Harnessing The 80/20 Rule By Frank Rolfe

There’s an old rule in sales that 20% of your sales force typically generates 80% of your sales. In the manufactured home community business, that “80/20” rule permeates all levels of the industry. Understanding this simple fact is key, and then harnessing its factual energy is what separates the best owners from the average. So how does it work? 

In community managers Here the 80/20 rule is in full bloom. If you have more than one property, you will immediately see the difference in performance of certain managers who have impressive stats month-over-month while others struggle. What makes these managers so much better? We have been monitoring that for years and it typically boils down to four factors: 

1. superior people skills 

2. punctuality 

3. a positive attitude and 

4. time efficiency

Since superior managers are an exception rather than the norm, you need to embrace these top 20% that give you 80% of your positive results, and “share” them among your other communities. We call this the “buddy system” and it basically involves having the strong manager help offset the weaker one with daily calls and mentoring. It’s kind of like a sci-fi movie where you are trying to implant some of the brain cells from patient “A” to patient “B”. If you don’t have more than one community – and even if you do – then the other 80/20 strategy is to acknowledge that a superior manager can do so much good for your community in appearance and profitability and refuse to settle for those who are not of this caliber. Remember the old adage “it’s easier to change people than to change people”. When you find a winning manager, do everything you can to retain them In residents By far the majority of residents in most manufacture home communities are wonderful people who display high levels of pride of ownership and sense of community. However, there are those few who ruin things for everyone else. It’s strange but it normally works out that there is one resident on each block that drags down the quality of life for everyone around them – so in this case it’s the 80/20 rule in reverse where 20% of the residents cause 80% of your rules (and often collections) problems. 

How do you resolve this dilemma? We call it “rock the block” and it means your put all your focus and attention on those 20% that are really hurting the property and not worry about those 80% who are doing a basically good job. Have the manager go to these few offenders and say “we really want to make your home and yard the best it can be, and it needs painting, skirting, roof sealing and yard clean-up – so what’s your plan?” When they respond that they don’t have a plan, then the manager should volunteer (if the resident is current on their rent) that the management will perform the needed repairs and bill it back to the resident in affordable monthly installments. The only way to solve this 80/20 problem is with proactive effort.

In community performance If you own more than one community, you will note that there is always that one property that outperforms all the rest – even though they appeared roughly of the same potential at purchase. There’s an old story about Raymond Nasser, the developer of NorthPark Mall in Dallas (the highest revenue per square foot mall in the U.S. in those days), who once told another builder “I’m worried because I built one mall that might be a flop and it could drag down the one that I think will be a winner”. As you can guess the “flop” turned out to be NorthPark – and he had guessed completely wrong. That’s always how it goes when you have several properties. In this 80/20 scenario, all you can do is to be thankful for the property that is your portfolio piece and study it vigorously. Why is it so good? What could have been detected in diligence to suggest it was such as winner? And then use this information to make better decisions on future purchases. Nasser studied NorthPark for the remainder of his life, yet he was never able to develop another property to rival its performance even remotely. However, most everything he did afterwards was also a hit since he copied NorthPark as closely as he could.

Conclusion The 80/20 rule is all around us. If you embrace the theory and harness its energy you’ll end up with a better team, happier residents, and a more successful portfolio. Time to start making those observations.

Frank Rolfe has been a manufactured home community owner for almost two decades, and currently ranks as part of the 5th largest community owner in the United States, with more than 23,000 lots in 28 states in the Great Plains and Midwest. His books and courses on community acquisitions and management are the top-selling ones in the industry. To learn more about Frank’s views on the manufactured home community industry visit www.MobileHomeUniversity.com.