Why Smart People Say No to Wisdom

Meet
Jeff Smedley

More than three decades of hawking technology and services to the real estate industry has hardened Jeff into a ferociously practical source of good advice. He’s a staple of Conservice’s multifamily sales team, and, maybe surprisingly, he has a lot to say about why people say NO to managed utilities in his day-to-day professional life.

How long have you
BEEN DOING THIS?

“Depends on what you mean. Working in the multifamily industry? I mean, when I was in high school I repaired apartments over the Summer and flipped them. I literally used to work on the print version of what is now the digital version of apartments.com. I’ve been in this industry for 35 years. If you mean utilities, I’ve been connecting people to utilities management for 15 years now.”

You’ve been doing this awhile.
SO WHAT’S DIFFERENT NOW? WHAT’S NEW IN THE INDUSTRY?

“Well, for one thing, rents are flat and a lot of my customers and prospects are having to give concessions for the first time in a long time to attract customers. That’s pretty new. For the last five years, we’ve seen record industry growth, sometimes as high as like 20% a year. Here at Conservice, we were rocking something like 800 owner conversions in a month. Right now it’s more like 80.”

How about investments?
HAVE WE SEEN A SHIFT THERE?

“Oh yeah. Interest rates have skyrocketed. Between rates being so high and rent growth stagnating, we’ve seen a really sharp decline in new construction investments. Which is kind of like a time bomb, right? It takes around two years for new construction to really get off the ground. So I think we’re going to see a pretty sharp deficit in inventory over the next two years to boot. The deficit might help with rent prices, but it’ll introduce its own problems.”

Rents are high. That can make for a tough sales environment.
WHAT’S YOUR PITCH RIGHT NOW?

“Haha. My pitch is pretty much the same as it’s always been. It’s just that my pitch makes a lot more sense to customers right now than it normally does. What we do, what I sell, is a service that straight up enhances cap rate to value. Managed utilities can make a twenty-million dollar property into a twenty-four million dollar property. Maximizing recovery is always important, right? But right now, with rents flattening and concessions on the rise, it’s gone from something that’s nice to something that’s CRUCIAL.”

Where do managed utilities fit for your prospects?
HOW ARE THEY THINKING ABOUT CONSERVICE RIGHT NOW?

“Look, property owners are smart. They know how to leverage the tools at their disposal to drive revenue. From pay portal percentages to AI chatbots qualifying new residents, everyone is looking to centralize and optimize their income. THAT’S where we fit in. Utilities are a huge bleed for a lot of folks. They’ve gotten comfortable using their stack solution or handling it in-house. Now that it’s too expensive, Conservice has been added to the ‘one more money saving tool’ list of services for the multifamily industry.”

If Conservice-managed utilities are essentially free and positioned to maximize recovery,
WHY DO SOME PROSPECTS SAY NO?

“Well, for one, fewer and fewer prospects say no. More and more mid-tier firms are trusting us to manage their utilities for them, and it’s a really good thing for the industry. But I’ll break the “no’s” I get down into a few categories:

BANDWIDTH: ‘Jeff, we love your product. We just don’t have the bandwidth. We’ve cut back our staff. We don’t have the bandwidth to make such a big move.’

This is a big one. People are feeling understaffed right now, and taking on something as integral as managed utilities can feel big. But you know what? We’re one of the few companies that have the ability to take on most of the onboarding burden. We have veteran, brilliant, dedicated account managers and a seasoned onboarding team. Our onboarding process is one of the best things about Conservice.

FAMILIARITY: ‘Jeff, we’ve been using the utility management tool included with our property management solution for years now. We have a great relationship with XYZ. If it’s not broken, don’t fix it, right?’

This one I totally get. Relationships are the floor this industry is built on. And if you’ve already invested in a service, using a utility management stack solution feels like leveraging your investment. It’s just that, frankly, it’s a waste of money. Sometimes nothing is more expensive than “free” or “integrated”. Because you know what? Those “free” or “integrated” property management solutions don’t even kind of cut it right now. They don’t provide regulatory support. They don’t provide dedicated account management. They don’t provide a singularly focused, decades-proven bench of utility expertise. What it boils down to is they just don’t save you as much money in recovery, exceptions, or efficiency.

KNOWLEDGE: ‘Who is Conservice? What are managed utilities?’

Luckily, this one gets smaller every year. We’re the largest utility management provider in the United States of America, so more and more of the conversation is happening before I meet my prospects. But a lot of people still don’t know about managed utilities. They don’t know that there’s an essentially free, money-recovering service they can straight up hand their utility management burden over to. Meeting people like this is always kind of great. I get to give them the good news.”

Ultimately, what do you think it’ll take to
OVERCOME THOSE OBJECTIONS?

“Just knowledge. The stack solutions my prospects are using, the in house accounting teams, they really don’t hold a candle to our service once people see the numbers. What it takes is laying out the facts. Our onboarding is great, our services recover tons of money compared to our fees, and our service is comprehensive—from regulatory protection to resident support. I don’t have to do nearly as much convincing as teaching.”

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William Bailey

William Bailey is a veteran writer in the real estate industry and the Content Manager at Conservice. He’s obsessed with utility technology, tarantulas, and the ways that language and stories can bring industries together.