Welcome to the Eventual Millionaire Podcast. I’m Jaime Tardy and today we have Brenton Hayden on the show. Brenton is the President and CEO of Renters Warehouse and they have been named in the Top 5 Emerging Entrepreneurs of 2010 by Entrepreneur Magazine and ranked Number 15 in America for fastest growing real estate company. He’s also a serial entrepreneur and owned eight companies all one million plus and even was a host on Fox News by age 26 for the radio. I am so excited to have him on and all of his knowledge on the show today. Thank you so much for being here, Brenton.
BRENTON HAYDEN: Jaime, thank you and guess what, the Inc 500 5,000 came out just today.
JAIME TARDY: Oh yeah?
BH: And we’re now Number 3 on the fastest growing real estate companies, Number 132 in America for fastest growing companies so we jumped up several hundred slots this year so I am pretty pumped to tell you that.
JT: Congratulations! That’s amazing.
BH: Just got the results no more than an hour ago.
JT: And you’re saying it here just now. Perfect! So tell us about that. How has this past year been? How did you grow so quickly and bump up so fast?
BH: What’s good to know about those numbers is that they’re a year behind. So I’m actually experiencing rapid growth right now. I mean I’ll tell you that I’ll make the Inc 500 5,000 again next year, I’m sure of it because we’ve already surpassed our revenues from last year months ago. So we’re really doing big things. Inc 500 measures year over year over year growth. Three years and we’ve been averaging at 2,080 percent growth year over year based on the three-year average. I think last year it showed us at a 3.3 revenue. I anticipate that will double that this year in 2011.
JT: Now that’s amazing. So I’m loving that you’re here on the show today because you’ve done tons of companies. Tell us a little bit about how you started in all this and then what we’ll do is we’ll go into how you’re able to obtain that massive growth. But let’s first start with how did you even get started as an entrepreneur?
BH: Well, I don’t have it running through my blood. I think I do now. I think there’s a virus I caught at some point. But I had intended to be a police officer at one point in my life. I never intended to go to college and I had a great job right out of, after I dropped out of the police academy to take a great job with a Fortune 500 company, Kellogg. I worked my way up from a sales rep to a territory manager and broke all kinds of company records. Got rookie of the year for the company Kellogg as a sales rep, territory manager of the year, territory manager of the quarter, just always a great salesman.
I found my calling which was sales and they bought a company and they downsized and I was given severance and let go. Somebody told, and I was at a young age. I was 19 at this point and I was at a young age where I was used to making a six-figure income already and I didn’t want to let that go and I don’t know anywhere else where a 19-year-old without starting his own business or if he’s in real estate where he can make six-figure income. So I started in real estate. I started to go work for the top real estate guy in town, learn whatever I could and after I felt that I had a good handle on what he was doing, I was really kind of impressed of how he built his business and then I got to thinking could I do this? Could I do it on my own? That’s where that itch started to begin.
Ever since then, I went out on my own to another big name brokerage instead of his. After he had gone out on his entrepreneur venture, he was going to create his own real estate company. I decided I was going to go to another big brand and start mine and I spent a couple months there and I just didn’t like the corporate feel so I said I’m going to start my own real estate company. I hired my own broker. I created my own business plan. I created my own concept and it took off from there. But that was in real estate sales. I am in property management now. I do have a real estate sales brokerage. I also have an online real estate sales company. But that’s what got me going into my first entrepreneurial venture.
Then after that came, limousine company, restaurants, consulting companies, dotcom companies, to real estate companies, to maintenance, to HVAC companies. My own quote was this: “A missed opportunity is irresponsibility.” Nowadays I might change that up a little bit as you can only handle so many opportunities as I am starting to sell off some of my business to focus on core business, my core focus on some of the companies. But that was my own focus and so I took advantage of a lot great opportunities that presented themselves to me and I made a go of them. However, each time I got something going, it got to be too big where I couldn’t let go of my bread and butter which was this company I have now, Renters Warehouse.
In order to divert enough focus to that, to take that company beyond a million so I would sell them, let it go, get bought out, etc. Or, in often times, I have had companies that started then I failed. I couldn’t get them off the ground. I don’t know if that’s a true failure because I really didn’t give a lot of time to them but they were companies I perhaps shouldn’t have started and there was lessons learned from that. But my entrepreneurial fire started way back when I was working for another and really, he was a great entrepreneur and I learned a lot from him.
I saw the respect he was given. I saw the respect he got from his employees and the gratitude he got from owning his own business and I had hoped to acquire to do that one day.
JT: That’s great. So you said at the very, very beginning though that you were in sales and you sort of have a gift for sales. Do you think that’s what caused you to be a great entrepreneur because sales is sort of the life blood of your business?
BH: It is. You have to have the gift of gab I call it. You have to be able to talk to people, spark up a conversation. What most entrepreneurs don’t have often is money to start a business. Now that I have money to start a business, the businesses that I started with lots of money have not been nearly successful and I think that’s because they had money and when you don’t have money, what you have it time and what you do with that time is you network. You tell everyone about your business.
You get out, you pound the pavement. You do a lot of the work yourself and those businesses that I built that way are far more successful, far more grounded and have frown the right way than the companies that I have rapidly grown through influx of cash and capital. I would strongly say that you need to be able to talk to people and really to get your business off the ground you have to tell everyone that will listen to you all about it and rather than advertise it, you got to be your personal ad, you’ve got to be your own walking billboard.
Even to this day, almost 90 percent of my time I’m looking at my other shirt, I wear a shirt with my logo on it, my company name on it. I do like to wear a suit and tie a lot but if I’m not wearing a suit and tie I’m wearing a company branded shirt because I like people asking me about it. I like the idea when people go, “I’ve seen your company.” Alright, I worked with an agent of yours or I saw you in the news. I love that. That gives me an opportunity and opening to tell them what I do, how I work, how I charge, how I can help them. Everything about the business because as an entrepreneur you have to be passionate about your business and I love talking about it.
JT: Great. So what do you think a mistake was when you very first started? When you were very first getting into it.
BH: Being ignorant to some obvious things. Making business relationships and contract relationships with vendors or partners is a lot like making friends. You don’t know who to trust. Everybody has got smiles but everybody has got their own angle and got taken advantage of – some of the wrong partners, some of the wrong vendors, some of the wrong lawyers. I got bad advice. Didn’t seek advice. It’s just you got to be careful who you associate with because your business starts to create its own entity.
Renters Warehouse or XYZ business becomes, in itself, a person and that person is going to be judged on who they do business with and their accomplishments and so you got to really be careful of, we’ve let go a lot of our biggest customers because they weren’t good people to do business with and that was hard to figure out. It took me a long time to figure that out that money sometimes outweighs principal or principal outweighs money. We’ve become a principals based company and I think if you could start that from the ground up from day one, you’ll have less hurdles and headaches as a result and I think my mistake was, I made a couple of mistakes.
I was kind of ignorant to the obvious. I wanted to grow fast and I wanted to make strategic alliances but sometimes it didn’t make sense but I made them work anyway. And the other times is I was cheap with legal. I didn’t do my legal research. I didn’t have a lawyer prepare all my legal contracts. I didn’t have a lawyer prepare my LLC and as a result, for the first couple of years I had a lot of headaches as a result of that.
JT: That’s really good advice. I know a lot of people that are sort of on shoestring and start up budget don’t want to put too, too much into legal and just get with what they can but you’re saying making sure you spend some money on that.
BH: You have got to do core things like that right out of the gate. If you don’t, it’s going to cost you double, triple, quadruple in the future and potentially even cannibalize your business. I now, when I start a business, I factor in about four to ten thousand dollars of legal right out the gate. Now sometimes that’s an exaggeration because I like to do a little bit over the top but setting up from basic things to setting up your LLC to corporate minute books to your business plan to your partnership agreements, your independent contractor agreements, your employment agreements.
Having them review your insurance binders to make sure that the insurance you’re buying is in fact relevant and going to be applicable to you. I can’t tell you how many times I bought insurance that was never going to benefit me because of all the exclusions in it but I was told it would and that’s what I needed to know. But now I have lawyers review those things, I find I saved a ton of money and I avoided a lot of liability by having a good lawyer in my court.
JT: So let’s actually bring this back then to sort of one of your companies. What do you do to start up a new company since you’ve done it so many times now and grown them so much. What were you to do if you were to do it again right now?
BH: Day one, first thing ever? SWOT analysis. I’m sure a lot of listeners and viewers have heard of that. SWOT – strengths, weaknesses, opportunities and threats. Before you even put pen to paper, everybody has got a great idea. It’s the ability to execute and before you can execute, you need to know your competition. You need to know your strengths and you need to know your opportunities and your weaknesses. So I do a SWOT analysis first thing. Anytime I have a great idea it is and I don’t validate it as a great idea until I’ve done my SWOT analysis. So that’s step one.
Step two is incorporate. Get your dotcoms in order. Get your LLC, your corporation in order. Get your IRS in order. Get your direction, you know, your what’s your end game, what’s your entrance strategy? How are you going to make a splash? How are you going to get out? What’s your exit strategy? I like to know my exit strategy before I even get in. And then define your mission statement. I don’t like making business plans more than about two pages, three pages but my SWOT analysis can be pretty extensive.
It’s never this awesome well put together presentation. It’s a lot of printouts from the internet. It’s a lot of scribbled notes, napkins, post-it notes whatever. It’s what you know in advance before you start a business. So I start with SWOT analysis, my legal paperwork, my incorporation, my dotcoms and then I start to look at my advertising and marketing. I believe advertising and marketing, no matter what kind of business you’re in, if done right is going to be your growth stimulator – what’s going to get you to grow fast.
Viral marketing, word of mouth, those are like winning the lottery. If you can actually get that like Facebook and Twitter and find people that will just blow your product up for you, you are very lucky and good for you and if you can execute after you’ve gotten that business that’s great. But most people won’t be able to grow that way and you need to advertise and market and I think having a good advertising and marketing strategy knowing your value proposition before you begin, knowing what people are going to want from you, being able to overcome those objections when they compare you to other competitors in your space, that’s where that SWOT analysis comes in.
It keeps coming back. If you know who your threats are, when somebody tells you did you know XYZ company does it for half price? Well if that takes you by surprised, you’re not prepared and you’re going to lose that client. If you know your strengths compared to that company, the apples and oranges equation, you’ll do better of. So those are, I think those are the four core things I almost always start with.
JT: What sort of a time frame do you have when you start – before you start going sort of gung ho in the advertising and marketing sector?
BH: I used to think I was superman and could do it inside 30 days but now it’s 90 to 120 days before I actually try to open the doors and say I’m open. Three months, it’s not always planning. It’s just getting everything in order from phone and internet to website development to advertisements, brochures, contracts, LLCs, tax IDs. Your separate set of books. It just takes time and it probably takes me maybe a little bit longer because I have other things going on but 90 to 120 days I think is realistic. It allows you to pace yourself. There’s a great book I read called Rework.
JT: Love that.
BH: There’s a great quote in there, “ASAP is poisonous.” If people are rushing you into something, that’s a great time to stop and pause and look at your options and don’t rush. Do it right the first time, you’ll always come out ahead I believe rather than, you know, being second to the marketplace is nothing from being first and unprepared.
JT: That’s solid advice. Excellent. So what do you do in the sales and marketing and really trying to get your business off the ground? You are the man with growth so we want all your tips and advice on that.
BH: Know what you’re going to say before you say it. Have a script because when your business has a lot of great things about it, you want to make sure everybody gets all that information when they get a chance to talk to you. If you’re writing your elevator pitch, you’re elevator pitch should have all the great things that you need to make sure differentiate or are your unique differentiators in your elevator pitch. So when somebody calls you and says I’m thinking about doing business with you, you need to make sure before they hang up that phone that you’ve told them everything of value that you think is important to them before they get off and the way you do that in an efficient and time friendly manner is to have s script.
A dialogue of conversation in advance before you do that conversation. That’s important. Having a good follow through system, a CRN, a lead tracker is important. Knowing how to use it. Don’t go gung ho. Don’t try to have this massive email campaign, multiple stages of CRN. Just have a name, phone number and email address and know how to set up a follow up date is all you really need to do to be that much more effective than probably half of your competitors. So that’s important I think in sales is if you say you’re going to call back tomorrow at 4:00 p.m. don’t make it 4:15. Make it 4:00 p.m. and never forget because now you just became a liar when you had an opportunity to gain a customer, you lost a customer and became a liar.
Nobody wants to hear your excuses of why you couldn’t make that call. Be prepared. Honor your commitments and then know the objections before they ask them to. I think that’s the biggest. That’s one of the things we train a lot. We have a lot of competition in the property management space and we do things very differently so we’re kind of the oddball property management company. We do things so differently that everybody else fits into this normal box. We fit over here in kind of this outsider’s box but we like being that outsider but we have to do a lot of explaining the differences between other companies and some companies look cheaper but maybe aren’t. Some companies look easier but maybe aren’t. It’s just all about knowing those objections before they come up and when they come up you’re prepared to answer them.
The other thing I preach a lot and I don’t know why I say it this way but everybody seems to like it when I say it is be a billionaire in your own mind. When you’re talking to somebody on the phone they can’t see you. They don’t know much about your business. You’re the first impression and you have to exude confidence in your own business. If you’re not confident and don’t know your business enough where they can feel the confidence, you’re not going to get that business. But if you’re a billionaire in your own mind and you have this, not a cocky attitude but you’re so confident that your business is the best choice for them that they would be foolish to not choose you, and that you’re going to do your best to make sure they know everything about you and that they completely understand why you’re thinking that, then you’ll do a great job in sales.
You have to exude the confidence on the phone. You can’t be distracted. You can’t do ums and uhs and just things like that where they think you’re reading from a script you don’t know by heart. You really have to feel it and know it and that’s where that script training comes into play well in advance. Knowing that by heart, knowing any objection, response by heart. Knowing your business by heart, those will all make you more confident on the phone and exuding confidence through the phone is important.
JT: Great. So mindset is really what you’re talking about. How do you have that billionaire mindset when you’re not a billionaire? Especially if you were 19 trying to do sales, how did you really have that confident mindset even when you were so young?
BH: Everybody should have it. You’ve got to be passionate about your business and passion, I mean people are passionate about their significant other, they’re passionate about their hot rod car in the garage. They’re passionate about boating. If you’re boating, if you’re more passionate about boating than your business, what can you do to make your business more, make you more passionate about your business? I’m very passionate about my business. I believe it’s the best property management company that I know if.
Anybody that talks to, I can answer about any objection. I know almost all my competition. I know their strengths, their weaknesses. I know my own strengths and weaknesses and I exude that confidence in my business because I believe in it and I’m passionate about it and that’s because I built it. I created it and I modeled it after what others would want and what I want to become as a business.
JT: So tell us what exactly does your current company do, how many employees you have. Tell us a little bit about Renters Warehouse.
BH: Renters Warehouse has 26 employees. We are dedicated to helping every type of property owner lease and then manage their residential real estate. Now whether that’s a real estate investor, a corporation like we buy ugly houses or hedge funds or the unintentional accidental landlord that just can’t sell or loose too much if they did. We show them how renting can be an alternative to selling in a down market.
So we help them lease their vacant units. We help them manage that property by becoming a landlord for hire and then we add big layers to the accountability by guaranteeing our renters, by covering costs associated with eviction, enforcing the lease so you don’t have to. Taking those late night phone calls over maintenance requests, facilitating evictions if necessary and preparing the proper legal documents. We are a landlord for hire for any type of residential property from a high rise apartment complex to one small condo, townhome, loft or single family we can help you regardless of what type, how many properties you have and what your background is.
JT: So was that your vision the whole time? Like when you first stared the property management company, did you want it to be a large company that really did everything that you’re doing now?
BH: I can’t say I honestly said that I’m going to be large company and that’s my end goal. I wanted to, I was more focused on being different and the best property manager in town and making it a no brainer when you compared me to other property managers. I was so focused on that that I really didn’t think too far ahead. I just said to myself, if I do these things and I do these things right, people will want to do business with me and as a result, I’ll do very well as a result.
Did I ever think to myself I’d be as big as I am now? I don’t think so but the last two years I’ve really thought about that and growth and now it’s all about customer retention but yet still bringing in new customers, adding value to customers who have been with me awhile. Fine tuning processes and systems. It’s kind of a new battle that I focus on. But I didn’t think I would be franchising. I didn’t think of that until two years ago. Did I think I would be a successful business and probably one of the larger property managers? I think I did.
JT: How long have you guys been in business?
BH: Renters Warehouse was formed in September 2007 however I had been doing that same work under a different business name which we rolled into this since 2004. We were know as Hayden and Company. That’s still our legal name but everybody knows us by Renters Warehouse.
JT: So tell me about that name change then.
BH: I didn’t intend to be national or even regional. I intended to be a Minnesota local company. When I was in real estate, people called my brokerage or my company because of Brenton Hayden. I was a really good agent. I was a really good property manager. Still up until about a year ago, the number one search term to direct you to my website was my actual name. So I thought well I’ll just become Hayden and Company. People know me for me, they don’t know me for a company, they know me for what I do and that will be my business.
I kind of liked the prestige of other businesses that are out there like Jacob and Company, the jeweler to Tiffany and Company, the jeweler. I like that kind of feel, that look, that brand and I wanted to go for that but then as I decided I wanted to be more regional, more national, I thought I’d give it a more national friendly name and one of my first entrepreneurial ventures after I started my own property management company was to create an online website where people, landlords could come and post their vacant rentals and renters would come to find vacant rentals and that was Renters Warehouse.
However, the biggest client was myself and people called Hayden and Company all the time and say is this Renters Warehouse and we eventually just stopped that project and became Renters Warehouse and abandoned pay per ad performance and said we’ll become Renters Warehouse Property Management Company instead of Hayden and Company.
JT: It’s a great story. So tell me a little bit about some current marketing strategies that you’re using in any of your businesses that seem to really be working well for you.
BH: Great spokespersons. That is a big part of what we do. We have several, especially local ones and we have a couple national ones. Our national ones, first and foremost, is Glenn Beck, the controversial radio host on Fox News and he is the third most listened to radio personality in America. The one thing about Glenn Beck is you either hate him or you love him and, if you love him, you fiercely love him.
So we don’t use him everywhere because we try to remain business neutral but where people appreciate him like conservative political talk radio, he is our spokesperson and he’ll play ads. Hey, it’s Glenn Beck for Renters Warehouse, I want to tell you about a company I’ve used before, I trust and who manages my real estate and that’s Renters Warehouse.
So when people hear Glenn saying I endorse him, if you use him I will too, he gets the phones to ring because Glenn has helped them make their decision. They really trust in Glenn that Glenn won’t steer them in the wrong direction and Glenn I think takes a great personal accountability in who he endorses. He did a lot of due diligence on us before he endorsed us because his reputation can be damaged if a company were to be controversial and hurt his reputation.
We also use Josh Altman. He’s a reality TV show on a real estate show called Million Dollar Listing on Bravo. He is our paid spokesperson as well. He helps, his voice, his image, his face, helps get the message out about what we do as well. Radio advertising has been very good to us when used appropriately. SEO and pay per click has been very good to us. Those are our two biggest advertising mediums. Now we’ve run across a lot of bad SEO and pay per click companies and practices.
We’ve ran across a lot of bad radio ads and radio stations. It’s finding the right ones and tracking them to make sure they work is important. Over the last few years we’ve really honed in on that and as a result, we’ve been able to find some really strong advertising venues that we maxed the potential out of.
JT: Okay so both radio advertising and SEO and pay per click are sort of the main thing for your right now.
BH: Online is important. I mean nobody opens up the decks or the yellow pages anymore.
JT: I know, I don’t even own them.
BH: Yeah, and not many people use yellowpages.com or decks.com to find. They have gone to just I’m going to search myself for property manager Minneapolis, Minnesota and who comes up first is almost like a popularity contest. If you come up first they thing you’re better and so feeding that a little bit, you need to make sure you’re coming up first or towards the top and not only there but you got the right content, you’re directing them, you have the right web page with the right user functionality and ease of use.
Online is a big part of your business. You need to be an online presence nowadays no matter what business you’re in because people are going to check you out. They want to see your website. They’re going to do Google searches to find companies that are in their face whether that’s from their phone or from their PC. Online is big. And then once you’ve kind of maximized that, I would say radio. Radio has been good to me for at least my business. Those are the two best sources of business for kind of all encompassing.
JT: Can you tell me any tips or advice on radio ads? We don’t hear a lot about getting good radio ads and what the best things that work for people. So do you happen to know any?
BH: Yeah, I wrote a blog on writing a great radio ad. Perfect question for you then. I had a radio show as you know and I had sponsors that paid to be on my radio show and they often asked me, “How do I write a good radio spot?” I had to do some research on it and I kind of figured it out. You have to have a call to action of course. I like to repeat contact information three times but I also like to give them two variations of contact information. So if I’m going to use a website twice and a phone number once or a phone number twice and a website once, but I always end it with call Renters Warehouse phone number, phone number, website or call Renters Warehouse phone number, website, website.
Hit it with them three times. Don’t rush it. Clearly speak. Don’t try to do too many messages in one. You got to pick one message per ad. If you want to try and get renters and property owners at the same time in a radio ad, it’s not going to work. But if you focus your ad on renters and you focus your ad on property owners, that’s going to be beneficial to you. Let me see if I can find some other tips here.
JT: Great and you can definitely send me that link too and I can post it in the show notes so that way people can take a look at the whole article too.
BH: Yeah, okay. I’m trying to think here where, I posted it on, I have a couple blogs. Blogging is key. Blogging adds credibility in the space out there. Telling people what you know again gets back to the whole anytime somebody will listen to you, see if they’re interested in hearing what you have to say. I write a lot about real estate, a lot about current events, personal branding and I do personal branding to compliment what I write about because I want to be a credible source. When I write an ad on ten basic rules every judge should know about evictions in Minnesota, how do you know to believe what I’ve told you are the ten rules you should know?
So mixing that with some personal credibility boosters and some personal PR is important. We seek out company accolades and awards. We seek out personal accolades and awards both for my staff and myself to increase our level of credibility and professionalness that when we speak, people say that somebody has validated us as an expert in the industry and that’s important.
JT: So how do you get ROI on radio ads or blogging? You know what I mean? You take a lot of time maybe writing an article and having a blog but how do you really know whether or not you’re getting that return on investment?
BH: Tracking. You got to track your ad dollars. Return on investment is important. Knowing the lifetime value of a customer is important. We know that a customer, once they become a Renters Warehouse client, that customer is worth $8,802 and that’s the lifetime value in what we believe the revenue can be generated from that customer. So knowing that is a good start so you know how much you can spend on customer acquisition and customer acquisition costs, lead closing costs is all important.
It’s something that comes down the line but having something set up in the beginning and starting tracking those things, asking the right questions is important. So we ask every customer before they get off the phone or email where they heard about us. Then we say we got 20 leads from this radio spot. We know that we paid $4,000 that month for that radio spot and based on the lifetime value, we earned $100,000 off $4,000. That’s a great return on investment.
Real estate is a different way. If you’re selling a bag of coffee online, you know that that customer is going to buy a $10 cup of coffee or a $10 bag of coffee and it cost you a $1 click to get them through there or a $50 radio ad to buy that $1 coffee. There was a great study out there about, I think it was pets.com. They were spending like $80 to bring in a customer to the website but the customer is only spending $30 a year on their website. So they couldn’t justify it and you need to know those things and you need to be able to put a band aid on that cut as soon as possible to avoid those running loose.
I’ve known a lot of bad radio advertisements. I’ve known a lot of bad online advertisements. I’ve known a lot of bad SEO vendors. You’ve got to know what you want before you go out and try to get what you want. Sometimes you have to step out your comfort zone. I didn’t know much about SEO when I first started getting into it and I was getting taken advantage of by SEO people. So I became a student of the SEO and now I know how to talk to them when I want and how I can track it. I know have a system that works for me.
So when you venture into areas that are unknown, do some research and then ask yourself how will I be able to track the performance? What are my measurables here and if you just start with measurables I think you have phase one and tracking your radio.
JT: When you’re first starting though or when you’re a little bit early and you’re just starting testing and you’re getting all these numbers, how do we know whether or not they’re working? So say you do a radio spot and you’re like well I’m not sure what I should be getting when this radio spot, yeah I’m losing money, well do I try radio again anyway and maybe it’s the ad or how do you go about navigating that?
BH: So there’s something you need to keep in mind – cash on cash return and then the other thing is experience. So experience tells me that radio sometimes takes one, two, three, four months before it starts to really work. People have to hear your ad a lot and then they start to think about it. There’s a saying radio that they have to hear your ad eight times before they really have heard it. So knowing that you have to hit that customer eight times before they really heard your ad is important to know. It’s something that comes with experience.
Then evaluating whether or not that ad is worth your time and worth your money, especially if you’re like me and you’re on a budget, cash on cash return is important. If you can make more money by placing that cash somewhere else, then you should do it. If in fact this is one of your better performing cash on cash returns however maybe it’s only one or two or three or four percent, well if that’s your best performing cash on cash return then that’s okay, right, until something better comes along.
For example, a lot of businesses don’t buy their own office building because the amount of cash it takes to buy their own office space and the return they get on that real estate versus the amount of cash it would take to buy new advertising or expand their business or buy new office equipment so they can do more work, often times has a higher cash on cash return. So evaluating those opportunities as to what is your best cash on cash return is important. I do that on a daily basis with my advertisements, with real estate and in general.
JT: Okay. So when you’re first starting, do you recommend sort of not doing the ADD thing and trying a bunch of different marketing out at once or do you say one and try and get that going pretty well?
BH: Stay true to your core focus. When you started, you should have had a marketing advertising plan. Pick the number one you want to try and you really have to give it your full effort. That’s not to say you can’t have one or two or three things but don’t have too many irons in the fire.
You’re not going to be able to track how well it’s going plus if you’re a new business, you don’t want too much business coming in that you can’t service. That’s that good/bad problem thing. If you can’t service the amount of clients calling you, then you’re in bad shape. So you need to kind of slowly work your way up. Remember, ASAP is poisonous. Don’t try and grow too fast. Grow as fast as you can manage and don’t say to yourself I’ll just hire somebody or I’ll just ramp it up. That good/bad problem can be the death of your business.
I’ve seen a lot of people who have made the phones ring but couldn’t respond and then got all kinds of negative reviews and never been able to rebound from it. Often times, we find ourselves in growth patterns that are so fast and they come on so sudden, that we have to kind of go all hands on deck and go all weekend to keep up with the business in order to keep up with it. Managed growth is important. Don’t grow too fast for what you can and can’t manage. Sometimes we shut down our advertising completely. We’ll turn it all off just so we can go back and service the amount of people who have called in and to get ahead of the game because we hate being behind the eight ball.
JT: Well you talked a lot about customer retention so what are some of the customer retention strategies that you guys are employing that are working for you?
BH: We’re really focusing on educating our customer. We don’t want him to think they can’t do this without us. It’s that they see value in having us. So one of the big customer retention pieces we’re doing is making sure that they know what we know and then advising them so they can become better at their business and their business happens to be income property real estate. So we try to teach them tips on how to increase their cash flow, how to make their property rent for more money. Ten things you should know about evictions.
Even though they’re not going to be handling that stuff, we want to make them a smarter customer. A smarter customer is easier to work with and I typically have better results and if we’re educating them, they see value in that from us and they want to stay. We reward loyalty long-term customers with freebies, parties, celebrations, thank yous. We also do a lot of events for our customers. We’re going to have a fishing tournament, an ice fishing tournament true Minnesota style ice fishing tournament.
We give out a lot of rewards for being renter for the month, property owner of the month. We invite them on our radio show. We offer a lot of premium services for clients. Our whole customer retention is about building and enhancing the value proposition you get when you work with Renters Warehouse. We want to continue to be the no brainer choice for you when you are choosing a property manager. We’re not going to prevent you from doing something on your own, we just want to know that when you decide that it’s not something you want to do on your own that you know that the best choice deep down in your heart is to go with Renters Warehouse and you have a couple reasons why.
So we try to arm our customers with reasons why they shouldn’t leave us and why they see value and why we’re good at what we do and why they should see value in what we do. Not everybody, they’ll pay you money and they have expectations and assumptions they’ve made. Making sure that everybody has the same expectations and assumptions is important and that is a form of customer retention, I think.
JT: All that is really invaluable because I know business owners that don’t want to educate their customer because they’re so afraid well they’ll do it themselves and they won’t need me anymore.
BH: They’ve already decided that. When they came to you, they already decided on that. Whether or not they continue to decide on that is if you can prove to them that you’re worth it and that it’s not worth their time and you’re better suited to do the job and that the value is there. If you tried to replace, you get a staff of 26 people here for $79.00 a month.
BH: Try and do that on your own. Even if you spend one or two or three hours a month on your property, which you’re going to do more, you’re going to be wishing you paid $79.00 a month and had my staff of 26 to do it because you know that we eat, sleep and breath this and that we have a great value and that we’re going to continue to make you smarter at real estate so that we can work together better.
JT: See, that sounds like a no brainer. Excellent. So what are some resources that you turn to. I know you mentioned Rework as one book. Is there any books or tools that have really helped you?
BH: Inbound Marketing, fellow MIT guy. Smart guy. His company Hub Spot. Very expensive analytics company but world class. If you could afford it they’re well worth it. Inbound Marketing is a book he wrote. Rework, I love the way those guys think. I mean they think like a young entrepreneur and I hate when I say this and I haven’t figured out a way to say it better, but the customer isn’t always right and sometimes they need to know that they’re wrong in order to become right.
They, in my business, they’re hiring me to be an expert at what I do. If they were the expert, they’d be doing it. So sometimes you have to rightfully and respectfully show your expertise and your experience and sometimes that comes in the form of a call it a correction, bad choice of words, but call it a correction. The customer isn’t always right. Their urgency isn’t always yours. It’s just, that book Rework really takes a new look at the way businesses are being run and the old model that the customer is always right is a quick way for businesses to be taken advantage of.
Consumers are smart and if they can see an angle to get one up on you, they will and you need to make sure that you’re protecting your business as much as you’re protecting your consumers and just by running an honest, ethical, organized, responsible business, you’re doing them that service but don’t let yourself be taken advantage of because of the old mantra that the customer is always right. If the customer is wrong, try and explain to them where you’re coming from.
I really love that book Rework. I hate reading business books. They can never hold my attention and there has only been two books that I have ever read and I have read a lot of books and those two books – Inbound Marketing and Rework – by far are the, I’m going to send my book in. I just finished it about a month ago and I can’t wait to send it to the guys and have them autograph it because I’m going to keep that book forever and I have been passing it around. I love that book because everybody wonders about my mentality and the way I run my business isn’t always, well I live off the customer isn’t always right but we want to try and help them to be right by educating them.
We don’t want to be right, we just don’t want to be wrong and we don’t want them and we think it’s wrong to reward bad behavior. If somebody is lying to you and you know it, that’s not the time to be like well, we better just roll over and let you take advantage. That’s not how it works. You have to stand up for yourself, be honest and ethical. It actually sends the wrong message if you roll over that you really didn’t have the tools or the organization necessary to combat their claim that you were wrong or that you did this incorrectly, etc.
But people haven’t quite understood my business management philosophy and Rework I mean I feel like I wrote the book. They’re inside my head. They think the way I think and I really respect that book, I like it a lot.
JT: Those guys are great. Just so everybody knows too, I’m sure a lot of you have already heard it but they actually started Base Camp which is that huge project management software which is wonderful also.
BH: Yes, their company is called 37 Signals and they didn’t build the biggest, baddest CRN ever. They just built a CRN that works for everybody and they turned down option. People say I wish this could do this and they’re like well that’s not what we do. This is what we do and if you don’t like this then perhaps there’s a different company or system for you. But we want to be the best at having a simple, easy to use CRN. We don’t want to have the most expansive, awesome, most complicated CRN, say like Sales Force. We want to have this CRN and those that like it, like it and if you don’t like it well we’re going to continue to make this one better but we’re not going to change the way we do things and I really like their approach. I mean I just really like that company. I’d like to have lunch with those guys one day and pick their brain.
JT: I have a friend that knows them. Maybe we can get everybody together. That’s excellent.
BH: Man, I’d be there in a minute.
JT: Great. So for the last question for you, I could talk to you for much longer but I know you’re a busy guy – what’s one action everyone can take this week to move them forward towards their goal of a million.
BH: You got to advertise to get the business and advertising isn’t just financial. You don’t have to take out a billboard or SEO campaign or radio campaign. You just got to tell people about what you do and why they should, you got to get everybody that will listen to your elevator pitch. Think about this, the guys and gals that struggle finding a boyfriend or girlfriend. Usually it’s because they’re too shy. So I give my friends a lot of headaches about it, my super single friends. I tell them the reason you’re still super single is because you don’t advertise.
Nobody knows you’re single. You don’t talk to anybody. They don’t know you’re available. They don’t know you’re looking and that’s why you don’t have any business, aka why you don’t have a girlfriend or boyfriend. The same can be applied to business. If nobody knows you exist, you’re never going to get any business. So you got to advertise to get the business. Take that for what it means to you. I look at it as you got to get everything you could do. When I was in business, when I first started, I would go to every free classified, every free business profile page. I created hundreds of free business profile pages. I wanted to anywhere I could be for free on a budget.
If you go online and you search Renters Warehouse, I’m sure you’ll find a thousand pages that I created years and years ago that are still there but they’re there on the internet and at one point, those used to be very helpful but it helped get the message out, creates link backs to your website. It gets people knowing who you are and what you do but at the end of the day, if nobody knows you exist, you’re not going to do very well so you got to get the word out and I call it advertising. Call it what you like but advertise to get the business.
JT: Absolutely. Coming from the guy who grew 2,000 percent last year. That’s perfect, perfect advice. Where can we find you more online and find out more about your companies?
BH: So three companies. Each of them all as unique as the others. Renterswarehouse.com is our Minnesota property management brokerage. We also have offices in Denver and Phoenix. If you’re interested in franchise opportunities it’s franchisepropertymanagement.com. That’s how you can find out how you can own your own Renters Warehouse. If you’re in Minnesota and you want to find out about our flat fee services, real estate services, you can go to gofsbo.com. For our real estate company it’s pink-blue.com and if you just like reading blogs like I do, check me out on my blog brentonhaydenonrealestate.com.
JT: Great. What we’ll do is we’ll link up to all those in the show notes so everyone can take a look. Thank you so much for coming on today, Brenton. We really appreciate it.
BH: It’s truly my pleasure and it was nice chatting with you, Jaime.
Just to note, you can download the Top 10 tips from these millionaire interviews on the blog.
Thanks for listening. You can find out more great information like this on eventualmillionaire.com.