You didn't lose on price.

This summer we signed a build-to-rent operator here in Atlanta, a few dozen communities, websites and search across the whole portfolio and ads on a chunk of it. I ran the deal myself, start to finish, which I do less than I used to. I wanted this one for a reason I will get to.

On the second proposal call their COO looked at the upfront number and told me, more or less, that I was killing her. This was a big expenditure that had not been budgeted. Every property she brought us was going to cost her a setup fee, and that fee was bullshit. That was the admin fee she hits residents with.

She was not wrong about what it looked like.

What I said back

I asked her what number she was trying to be at. That is the first thing I do when someone tells me the price is too high, because too high is not a number and I cannot do anything with it. Then I told her what the fee was for, which is people. There is real human work in setting a property up on our platform and making sure everything on it works, and the fee pays for that work. Michael, our COO, came in behind me: we worked hard to build technology that makes this look simple, and none of it was free for us either.

She left the room for a bit. When she came back she had a counter on the website fees. We said thank you, and that we would get back to her.

That last part is the whole trick, if there is one. We did not say yes on the call. Not because we were playing a game. I wanted to go find the real answer instead of guessing at it in front of her.

The answer was not a discount

Here is what was under her objection. About a third of the portfolio is small communities, under a hundred homes, and those properties do not have the budget the big ones have. Not because anyone is cheap. A small community earns less than a big one, and the marketing budget follows the rent roll.

The easy move was a portfolio discount. Knock a percentage off everything, call it volume, sign it. I did not want to do that, because the big communities were not the problem, and I did not want to lose a third of the portfolio just because that third had smaller budgets. So I took the time to paper what tiered pricing would look like: one monthly for communities over a hundred homes, a lower one for communities under. Same product. A price that tracks what each property actually gets out of it.

That is not a discount. That is the price being right in two places instead of one.

What did move

The website setup fee. We cut it roughly in half. The onboarding fees on search and on ads stayed exactly where they always are, and every community in the portfolio went on search at that number.

I will move a one-time fee a long way before I touch a monthly. A setup fee is paid once and forgotten. The monthly is the value of the thing every month for two years, and the day you cut it you have told the customer what the work is worth. You do not get that back at renewal.

The other thing that moved was terms. Michael gave them flexibility I would not have led with: fees that start only when each site goes live, the ability to drop ads with notice, a cleaner exit if a property sells. That is how the two of us work. On some deals he is the one holding the line while I am ready to bend, and on this one it was the other way around. He read that terms were what would get it across the line, and he was right, because it got there without touching the number.

The cheaper option

They had one. Their property management vendor offers websites too, for a lot less than we do. I told them the truth as I see it: it is cheaper for a reason. That company’s value is in the management software you already pay them for. The marketing product got bolted on after. Then I offered introductions to a handful of operators who had moved from that setup to ours, and let them make the calls.

You do not have to run a competitor down to beat them on value. You have to explain why the prices are different, and then get out of the way.

The friend

Their marketing director was a former colleague from Cortland. He was a VP when I was a regional marketing manager, and he did not love my ideas back then. Some of them deserved it. Eight years later he was buying from me, and to his credit he never once asked for the friend price. Others have. A former colleague on the other side of the table will often expect the deal to be a favor, and if you let it be one, you have taught everyone who hears about it what your price really is.

The argument we have every week

We have this argument inside Repli constantly, and it is a healthy one. The sales side wants to match. A prospect brings someone else’s number, and the fastest path to a signature is to meet it. I understand the pull. I have sat on a deal I wanted badly and watched the number become the only thing in the room. But most of the time, when we lose on price, we did not lose on price. We lost on value. We never made the case for why the numbers were different, so the numbers were all the customer had.

What I’d tell you

One-time fees move. Monthly fees do not. Ask for the number before you argue with the feeling. When a third of the portfolio cannot afford you, price that third, not the whole thing. And when the customer leaves the room and comes back with a counter, say thank you and go find the real answer.

One last thing, and the reason I ran this deal myself. I priced it in a tool I built, a proposal builder inside our internal admin, partly to prove it worked before our sales team started using it. The tiered pricing lives in there now as a standard. The next time a small community cannot afford us, nobody has to ask me.

Their COO was doing her job. So were we.