billion of revenue in 2020.
Owners and tenants want mobile access to everything they can access on the web often to deliver that service to customers, property managers have to spend more on their property management software to leverage those mobile apps needed to efficiently manage their units. If mobile apps are available to all customers, then property management companies can build the cost of the software into their management fees or charge users for the app upon download. In doing so property management companies can reduce the costs of the app to the company and increase profitability while also maintaining high quality customer service.
To facilitate payment processing and to elevate customer service, property management companies often offer integrated online payment processing. In 2018, consumers paid 43.2% of their bills online, while only 5.5% used cash and 16.8% paid using check.
When offering online payment options software providers would typically charge organizations leveraging the service for their customers’ use on a transaction by transaction basis. To offset these costs, property management companies can charge an online payment fee to customers using the service. Some software providers absolve the transaction fees payment processors charge eliminating costs of accepting online payments. If your property management company selects a software system that doesn’t require property managers to pay transaction fees, then they can still charge customers for the service, enabling pure profits from online payment fees.
Since the beginning of the millennium, online advertisement revenue has increased exponentially, reaching a total value of $124.6 billion in 2019. Property management portals, which are available to owners and tenants within a community or city, are a great place for online advertisements for local businesses. Property management companies can host advertisements and generate revenue from businesses that want to promote their services such as restaurants, activities, and excursions in the customers portals. This option allows property managers to introduce a new revenue stream to increase profitability without charging owners and tenants more, which fosters a better customer experience and stronger community relationships.
The ubiquity of technology means that more than just payment services and ad services can be integrated into property management portals. Organizations can survey customers and choose other services their customers want and request their technology provider to integrate into their customer portal. Doing this will provide customers with a centralized platform to access different things they need without navigating to different platforms, like food delivery services and car rentals, essentially providing a self-service concierge experience.