Which kind of Strategy suits your Letting Agency?
Whether you run a Corporate or a Start-Up, it is important for management, owners & directors to know exactly which kind of strategy suits the vision and direction the business hopes to go in. With the advent of the Fee Ban, no one can really anticipate what the Private Rented Sector will look like in 12 months time, let alone 5 years time. Letting Agents are attempting to navigate the unknown - business plans have to be altered as do business models - is a fee increase to landlords warranted or should Agents hold fire just to wait and see how the land lies?
Strategy specialists Dr Paul Raspin and Cliff Bowman provide in-depth guidance on Competitive Strategies . Raspin & Bowman discuss how the role of Competitive Strategy shapes the direction of change in an organisation and how it leads to a Competitive Advantage. The competitive strategies not only address the direction a business is going in, but also assists in the processes which relate to organisational change - something every letting agent in England is thinking about in great detail.
Raspin & Bowman focus on 7 strategies:-
The Low Cost approach to business which aims to deliver a similar product or service to that of competitors yet always focusing on cost-reduction.
The Innovative Approach which can be costly to begin with, however, continuously provides the customer with solutions and products they are prepared to pay for; technology that streamlines and supports processes and systems in an efficient and effective manner.
No Frills approach - stack it high and sell it cheap . The product and service are stripped down to attract the price-sensitive customer. ALDI and LIDL are excellent examples of the No Frills strategy.
The Targeting approach deals with a particular demographic and their requirements are met rather than focusing on a much vaster customer base, for example, renting solely to the over 60 age range. The services and products would be developed and enhanced just to meet their specific needs.
The Adaptive approach requires the flexibility to respond to changes in the market and changing customer needs.
The approach to Excellence involves the continuous incremental improvement of service quality. The opposite of the low-cost strategy, the mind-set here is about quality, service, professionalism and being exceptional rather than mediocre. Often an approach that customers are willing to pay for.
The Specialisation approach focuses on a single-product or product group and competes through superior product or service performance. It is possible to be dominant in a market based on being a specialist in one’s field.
So how do you choose which h Strategy is best for your business? Some letting agents focus on the low cost approach to lettings and management - fees are set at 5% for full management of a property with the objective of attracting landlords. The service levels are based on the bare minimum and any additional requirements would be charged for. This strategy does not fit all letting agents. Some letting agents set their benchmark high and provide a high level of customer service and customer care. with a specialist team who provide landlords with in-depth support. Each strategy is very different and can lead to a successful business outcome yet with very different approaches to servicing a customer base. Raspin and Bowman recommend taking the time to make a decision. Some strategies can be more exciting than others - innovation is always fun but definitely more costly.
"What's Your Competitive Advantage" offers a way to work with the realities of a complex world and the changing needs of your business. Very apt resource pre the tenant fee ban.