Every lettings agent will tell you they offer a great service, but how many of them can actually prove it? How do they show they’re willing to go above and beyond for their tenants and landlords? Jonathan Stein believes that he has found the answer.
His company, Vaboo, provides letting agents with a tenant rewards platform which not only gives tenants exclusive access to a wide range of retail and lifestyle discounts, but, in doing so, also produces immense levels of engagement to create a vital dynamic shift in the relationship between agents and their customers.
Jonathan believes that significant value can be found within this relationship, value which is as yet going untapped. Taking it one step further, he believes that the private rental sector has more dormant potential than any other industry in the world.
With beliefs like that, the opportunity could not be missed to sit down and pick his brain.
Vaboo CEO, Jonathan Stein, spent his adolescence and early adulthood dreaming of being a sports agent but, as he himself confesses, upon leaving university, his arrogance hampered him.
“The usual route into sports management is unpaid internships,” he says. “With my shiny new degree under my belt, I believed unpaid work to be beneath me.
“I was wrong, of course, and it was definitely a mistake but everyone has a story, and mine has brought me to where I am today. No regrets, as they say.”
It’s important to understand Jonathan’s story in order to understand the true benefit of Vaboo’s offering, for it was his own first-hand experience of being a private landlord which inspired the company’s offering.
Refusing unpaid work, Jonathan instead fell into the world of recruitment for a few years until the tragic events of 9/11 caused his field of expertise, global telecoms, to grind to a halt.
At this point, the sports management bug was still an itch he needed to scratch, so, despite lacking in experience, Jonathan sent 200 letters to all of the sports agencies around England.
“It was a very cheesy, Jerry Maguire-esque letter,” he says today, “and across the front, in big Superman style script, I wrote, The Future Of The Sports Business Is Here.”
Despite this, or perhaps because of this, three agencies offered him an interview and one actually ended up hiring him.
“They specialised in golf, which was totally my thing. I could hardly believe it.”
It was, unfortunately, all too good to be true, and just two weeks into his new job, Jonathan was told that the company didn’t have the money to pay his salary due to a recent courtroom defeat – a client refusing to pay their invoices.
“I look back now and know that it was a blessing,” he says. “My dad had just been diagnosed with terminal cancer and I got to be with him every day for the last two months of his life.”
Jonathan’s next move saw him take a job with American Express staying for eight or nine years before leaving to become the Business Development Director for an insurance company, working in the employee benefits space.
“I learned some incredibly important lessons at AmEx,” he says, “specifically around customer service and experience, but I have always had an entrepreneurial spirit, and every professional move I’ve made has been done with the end goal of one day working for myself.”
To this end, Jonathan had also been busy building a property investment portfolio, kick started when he used the humble inheritance left by his father to purchase his first rental property.
“I knew I wanted to supplement my salary income, and I’ve never had the patience for playing with stocks and shares: property was much more appealing.”
Just over a year after starting work with the insurance company, Jonathan had an unexpected but explosive falling out with his boss, the sort which saw him quit his job on the spot.
“It came out of the blue and didn’t feel nice to start with, but then, very quickly, I realised it that it was the catalyst I’d been waiting on for years, a kick up the arse to finally go it alone.”
His next move was full-time property development and trading, much of which revolved around the auction room. But Jon wasn’t buying, he was selling.
“I was sourcing really bad properties, buying them, doing absolutely nothing to them, and putting them up for auction. I repeated this process as often as I could, each time making a profit of anything between £1,000 and £50,000. The quickest flip was 24 hours, the slowest was two months.
“By 2015, these trades led me into the world of development, but it’s a very high risk venture and I had always had this passion to grow my own business, control it, strategise it, make it a success, and then exit. The development world didn’t offer this.”
It was then that Jonathan searched for a way to create his own company and his own destiny. As is so often the case, the answer came from an unexpected place.
Creating a business by understanding the tenant experience and the common difficulties of living life
By this time, Jonathan’s rental portfolio contained around 20 properties, producing an income which had doubled his salary from the insurance firm. This income had, therefore, always been paying for life’s luxuries. Now, without a job, it was paying for life’s necessities.
“Naturally, this meant that the rental properties became much more important to me,” he says. “Low and behold, as sod’s law always dictates, this was the moment I started to have trouble with tenants not paying rent. In ten years of being a landlord, I had never once had a problem. Now, just as I needed the income most, two or three were growing their arrears.
“Needless to say, I was concerned. I needed to find a way of resolving the problem and de-risking myself as a landlord going forward. I did a bit of research on the market and the rental industry and discovered a growing trend of increasing arrears and projections for the issue to worsen over time.”
His concern intensified, and the first thing he did was reach out to the letting agents who were responsible for looking after his tenants.
He sat down and started asking questions: What’s going on? ‘Who’ are these tenants who aren’t paying rent? What do they do for work? Why, for the first time, can they not afford to pay? And so on.
“Within about 30 seconds it was clear: the agents didn’t have a clue.”
His agents had no idea who the tenants were because most of the tenants had been in place for many years and the agents had no relationship with them whatsoever. They didn’t know what professions they all worked in, for example, because the most recent record of such information was the original tenancy application, now years out of date.
And then, bang! Jonathan was struck by an idea.
“It was a lightbulb moment,” he says. “I was suddenly sent back to my time with the insurance company and the employee benefits programmes we had worked on. Surely I could help my tenants by enabling them to save money elsewhere in their lives and thus have a better chance of paying rent on time.”
Energised, Jonathan started reaching out to the problem tenants and having long, honest chats with them.
“I said to them: I’m not here to turf you out, I want to help you and see if we can find a way forward and keep you in the property.”
Looking back at it now, Jonathan says these conversations were not about money at all. Not the money he was offering to save them via retail discounts, nor that which they owed him in arrears. It was about him displaying empathy and actively wanting to understand them.
“This is a thought process that came directly from my experience at American Express, where customer service and experience is the root of everything.
“At AmEx, it wasn’t about how well we were delivering the service our customers expected us to deliver, but how well we were going above and beyond what our customers expected. It’s a vital difference which has stayed with me to this day.”
Across his 20 properties, there were between 50-60 tenants, none of whom he knew anything about because the agents had been handling everything for him, albeit badly.
“I realised what poor form this was. I had 60 customers who I knew nothing about. You wouldn’t accept that from a business of any sort, so I knew it had to change.
“ I made it my business to learn everything about them. Who are they? What work do they do? What hobbies do they have? What shows do they watch? What pubs do they like? And most importantly, I started to learn about exactly why the tenants who weren’t paying, weren’t paying.”
With this information, Jonathan was able to help the tenants rather than simply kicking them out or adding even more pressure and anxiety to their lives.
“One guy, for example, was struggling simply because his work patterns had changed and so too had his pay days. It wasn’t that he was earning less, just that it was coming at different times. So, we made some small adjustments to his rent payment and solved the problem.
“For those tenants who were struggling to afford the rent, we arranged payment plans, small installments each month to help them fight their way out of arrears and back into the black, as it were.”
On top of this, Jonathan started offering very minor discounts to all of his tenants, that he had managed to negotiate thanks to contacts he had made in his previous job.
“Again, it wasn’t just about the discounts saving the tenants money, the impact was far wider. It was about creating a dynamic shift in the relationship, allowing for new levels of trust and respect to flow both ways.”
The most remarkable change Jonathan saw was an uptick in communication. If a tenant was struggling to pay rent, or was concerned they might struggle in the near future, they started to contact Jonathan directly and ahead of time.
“I never had to chase anyone for anything again,” he says. “And over the next 12 months, the process of managing my properties was much less stressful. Minor maintenance issues, which I would always get called about, essentially disappeared: the tenants were fixing them themselves.Believe me, this was not the case before.”
Jonathan started to analyse his expenditure. The type of maintenance jobs he had most regularly been paying out for, those which cost less than £100, all but vanished.
There is just one explanation for this: the tenants now had a new found respect for their landlord, they liked him, and they believed that he was on their side, through good times and bad.
“On top of that, people also started staying in my properties for longer, so voids were reduced, too.”
Word gets around – can you do the same for me, too?
Jonathan didn’t know it at the time, but this act of trying to better engage his own tenants marked the beginning of the entrepreneurial life he had long been seeking. It was the unofficial birth of Vaboo, and soon, other landlords started showing an interest.
“As a landlord and trader, for many years I was attending two or three networking events and conferences every week. I wanted knowledge, contacts, properties, and so on. Tonnes of landlords and agents attend these things.
“I started chatting to people, telling them the story I have just told you and several asked me to help them do the same thing for their tenants. First it was private landlords asking for help, but then the small, independent agencies started approaching me, too.”
The opportunity was clear and at the end of 2015 Vaboo soft launched, Jonathan having persuaded many of his old contacts from the insurance job to take a punt on partnering with him.
For the first couple of years, the plan was to talk to as much of the market as possible in order to develop the proposition. Over that time, Vaboo started to take shape.
The Vaboo Offering
Today, having absorbed as much market feedback as possible, there are two sides to the business: letting agents, and large market accommodation providers, as well as some exciting partnership opportunities with utility providers and insurance businesses.
“With huge evolution and opportunity in the agency space, those that can prove why they are different will stand out and thrive. Competition has increased tremendously over the past decade, and now is the time for agents to put the tenant customer at the centre of the transaction.
“The build to rent sector is especially exciting,” Jonathan says. “It’s a sector which is all about the renting experience, it understands the value of everything beyond the bricks and mortar.”
“We offer clients the choice between a basic account and a premium account, the difference being the number of offers – with basic, there are around 50 deals available at any one time, with premium, it’s over 600 offers and discounts, mostly from national retailers, as well as other additional custom features.”
Screenshot of the customer experience dashboard, showcasing the latest and most popular offers available to tenants.
The service starts at as little as £50 per month for the basic service, with a per user cost as low as 20p for the premium service.
“At the beginning, agents were reluctant to pay for the premium package, but recently, and especially since Covid-19, more and more are starting to see it as a cost effective tool which will enhance their business moving forward.”
Customer engagement is a full-time job
Vaboo’s value doesn’t end with its ability to boost an agent’s customer experience and differentiate them in the market because, in the process of doing so, the platform also offers more quantifiable benefits, not least via the role it plays in tenant engagement.
“We handle all comms with the tenants,” Jonathan says, “meaning agents don’t have to spend the time doing it.”
Creating content to keep tenants engaged with the agent’s service is incredibly difficult, especially when running on a tight budget, so Vaboo is providing it for them extremely cost effectively.
“We create the content and handle the communication of that content, but we do it all under the guise of the agent, not Vaboo. For example, every month we send an email inviting tenants to enter a prize draw to get their rent paid for a month, all they have to do is answer a few basic questions. These emails get an exceptionally high engagement rate: often 50% of recipients open it up.”
If anyone who has ever sent a mass email, certainly for marketing purposes, knows that 20% is a very admirable open rate. 50% is unheard of and demonstrates an above-average eagerness from the tenants to hear what their agent has to say.
Those who have reaped the benefits of Vaboo’s customer experience platform
“Above everything,” Jonathan says, “it’s about psychology. Making the tenants feel valued and nourished means they’re far more likely to provide feedback and help agents learn how best to shape their business moving forward, and importantly recommend them.
“But it’s a long-term game. Most of our clients enter long-term contracts because they understand that Vaboo is part of a never-ending customer engagement strategy.
“We’re managing to give agents ten-times more engagement than they’ve ever managed before. One small agent told me that they were happy to get one review from Google in a month. In the first year using Vaboo, they got about 200 positive comments about their service without ever having to formally request one.
“It’s all about asking the right questions throughout the year. So, while we’re not technically a review service, the engagement we encourage provides agents with more information than a review possibly could.”
With this tenant feedback, Vaboo is able to produce marketing materials for the agents. Word clouds, for example, are proving a popular choice – you can see one on reedresidential.co.uk and Vaboo’s social channels – highlighting the words most frequently used by tenants when describing their agent.
“It’s all about the agent. I can’t stress that enough. We don’t want agents telling their tenants, if you choose to come with us, you get access to Vaboo. That’s what a lot of them naturally want to say, but I say, stop underselling yourselves, tell your prospective clients that it’s your Rewards program they’re getting access to. It’s one great way to prove you care about your customers. Make it your own.”
Remaining a relevant part of a tenant’s life is vital for agents, yet still so often overlooked and neglected. Many tenants will live in a flat for two years and, after collecting the keys, never once hear from the agent. As such, when it comes time to move, it doesn’t occur to them to use the same agent again.
Vaboo makes the agent as relevant on day 300 as they are on day 1, always at the forefront of their tenant’s lives.
The customer dashboard, for example, which houses and displays all of the available discounts and deals, is highly customisable. It is bespoke to each agent or branch, and agents can negotiate their own discounts, with local businesses, for example, and add them to the deals for their tenants. This includes any additional property services the agency might provide.
“Constant, positive engagement,” Jonathan says, “it improves the tenant experience and therefore improves tenant retention. This is the best way for agents to attract tenants, but also attract landlords.
“Most landlords have an emotional attachment to their properties, and they have an emotional attachment to the people in those properties, so they want them to get a good experience. A good experience means they will look after the property and communicate if there are any potential problems.
“An agent who can directly ensure these things, will secure that landlord’s business for many years to come.”
The private rental industry has a bad name, the result of a sketchy past. But this needn’t be the case forever. The damage can easily be repaired.
Vaboo’s mission is to improve the image of the sector and strengthen the relationship between agents and their customers. Empathy is far and away the best way of doing so. Jonathan hopes that his company can be a big part of this evolution, for the sake of agents, landlords, and, perhaps most importantly, tenants.
“Of course, the tenants must be central to everything – without them there is no private rental market. But what really excites me about this industry is the immense amount of untapped customer potential in lettings.
“So much money is being left on the table because agents aren’t really offering additional services after the point of move in. With most agents having a pool of tenant customers four times larger than their landlord customer base, these opportunities need to be understood as the industry evolves.
“As soon as they do, the increased revenue streams will change how they look at their business over the next decade.
“I think about this all of the time. I think about it in the morning and at night and have done for many years and still I cannot come up with another industry, business, or sector that has as much potential as private rentals. For agents, it’s all there for the taking.”