You'd be surprised by how many companies inefficiently employ tech.
Kelli Segretto, property management veteran and founder of K Segretto Consulting, has helped many PMCs optimize their tech stacks. She joins Andrew Smallwood to cover the intricacies of a well-managed and optimized tech stack. Don't miss her secrets to finding the tech stack sweet spot.
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Season 4 Episode 20 features Kelli Segretto
The Triple Win Property Management podcast is produced and distributed by Second Nature
Kelli Segretto
Yeah. I think it's important to operate out of a plan. And your plan of what technology you need to infuse in your business should be driven off of what your company goals are and what your company issues are. Where do you have hurdles and struggles and bottlenecks and issues that you can solve with technology? And what are your goals for your organization? And are there technologies that will help you to achieve those goals?
Andrew Smallwood
Hello, professional property managers, Andrew Smallwood here, your host of the Triple-Win podcast. And I am joined by my friend and industry professional, Kelli Segretto, and for those of you who don't know Kelli, some of you may have had interactions or experiences when she was really running the ship at PMI- Property Management, Inc. You know, she's since branched out, developed her own, consulting business. And we've heard from a number of mutual clients what a great experience they have working with Kelli and what impact she’s has. And I can tell you, Second Nature has tapped Kelli multiple times to give her insight on products and things like that that we're building for the industry. We really respect her opinion and her generosity. You know, what she shares for this industry. And, Kelli, I just want to say, before you get started, thank you for everything you have done and for being with us today to have this conversation. I always look forward to this and really appreciate you being here.
Kelli Segretto
Thanks for having me. And it's my pleasure to be able to chat with you.
Andrew Smallwood
Awesome. All right, so, Kelli, we're going to dive right in. We're going to get right into it. I'd love to hear, you know, you're talking to property managers on a weekly basis, and, you know, I've got my bias and what I'm hearing in conversations, but I'd love to hear from your perspective, you know, what are you hearing that's important for professional property managers to be thinking about right now? What should we be paying attention to or noticing? What have you got your attention on? What are you focused on right now?
Kelli Segretto
That's a great question. I think a lot of what I'm finding people engage with me about is finding more efficiency in their businesses. It's a lot of, leveraging technology and looking for labor efficiencies and finding ways to just elevate the experiences that they're creating for their owners and their residents.
Andrew Smallwood
Yeah. And so with creating efficiency, you said two things there. One is how do we get more efficient. And then another is talking about the owner and resident experience. And I'm curious, let's kind of dive into the efficiency part first. When somebody thinks about approaching, what are the couple places you kind of start with them? Hey, if I'm looking to go down this path and get more efficient or more fit, you know, kind of business, what are coming to the big opportunities somebody would start with there?
Kelli Segretto
Yeah, I'd say there's really three different components that we're looking at when we're looking at the efficiency of how you're operating today, we're typically looking at the technologies that you're utilizing and how you're leveraging those technologies. We're looking at the people that you have in your organization. Do you have the right structure? Do you have the right people in the right seats? And we're looking at process. We're looking at, do you have a dialog process. Do you have consistencies in how you do business? And are those processes themselves created in a way that is efficient and able to be followed by all?
Andrew Smallwood
So let's dig into the tech part first. I think I heard you sharing a stat with me that kind of surprised me of the number of companies that have entered the space offering technology to property managers, I don't remember the specific number. Maybe you can help us with that, but what are you kind of seeing from that front, and what kind of property managers face or propose? Where does it kind of relate to building out their tech stack?
Kelli Segretto
Yeah, the statistic that I saw as recently of this as this week was that there are 300 to 500 new prop-tech companies that have entered this space each year for the last five years. And so we're seeing a huge influx of different available technologies, sometimes competing to where they're covering kind of the same things. But people are trying to innovate in this space and create new ways to either find efficiency or add products or increase our ability to to provide services to our owners and our residents. And it's really interesting to see how those are coming into play. I think the effect that that has on property managers is I see some property managers falling into this analysis paralysis. There are too many different companies coming on board to keep track of what opportunities there are. And then do those technologies play nice with others? Do they integrate into their business, or are they going to add additional steps to their processes that are creating, you know, it may help with efficiency in one area, but is it pulling from efficiency and another? And so it's this game of tug of war with these different prop-tech companies that we're seeing come onto the market and how they play into the rest of our technology stocks.
Andrew Smallwood
Yeah, I mean, I think it's safe to say people probably don't have room for 300 to 500 different, software in their IT budget or, yeah, the tech stack. And so, what advice do you give to folks who are thinking about, okay, like let's say if we had no constraints here, Kelli, for just a say, like let's say actually I had no software whatsoever and I could start fresh. Now, I know not everybody's in that position, but coming at it from that. Like, what advice would you give to people thinking about building their tech stack over time and how they would learn what to focus on or prioritize and make sure that they're getting the full benefit of that and not just using 30% of it, right, or getting only half of the value that they could be getting out of it.
Kelli Segretto
Yeah, I think it's important to operate out of a plan, and your plan of what technology you need to infuse in your business should be driven off of what your company goals are and what your company issues are. Where do you have hurdles and struggles and bottlenecks and issues that you can solve with technology? And what are your goals for your organization? And are there technologies that will help you to achieve those goals? We should never add technology to a business for our technology sake. That's not going to help improve you. It's not going to be that magic bullet that helps you get to that next level. If anything, that whole process of developing software for your company, customizing that software, getting the buy-in of your team, and then going through an implementation is very cumbersome on a property manager schedule that it is already very, very stacked. And so you have to be really smart with the technologies you choose to make sure they're going to have a beneficial impact. But I like for people to actually think, okay, what is the universe of technology I want to create? What does that tech stack look like? What property management software am I running if I'm running XYZ? The property management software, what does that mean for my options, and how those things are going to integrate and play nice with each other? And so yeah, there's a lot of different trade-offs and a lot of different components. You have to be thinking about it. But if you operate from a holistic plan, then you can start to step in and say, okay, this is the one that's going to be most beneficial. We're implementing this one first or when we get to this dollar amount in revenue, that's when it's going to make sense to then add this next technology. You have to be strategic in the way that you implement technology in your business. Otherwise, it will overwhelm. And that's shocking, of why we get this new technology is fantastic. But if you can't implement them, if you try to do too much, you end up just creating less efficiency instead of more.
Andrew Smallwood
What's something that you feel like you see people adopt too quickly, or they haven't done the work or the planning they need to really get the most out of it? Is there something that you see as like a common misstep or pitfall?
Kelli Segretto
Yes, all of it. I see people who get so excited about the idea of technology, that they don't stop to think what it's actually going to mean to implement, to customize, you know, give you an example, process software. I am a huge proponent of digital processes because they do give so much to organizations that I consider myself not only a property management consultant, but I'll say process solutions consultant. It's a big part of what I do. However, if you grab a product off the shelf and expect that you're going to be able to launch that next week, that's not going to happen. Being able to build a process takes planning, and it takes first putting it all out on paper, and then you can build it in the process. And then you need to train the team and then you need to get buy-in and then you need to, you know, there's so many steps. It is a deep, multifaceted process just to launch that new tool. So it can be overwhelming if you don't have the right structure and the right discipline around creating those steps that you need to to get it off the ground.
Andrew Smallwood
And so maybe we can use this as just an example. And you were talking about, hey, starting with a goal or starting with a, you know, an issue, right, that is a top priority for your company. Right. And really starting there. And so, you know, what might it look like for a company to have a well-defined goal or a well-defined issue or problem where then that would connect to, okay, I need to take steps to document my policies and processes and things like that on paper. And then I'm ready to adopt this tool. Right. Or make this choice about a tool. Can you kind of just bring that to life through kind of an example, either one you've seen or one we could come up with here?
Kelli Segretto
Sure. Let's go with a particular issue in an organization, let's say that your maintenance turnovers are taking too long. And when your maintenance turnovers are taking too long, you have higher vacancy loss. Your owners are unhappy. Your business is unhappy because it affects your profitability. There are a lot of issues that derive from your processes taking too long. So the solution that an organization put into place that was dealing with this issue was they created their digital process for their make ready process, and they went through and they structured all the steps that needed to happen, and the people that needed to be involved in that timing so that they could be more proactive in creating an opportunity for that process. When they started, the process was taking on average 30 to 45 days. So their process and their goal was to get it down to 10 to 15 days. And so as they went through this process of refining when they do different things, they're like, okay, well, one thing we're doing right now is we're waiting until that property is vacant to get eyes in the property, to decide what the scope of their turnover is going to be and what vendors we need to hire. Well, when they started documenting their process and really setting goals around shortening that process up, one of the conclusions they had is that they needed to do a pre-evaluation. They needed to build that into their technology and their tools that they're prompted to do that pre-evaluation. Once they received notice, once they implemented that they were able to shorten their their turnover time to about 20 to 25 days. Initially just with that one change. And so then you continue to refine that process. And if you have it in a digital tool, that's being followed by all, when you make those small adjustments and those refinements, you continue to see value in what you're doing, and you can see where those process improvements are actually impacting the bottom line and where they're impacting your efficiency and where they're pushing you towards your goals. And so that's a place where technology is really beneficial and can help not only establish what your goals can be but also track. When you're making my new little tiny minor changes, what the impact of those changes is overall?
Andrew Smallwood
Well, yeah. No thanks for thanks for walking through that. And you know, like that's a good example. I think Kelli, when I think, a lot of the conversations I see and, you know, we just had profit coach Danny Craig on talking about the operational benchmarks and which I know you're, you're close to and involved with as well. And I think it's a really great thing that our industry is starting to say, hey, we're actually going to standardize some definitions, right, of what these things are, and we're going to set some baselines of here's like, here's what's good. And then start to compete against those and do exactly running through the process you were just talking about of where are our opportunities to move the needle. Right. And drive this down. And a lot of those are focused on how do we get more efficient. A lot of it is about like, how do we drive more speed right through the process effectively without sacrificing quality. Right. Too much. I am curious, you also talked about owner experience and resident experience, and you also talked about, I think you have a message coming up at Navajo National that you're preparing for on this. And I'm wondering if you can pull back the curtain a little bit for us and say, okay, is that a different side of the coin here, or is there another way to think about this? You know, or how should people think about, okay, as I'm creating this efficiency, you know, what does that enable me to do or allow me to do? Or what do I do next? As I think about that.
Kelli Segretto
Great question, yes, I do have more from National. It's really what we're talking about is, is reducing your churn in your business by creating stellar customer and client experiences. And so it's something that's been really top of mind for me for a few months now specifically. But I think it's important to make sure that when we're creating efficiency, we're doing it for the right reasons. Yes, there's a lot that we can automate now, and we can infuse technology and we can make our businesses very robotic, but then we lose the point of what these businesses are. Real estate by nature and property management by nature is a customer service business. We are here to make human interactions and to create those connections and those collaborations with our property owners and with our residents. And so if you step too far into technology, we start to lose that balance a little bit. You start to get disconnected. You start to have residents on your property that you've never met face to face. You start to have owners that don't know you personally, and so you lose that connection. And those connections are what really tie people to our businesses. There are 327,000 property management companies in our country right now. What is keeping them with ours? What's keeping your owners using you? What's keeping your residents renting from you? And so creating those experiences is really what ties people back to our business, not our industry, but our business and the need for the services that we provide. And so as we're kind of looking at what are those efficiencies we can create, what I don't want to see people do is say, hey, we can create all these efficiencies now. So we fired all of our staff and we're just rolling with the efficiencies. Rather, I'd like people to start thinking about as I create these efficiencies, it frees my people up to do what people do best, which is create those interactions and create experiences go the extra mile, and become more trusted advisors for our owners and be more of, you know, a help and a friendly face with our residents. We have to start looking at our industry as a place for us to create experiences rather than just, you know, we're we're managing assets. We're doing so much more than that. And so making sure that we're looking for ways to create those experiences, as we have these and these efficiencies infused into our businesses will set us apart and keep us relevant in this industry as the industry continues to change.
Andrew Smallwood
You know, Kelli, I think this is such an interesting topic and one that I just imagine friends of ours like, if we were to ask them the same question about what they think the winning experience is like, we might hear different answers right from different people about this. And it's one where people can have an opinion and put that opinion out in the market, right? Operationalize it and see, see what happens. And so I'm curious to dig into like a couple of specific examples here of this where you see opportunity and value for, you know, intentionally driving a type of customer experience and how that would be enabled and creating, you know, creating value, the mutually beneficial situation for the customer and the property management company. And so like, maybe we can start on the owner side of an example, like 1 or 2 examples of this where, where do you see 1 or 2 of the like biggest opportunity to improve the experience for property owners?
Kelli Segretto
I think we have to get out of our mentality of reactive management and become more proactive, reactive, become more proactive advisors for our owners. And so doing things like being able to have an annual review where you're sitting down and you're going over the metrics of their asset with them, you're showing them what last year's maintenance costs were. You're creating an action plan for next year for capital expenditures and things that are coming up on the horizon where you're evaluating, hey, on average, our residents stay about this amount of time so we can expect a vacancy next year. This is what it's going to do for the bottom line. This is what we'd like to do with rent increases. In order to be able to counter that, you're becoming more of a strategic advisor for your owner clients and allowing them to get maximum value out of their assets under your care. So having those proactive opportunities to sit down with the owners and take the time to really analyze their portfolio is extremely valuable. Also, things like preventative maintenance schedules, instead of just doing reactive services for them, offering preventative maintenance or seasonal maintenance or, you know, capital expense improvements when you're doing those evaluations of their home. It's not just the owner feeling like you're trying to take money from them by adding this additional service that isn't benefiting them at all, you're actually going through and saying, hey, that water heater was 14 years old. We're looking at probably replacement. It's going to be less expensive to replace it in a planned and scheduled way, rather than in an emergency situation. So we'd recommend that we go ahead and do that. Don't have the funds? Well, we have financing options available for you, or we can start a reserve for you so that we can capture those funds. We can plan to change this out in the next six months. So you're being more strategic, you're being more proactive, you're being more informative, and you're really working to protect their asset and help them maximize their financial capabilities for that property.
Andrew Smallwood
Yeah, yeah. I think people can appreciate, you know, the cost of replacing an HVAC unit, on a turn in October versus doing it in the middle of peak season in July, with, the resident in place right? And the stress that puts, you know, on the team. Right. Additionally during that situation. That's right. Yeah. So that's a good example. So I'm just imagining again time this back to, okay, I've created some efficiency and freed our team up. And as opposed to just saying, hey, I can actually get the same amount of work I was getting done across four team members now with three team members. And so let me get that done. You know, I think you gave a good example of there of like, hey, now we can actually get annual reviews done. Not just for 20% of our clients, but for 80% of our clients. And so let's do that and let's hear the impact that we want to see from that as we're educating and being more proactive and driving a different type of relationship with our company across this. And let's see how that impacts our owner churn. Let's see how that impacts these other things that we expect to get out of this. And then being able to track that and continue down that path. So thank you for that example. I'm curious. You know, we talked about the owner experience, and the resident experience, which is near and dear to our Purple Hearts over here at Second Nature. What are a couple of opportunities you see on the resident experience side that really excite you, that you think you know are great, great opportunities for property managers to be thinking about today?
Kelli Segretto
I think we're thinking about some of them. I think that there are still a lot of opportunities that we can leverage, I see our residents as a valuable piece to the puzzle. I see them as potential homebuyers. I see them as the clients that we should really be looking at as providing educational opportunities and additional support. So, for example, I had a property manager that decided to have quarterly financial planning sessions. So they partnered with a financial planner. The financial planner came into their office, they invited all of their residents and they would do training sessions. How do you prepare your finances to be able to buy a home in the future? How do you properly budget? How do you look at, the potential of what your rent is costing you how do you stack in all of the other things, and the goals and the plans that you want to have for your life? And so I think having valuable services like credit reporting and financial planning and, those types of things is really valuable. I also would love to see us leverage strategic partnerships in a different way. I think the times we have BNI groups that we're part of where we're talking to people that are in the insurance industry or in the title companies or, these different adjacent industries. And we're talking to them is like, hey, you could be a funnel for me. If you have people who own property, send them my way. But what if we leverage those strategic partnerships to say we want to have a community event? We want to do an annual resident appreciation event. We're going to have a barbecue. And why don't our strategic partners come as well? They can sponsor the event, just like we have sponsorships that are local events or national events, and they can have a booth that has their insurance offerings, or they can have a boost that has these other valuable services for the residents to be able to explore while they're there. There are a lot of different things that we can infuse that will benefit our residents and help them to continue to kind of work towards their own individual goals as well.
Andrew Smallwood
And yeah, I mean, a common thread. I feel like through both of your answers there is how can we get more proactive about educating right and involving others. Right? Even in this type of case, I was talking to a property manager based out of Orlando just this past week at the Southern States Conference, and over dinner she was talking about how with some residents, she can tell like, oh man, they're delinquent, but they really want to get their stuff together. But they just never got there's never that high school class or there's never that, you know, not everybody has. Right? A place where they learn how to budget our handle, their finances and everything else. And she's like, yeah, I took the time to help and work with her, and we made a plan, etc.. And she got there, she got there and it got me thinking about me. And like, that is great. But the way that it was done is a little less scalable. Right. There are great opportunities, right, to not just in a multifamily community event type of context, but, you know, you can still take the impact of that and say, hey, we can digitize this and start to work to get this out to other residents, even in a scattered site portfolio where this could be having an impact on our customers. But it's hard to do that if you're running around reacting to the last boiler call and everything else. And so again, I'm connecting this to your point of, okay, there are good opportunities to get proactive and work with our customers on the resident owner side here. But efficiency can help help free that up and give us the opportunity to go do it, efficiently. Is there any go-ahead?
Kelli Segretto
Efficiency doesn't just free us up. It's required in creating those efficiencies, having that labor efficiency, having automation in your business, those are requirements that are going to allow us to be more proactive and not as reactive in our businesses. And so as we're looking at being able to offer additional services to our owners and our residents, we have to be able to take those busy work things like creating forms and, form emails and interacting with our other software platforms. Through process software, you can create zaps and you can create power, and automate those flows so that you can create an integration that takes those busy things off your plate. It's those busy things that are the killers of these businesses. So the more that you create those efficiencies, yes, it frees up your time to then create that strategic partnership, foster that strategic partnership, negotiate discounts with local businesses, negotiate opportunities for your subject matter experts to come in and educate your owners and your residents and create those opportunities. But without those efficiencies, this is it's prohibitive. You can't do that in one of these businesses and in how inundated with the day-to-day operations we are without creating those efficiencies first.
Andrew Smallwood
And you know, when I ask you a question, Kelli, because earlier you had mentioned kind of looking at things through three different buckets and one was tech and one was process, and then the other was org design. And I'm just curious, you know, as you're working with folks on, hey, we can adopt this process or process automation or this technology, etc., and we can get this efficiency. You know, there's an aspect to this, there starts to become tasks that technology is doing that before people were doing. Right. And, you know, I think certainly with AI and whatnot, like this is even more kind of on the forefront of people's mind of thinking about what are the kinds of things that technology and particularly artificial intelligence, you know, Gen AI, whatnot, are going to be taking, you know, taking on. And then as we free up, how does that change the potential organizational structure or design or, you know, the roles and whatnot? How are you kind of coaching people through that process? Because if it's a dynamic thing, then how do you work to manage that and think about building your company as a property management business owner?
Kelli Segretto
And that's a great question because these businesses and from the beginning of time, these businesses are ever-changing beasts. They just are. And so one of the things I love about property managers is that we are so adaptive, we are ever-changing. If you look at this industry 20 years ago and ask that same question, gosh, there's no way we could have foreseen that this is where we were going. And so where will we be in five years with AI technology? Where will we be with some of these other tools that are coming into play? It's going to be pretty amazing in in what we have as our capabilities, but it goes back to ownership of tasks when you're looking at how do I define my org chart, how do I set my roles and responsibilities? You're really looking at all of the tasks and roles and responsibilities you have in your organization and debating those out. So as those tasks change and we automate more things, it doesn't mean that now you have nothing for your employees to do. Those roles and responsibilities are just new items on the list. So instead of sending out these templated emails manually, that comes off the list of roles and responsibilities and proactively contacting residents for feedback or whatever it may be gets added to the list. And so it's not that we're just going to be taking away. I think as we infuse better experiences into our businesses, we're adding to that list. What I like to do with my clients is what I consider an ownership exercise, where we actually identify and put an owner to every single responsibility in the organization. And that's how we then decide what role that person has. And that's how we then also look at what KPIs that person should be responsible for. How do we hold them accountable? How do we measure their success? How do we help them improve? How do we identify what training is, is going to be required to help them accelerate to where they need to be? But it all goes down to ownership. Whatever tasks you put on the board, you still have to define ownership of those tasks.
Andrew Smallwood
Yeah. I'm like imagining like an accountability chart of sorts, right? That has, names, etc. assigned to kind of these key processes and areas of ownership in the business and I love what you said also about, you know, KPIs that are being measured. And, hey, technology has a place and we're equipping these people with tools, and the specific tasks they may be operating on a daily basis might be shifting or moving around a little bit. But, you know, the reality is, hey, there's still clear ownership there. And as things are moving and shifting, right, there's more coming in and more they're capable do to increase the level of service of your business, which ties nicely to what you've been talking about. It's a theme throughout. Okay, Kelli, here's where I want to wrap up. I'd love for you to look forward to the next few years. You know what? What excites you most about the professional property management industry?
Kelli Segretto
What excites me most? I am passionate about stellar property management, I just am. I would love to see the industry as a whole elevate the standards of what we're doing and how we're doing it. I would love to see everyone adopt this idea that we can do better, and we should do better. And instead of being the redheaded stepchild of real estate, for us to come into a place to where people are choosing this as a career path, people are choosing this is something they want to be part of, rather than the accidental property managers that we see most of the time. I would love to see us get smarter in how we are operating our businesses, but really, I'm most excited to see property managers transition from reactive property managers to trusted advisors in the industry that will help maximize the experiences that we're creating for residents in housing is such a basic need. It's something that everybody needs, but how your property manager treats you is going to create either friction and drama and chaos in your life, or it's going to be helpful and beneficial and help you to find new success as you grow as a human. And so if we can do that for our residents, help them to do better and be better and have positive experiences, if we can, for our owners to be that trusted advisor, to help them be able to maximize their asset and be able to preserve their asset in a meaningful way, it's helpful for everyone around the board. And so we're we're creating meaningful experiences. We're protecting assets. We're seeing longevity of property instead of the throwaway culture that we're used to. And it's just it's it's exciting to think about the future being more than just reactive, but proactive and meaningful in our interactions and the way that we approach this industry as a whole.
Andrew Smallwood
Well, well, Kelli, I know one reason we always vibe is we share, the same vision and mission of a future of this industry that is increasingly more and more professed, really managed by, you know, by folks obviously listening to the podcast and, and, what we can do to empower and equip those folks to help help forge the path forward to a better future of just more and more excellent stellar property management, I think. What's the word that you put there? So thanks again for joining us today. Thanks again for sharing your thoughts and insights.
Laura Mac & Carol Housel
And that wraps up another episode of the Triple-Win Property Management podcast. Thank you for pressing play. We hope you've gained valuable insights and inspiration.
The Triple-Win Property Management Podcast is proudly produced and distributed by Second Nature, where we believe in a Triple-Win, building winning experiences for your residents, investors and your teams with the only fully managed resident benefits package. Visit SecondNature.com to learn more and talk to an RBP expert in your area. If you have any questions or comments or want to weigh in on the conversation, we'd love to hear from you. Email TripleWin@SecondNature.com. That's TripleWin@SecondNature.com. Stay connected with us beyond the podcast. Visit our website at SecondNature.com to stay updated with upcoming property management events and articles. And don't forget, you can keep the conversation going in the Triple-Win Property Management Facebook group. It's exclusively for property managers. To receive even more valuable insights and updates, subscribe to our newsletter. You can find the link to that and much more in the show notes. On behalf of the Triple-Win community, this is Laura Mac, thanking you for tuning in. And on behalf of Second Nature, this is Carol Housel. Check back soon for another exciting episode. Until then, keep striving for that Triple-Win.