It's a pivotal scene in the movie Pretty Woman.
Julia Roberts and Richard Gere walk into the boutique clothing shop and are treated like royalty. The sales people trip over themselves to serve them.
One man gives her the tie from around his own neck. Another orders pizza.
For me, it's the first thing that comes to mind when I think of the word boutique. But many smaller management companies have taken to using the word to describe themselves. There are plenty of naysayers out there that think this is just a way for a smaller management company to disguise the fact that they're small.
Is a 'boutique management company' just a nicer term for a small property management business, or is it really something special?
What's so special about a boutique management company?
- Boutique is small
Like every small management company, a boutique management companies tends to stay smaller, generally less than 50 employees. However, in the boutique, the size is not incidental, but deliberate. By staying small the boutique management company can remain more agile, with less of the red tape, internal politics and complicated policies and procedures that tend to plague larger companies.
- Boutique is exclusive
In the same way a boutique management company chooses to stay small in employee size, they also choose to stay small in their portfolio. The trick is to maintain the BEST portfolio. (More on that in a minute.)
- Boutique does not compete on price
The boutique management company is offering premium service, which comes at a premium price. Boutique management companies compete on service, quality, and experience, and they charge appropriately for it.
- Boutique does not compromise on quality
To charge a premium, boutiques need to provide the best: over the top customer service, personal attention and creative flourishes that leave a strong impression on community association clients.
- Boutique has great connections
Because a boutique management company is smaller, they don't have the staff that larger management companies have access to. Instead, boutique management companies have to have a great network of premium vendors and service companies. The boutique management company focuses on what they're good at and they farm out what they are not.
- Boutique is highly specialized
Communities are flattered by a manager that truly understands their unique circumstances. A boutique management company understands that and focuses their service on a specific type of client that they truly understand. Examples of specializations might include gated communities or luxury condominiums.
How to transform your management company into a boutique
Your transformation begins with your staff. You may be small, but you must be mighty, and that means hiring extraordinary team members that are highly competent, great communicators, and always ready to go the extra mile for your clients. In other words, you need to hire people who have drunk the boutique kool-aid.
The next phase of your transformation is going to be grooming your client list. This can be the hardest part of adopting the boutique business model. Start by determining how many clients you can comfortably manage while maintaining the highest levels of service; usually between 20 and 50 associations. Next, you'll need to determine what your dream client looks like, and evaluate your current portfolio against your dream client.
Now comes the hard part. You need to fire those clients at the bottom of the list that are least like your dream client. You cannot afford to waste your time catering to difficult clients that take away from the rest of your clients, so when their contract is up, let them know you are not interested in renewing, and then sign a contract with a new community. You should be continually cycling your portfolio each year at contract renewal time until the 20 or so associations you manage are the absolute best clients for you.
The rest is just follow through. Focus on the relieving the pain points your clients are experiencing with the highest levels of quality service and constantly strive to deliver an unparalleled customer experience that helps your clients feel like they are the only ones in your portfolio.
Congratulations! In just a few simple steps you've transformed your management company. Now it's time to go back to those naysayers and tell them the infamous line: "Big Mistake. Big."
Hey, are you thinking of starting your own boutique management company? Check out our newest eBook on how to be your own boss in community association management!