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What Activities Generate You The Most Profit?

Matt Landau

Staff member
Ambassadors
I am currently visiting Godfrey Godfrey in Sun Valley, Idaho where the supply of vacation rental properties is so limited (and the demand for this destination so great) that property owners and managers need to be extra intentional about how they spend their time. To a degree, I think this focus is increasingly playing out across the world.

Every activity falls somewhere on the profit spectrum, but which activities actually generate the most? Which are most directly correlated with your bottom line? For entrepreneurs, not focusing of these activities means money on the table. And so today I’d like to pass the question along to you: what use of your time generates your greatest profit?

+ Uncover hidden profit and cashflow: Shout out to Will Franco Will Franco for sharing this chart in which we can clearly see certain kinds of customers are worth pursuing while others are not. Finding guests who resonate with you and who respect/admire your craft makes small business much more enjoyable.
Image 2021-12-12 at 9.43.02 AM.jpg

+ Getting on the phone with prospective guests: Managing my own rentals, I always believed if I could get a guest on the phone, I could close the booking. A phone call is the chance to let my personality and local knowledge shine. The more surefire way to build trust. And the quickest way to answer all the little questions that invariably pop up. With instant-booking a new normal, any way to secure a phone call gives my conversion rate a boost. (Anyone have any good tips to secure phone numbers from inquiries? The saying goes, "if they provide their phone number, they're permitting you to call.")

+ Crafting and sending email newsletters: The engine or backbone of any small business, a solid email list communicated with regularly in the form of a thoughtful newsletter is a profit-focused activity. Written well, these mailers engage former guests and stimulate repeat and referral bookings. The bigger your list gets with quality contacts, the proportionally more you earn from each blast. (Any tips on highest-producing newsletter strategies please jump in below).
Learning: Here are my lessons from 130 weeks of VRMB newsletters

+ Onboarding new homeowners: For property managers, the strength of your relationship with homeowners is primordial: it’s what gets all the profit waterfalls flowing. Identifying new properties and owners is a high-producing activity and making sure they get into your program in a premium way is an investment that pays for itself year upon year.

+ Forging referral partnerships: All guests to your area spend money on other stuff, whether it’s dining, tours/activities, transfers…etc. Spending the time to identify one or two partner companies, formalizing with them a referral agreement, and receiving that check every month or quarter is a high-profit activity. Nancy Nancy's piece on Upselling is a great read.

+ Creating video: Whether you’re sending each guest inquiry a digital handshake or offering a fun tour around the home, video engages better than text and photos. Video is also probably the cheapest paid ad medium on the web right now, specifically Facebook where you can target those who have visited your website, friends of friends, those who leave in nearby city...etc. And very few (if any) of your competitors are using it.
Note: Get inspired by ROster ROster's thread IDEA SHARING: What's the single most effective marketing idea you've had?

+ Following-up: Spending time reaching back out to those who have shown interest in booking is a high-producing activity. You can automate this process with most property management softwares (see: VRMB's Keystone Awards 2021) The more personalized you can make it, the better. Post departure follow-ups are the icing on the cake that seals the great experience and ushers in future bookings. Put another way, very few vacation rental hosts actually follow-up, which means you'll be the only one doing it in town.

We've only just gotten started...

What are our highest-producing activities?

I am REALLY looking forward to perspectives below...
 
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Hello VRMBers,

Chiming in here. These high-producing activities are commonly referred to as Green Activities (activities that make you money). For what it's worth, I find that terminology helpful in identifying them. The terminology was used at an Infusionsoft conference and it stuck with me. Maybe you will find it helpful too?!
 

Craig

Premium Member
Accelerator
For me it would definitely be onboarding new owners. If I am making $15,000.00 commission a year on a property and I retain the property for ten years that's $150,000.00.
Totally agree, but for me a good referral partner can bring me 10 owners, so 10 x $150K!
 

Jed

Premium Member
Accelerator
Ambassadors
Keystone Retreat
In the most straightforward sense, onboarding new owners is without a doubt the activity that eventually leads to the greatest source of profit for us.

In a slightly more abstract sense - "hunting" is the activity which tends to yield the most profits for me. The "hunt" is specific to each of us. Just as in the posts above, you can see how the different answers bear that out. Terry is focused on direct owner acquisition, which could suggest that is looking for a very specific type of home & owner to add to his inventory. Craig is looking one step up the chain from direct owner acquisition and looking for more sources of direct owner referral relationships, which may mean that he is looking for higher volume of owner acquisitions. CCapalbo is focusing on upselling services and getting more profit out of each reservation, which may indicate that she isn't as focused on growing her inventory as she is about optimizing the use of what she has.

The "hunt" is the search for how to make the most impact in each of our own situations. It is clear that the folks who've responded above have done their hunting for what matters most, and now have zeroed in and are executing that strategy - congratulations to all of you for that. My "hunting" has taken me in different directions at different points in my journey. I've hunted and discovered the need to become licensed, or to set up an LLC, or to find a marketing partner, to create owner acquisition materials, or take the time to have real conversations with prospective owners; all of this paves the way to easier and higher quality owner acquisitions.

The point is, that whenever I've committed to "hunting" for the most impactful thing that I can do in that moment to drive profit (again, for me, it is owner acquisitions,) the result has been a step up in the quality of my results through a clarified plan and focused execution.
 

Matt Landau

Staff member
Ambassadors
The "hunt" is the search for how to make the most impact in each of our own situations.
Wow! I’m suddenly motivated to get up from my thanksgiving dinner table and hunt!

Jed Jed i love this way of framing focus: that if we can lock in on something specific, it’s both the reward and the process of “hunting” that satisfies us. and that is different for all of us! But that removing all other activities and distractions possible Is key. Very very cool way to think of this. Thankful!
 

Crafty

Premium Member
Mile High Hosts
Waste Not...Want Not [not vegan friendly]

Last weekend, I smoked an awesome Texas Brisket and some yummy Carolina Port Butts....ribs too.

Over the years, I've learned how to trim my meats perfectly to get the best end result after an 18 to 20 hour "cook".

The trimming process...if done correctly...creates quite a bit of excess that would otherwise go to waste...not at Crafty's.

I invested in a meat grinder and sausage stuffer...and make some of the most delicious ground brisket burgers and spicy Italian & German sausages...and even render the fats for use in sauces and seasonings.

Our little island had saying amongst VR Owners..."You have 100 days to make your money".

B.S.

When considering an activity that generates the most profit...well, obviously 4th of July, Memorial Day, Labor Day, etc...are the big cash cows...but why leave 265 days of rentals on the cutting room floor.

My laser focused email campaigns (not newsletters) and Crafty's Coconuts Club were hugely more profitable in the long run....and built great brand loyalty.

My competitors averaged about 40% occupancy in the off season...while we ran 90%.

I could could close with a cheap joke about watching law and sausage being made....but let's just go with the old "waste not - want not".
 

TeenaNH

Premium Member
Ambassadors
Currently, I am receiving over 200 emails a day about Four Seasons Lodge. I have 1 venue and do not have listings on any booking sites.

Sadly, I had to put my email on email responders because I almost spun out of control crafting a unique response to this many inquiries.

The GREAT part is that I committed myself to phone every potential guest and "chat it up". Those that know me, know I can talk the bumper off a Volkswagen. :ROFLMAO:

Chatting it up has served a few purposes in my life:
  1. I am socialization deprived. I'm the gal that will drop everything to meet a friend for a hike, beer, dinner, or just chat. Since COVID and my hubby being on chemo, I have become a Covid freak and only see people once a week at a distanced fire at my house. Chatting with potential guests has helped fill the void.
  2. Although the response to my canned email responses is down about 75% from my unique responses, my bookings are UP.
  3. I have picked up a few marketing clients that own vacation rentals.
  4. I have had a slew of folks admit that they have been following me for many years and had no idea that one group rented my entire lodge.
  5. A few folks assumed my lodge was a timeshare.
  6. I had many heartwarming chats where overstressed Mom's started crying because they are so stressed. Remote learning, no socialization, and reduced incomes are really affecting people. I've used the opportunity to offer emotional support by suggesting they think outside of the box while doing remote learning. You see, I'm in my mid-sixties and when I homeschooled, it was called quitting school. My son is a second-generation homeschooler. I am a free thinker a little left of center! I suggest all kinds of fun and free ways to make learning fun and interactive. Sitting in front of a computer is NOT interactive. OF COURSE, at some point during the call, I shift the conversation to coming to North Conway and Four Seasons Lodge with a group of homeschoolers in their "bubble" and I'll give them a GREAT rate midweek. Winning!!
Email list - I have over 17,000 folks on my email list and email them once a week. I typically get 5-7 unsubscribes, occasionally 1 SPAM, and I delete the 10 or so bounces.

What I have found is that my peeps want to be uplifted during these times. They do not want a hard sell!

I'm a great storyteller (remember that Volkwagen bumper thingy?) so that's what I've been doing. They have been pretty long-winded and personal. I even cried writing one of them.

Between the two changes I've made to my marketing (phone calls/storytelling emails), I have saved my bottom line this year plus satisfied my need for human interaction.

Hope you can find what fills you...
 

Matt Landau

Staff member
Ambassadors
TeenaNH TeenaNH how much I love this! The "hedgehog" concept suggests we should only focus on the thing we're best at (in the marketplace), enjoy the most, and can generate money. Your hedgehog is chatting it up! While I wouldn't have been able to put a finger on it at the time, I would say this was my hedgehog activity while running my vacation rentals too -- thank you for sharing!
 
For me, it would be following up and upselling services such as meal plans and drinks packages.
I just was thinking about making this new uptick in virtual teaching to see what I could use for guest perks or add ons. I was stuck on the idea of a virtual wine tasting Or local beer tasting. I would be sure the wines or beers are there when they arrive. I would schedule a person to lead the tasting over zoom and then they could purchase add ons like a cheese platter or snacks or a full meal. I would use a local party planner to put it together and take a percentage.
 

Robin

Premium Member
Keystone Retreat
Hiring a great team (which takes time), explaining our mission and vision and culture, and then trusting them to use their skills to work as a team to achieve the mission.

So, focusing on culture whenever possible, is my answer.
 
Hiring a great team (which takes time), explaining our mission and vision and culture, and then trusting them to use their skills to work as a team to achieve the mission.

So, focusing on culture whenever possible, is my answer.
That has been my biggest challenge over the years! It's still an area where I have a tremendous opportunity to grow. Would you mind sharing a couple of key activities that make that process successful for you?
 
For me it would definitely be onboarding new owners. If I am making $15,000.00 commission a year on a property and I retain the property for ten years that's $150,000.00.
I'm in the wrong business! Not really, I love what I do. But seriously, what's one of the key drivers in producing that result? Is that process a manual step, template, or automated in, for example, a CRM?
 
Totally agree, but for me a good referral partner can bring me 10 owners, so 10 x $150K!
Learning the ropes here, Craig. Over the years, I've whittled referral-getting down to three KPIs: (1) Look presentable, (2) Be punctual, (3) Do what you say. Somewhat ironic but the results are surprising when tracked. The application of these principles for vacation rental owners, I'm sure is second nature. For property managers with a team, maybe tracking them has merit.. maybe not?!

Oh and "Ask them..ask them for referrals!" For example, "Do you know anyone who could benefit from _________________? One strategy to implement this is to mail a $25 gas card to them, ask the question, and include a return envelope. You could ask for a name and email address, or be bold and ask for a phone number as well.

What are your thoughts? What are some of your best practices for cultivating referral partners?
 
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Learning the ropes here, Craig. Over the years, I've whittled referral-getting down to three KPIs: (1) Look presentable, (2) Be punctual, (3) Do what you say. Somewhat ironic but the results are surprising when tracked. The application of these principles for vacation rental owners, I'm sure is second nature. For property managers with a team, maybe tracking them has merit.. maybe not?!

Oh and "Ask them..ask them for referrals!" For example, "Do you know anyone who could benefit from _________________? One strategy to implement this is to mail a $25 gas card to them, ask the question, and include a return envelope. You could ask for a name and email address, or be bold and ask for a phone number as well.

What are your thoughts? What are some of your best practices for cultivating referral partners?

And because of my real estate brokerage time/training/education - I would ask . . . "Who do you know that could benefit from . . . "
 
Waste Not...Want Not [not vegan friendly]

Last weekend, I smoked an awesome Texas Brisket and some yummy Carolina Port Butts....ribs too.

Over the years, I've learned how to trim my meats perfectly to get the best end result after an 18 to 20 hour "cook".

The trimming process...if done correctly...creates quite a bit of excess that would otherwise go to waste...not at Crafty's.

I invested in a meat grinder and sausage stuffer...and make some of the most delicious ground brisket burgers and spicy Italian & German sausages...and even render the fats for use in sauces and seasonings.

Our little island had saying amongst VR Owners..."You have 100 days to make your money".

B.S.

When considering an activity that generates the most profit...well, obviously 4th of July, Memorial Day, Labor Day, etc...are the big cash cows...but why leave 265 days of rentals on the cutting room floor.

My laser focused email campaigns (not newsletters) and Crafty's Coconuts Club were hugely more profitable in the long run....and built great brand loyalty.

My competitors averaged about 40% occupancy in the off season...while we ran 90%.

I could could close with a cheap joke about watching law and sausage being made....but let's just go with the old "waste not - want not".
Hiya, Crafty, when you're done stuffing sausages and cooking butts, consider being a Consultant. Newbies on this platform that need help with creative promos like email-writing? Just the things that bring you joy.
If you ever decide to do that, sign me up. I'd like to create a fun, creative email to send out in 2021.
Cheers, Crafty! 🥳🤠✌
 
Waste Not...Want Not [not vegan friendly]

Last weekend, I smoked an awesome Texas Brisket and some yummy Carolina Port Butts....ribs too.

Over the years, I've learned how to trim my meats perfectly to get the best end result after an 18 to 20 hour "cook".

The trimming process...if done correctly...creates quite a bit of excess that would otherwise go to waste...not at Crafty's.

I invested in a meat grinder and sausage stuffer...and make some of the most delicious ground brisket burgers and spicy Italian & German sausages...and even render the fats for use in sauces and seasonings.

Our little island had saying amongst VR Owners..."You have 100 days to make your money".

B.S.

When considering an activity that generates the most profit...well, obviously 4th of July, Memorial Day, Labor Day, etc...are the big cash cows...but why leave 265 days of rentals on the cutting room floor.

My laser focused email campaigns (not newsletters) and Crafty's Coconuts Club were hugely more profitable in the long run....and built great brand loyalty.

My competitors averaged about 40% occupancy in the off season...while we ran 90%.

I could could close with a cheap joke about watching law and sausage being made....but let's just go with the old "waste not - want not".
I think I need to come down and visit you and try some of that smoked brisket!
 
For me it would definitely be onboarding new owners. If I am making $15,000.00 commission a year on a property and I retain the property for ten years that's $150,000.00.
Have to agree with Terry Terry on this one! I'm a big fan of leverage effects and adding one new property is the equivalent of adding 20-30 reservations/year. Add 10 properties and you just found 200-300 new reservations/year and if you keep those for 10 years (industry avg), there's an extra 2000-3000 reservations. Many of us already have the traffic to your "store", you just don't have inventory on your proverbial shelves. I saw a demo of Amber Carpenter's DemandIQ software yesterday and I was blown away by the amount of searches that were done on VRM's websites that didn't show results due to lack of supply. These potential guests are bouncing because they're not finding the inventory their looking for. This is traffic that you've already paid to get to your site.
 
BrookeP BrookeP, I am part of the bata testing Demand IQ and loved what I say in the demo.
Terry Terry DemandIQ is pretty incredible. It reminds me so much of the story of how the Navy did a research project on where they should add additional armor plates based on the planes that returned and where they were most likely to be shot. What they didn't realize was they need to armor the planes where they didn't find the bullet holes as the planes that didn't return we're being shot there. DemandIQ lets you see the planes that didn't make it home!
 
Can you elaborate? What is DemandIQ? I'm intrigued by the name alone.
Amber Carpenter started a new company called DemandIQ. Let me see if I describe what they do. DemandIQ looks at ALL of the traffic to your website, not just the guests that book. They have found that it's just as important (if not more) to look at the traffic that is coming to your site, searching for a property and not booking. What did they search for? Were they searching for 3 nights but all of your properties are 7 night minimums? Are 40% of your guests looking for pet friendly homes but you don't have any? She has software that she loads on your website and with a BI (business intelligence) tool, it spits out reports that give you the entire picture. A true game changer and a different way to look at demand data.
 
Amber Carpenter started a new company called DemandIQ. Let me see if I describe what they do. DemandIQ looks at ALL of the traffic to your website, not just the guests that book. They have found that it's just as important (if not more) to look at the traffic that is coming to your site, searching for a property and not booking. What did they search for? Were they searching for 3 nights but all of your properties are 7 night minimums? Are 40% of your guests looking for pet friendly homes but you don't have any? She has software that she loads on your website and with a BI (business intelligence) tool, it spits out reports that give you the entire picture. A true game changer and a different way to look at demand data.
Hi, this software sounds incredible because she goes beyond just spitting out metrics. She analyzes her findings in to "action plan" results, right? Good for those of us who can't digest BI results.
Any idea what she would like to charge for this service or is it too early in the process?
Thanks!
 

Matt Landau

Staff member
Ambassadors
Hi, this software sounds incredible because she goes beyond just spitting out metrics. She analyzes her findings in to "action plan" results, right? Good for those of us who can't digest BI results.
Any idea what she would like to charge for this service or is it too early in the process?
Thanks!
Here's a full interview so you can understand better:
 

JPrugh

Premium Member
Ambassadors
Since I also own commerical/residential property downtown, I'm doing my best to make Lindsborg, Kansas an even more attractive destination:
  • Two new small businesses are opening in January/February 2022: Swedish bakery (moving from a much smaller location) and boutique clothing (already has been open as a pop-up store a few times during the holidays)
  • Working to expand Lindsborg as an artist community by attracting a new gallery/museum for a regionally important artist opening up in another commercial location that will be empty by early January
Deepening my connections to city government:
  • Applied for state program to fund improvements on downtown buildings (two city leaders reached out to me first to ensure that I was going to apply)
  • Lindsborg's city manager is retiring after 23 years - sent Cameo of Barry Williams (Brady Bunch) thanking him for his years of leadership
 
Looking forward listening to Episode 95!
Communications with potential and current guests is the very best use of my time. Yesterday, a potential guest wrote to me “is Cinque Terre good for families?” I immediately copied a section of my guidebook, added some (more) personalized comments and voila’ she booked!

I am a big believer in overachieving in your core business and building out from there.
 
For me it would definitely be onboarding new owners. If I am making $15,000.00 commission a year on a property and I retain the property for ten years that's $150,000.00.
Terry is so correct here (as usual!). A property doing $50k in annual gross booking usually nets 10-15% profits per year. So in this example, that's $5k to $7.5k per year. Plus if you keep that property in your rental program for 10 years (industry avg), you're looking at lifetime profits of $50-$75k! I'd argue there isn't a better ROI on the planet than adding inventory.
 

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Matt Landau
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