FIGHTING
Scope Creep Getting a handle on services and time spent on your clients helps you grow profitability and retain your managers. By Lynette Bertrand, Director of Marketing and Communications, CACM
Profitability is hard to come by these days. Boards and associations want more services, but they’re also looking for bargain basement prices and often shop around to find them. This has put an increasing amount of pressure on management companies that find competition to be only getting fiercer by the day. This is affecting all areas of their business from hiring and paying staff to keeping them to operating a profitable business. But one thing that’s overlooked often in this scenario is scope creep and its impact on the bottom line. What is scope creep? In short, it’s overservicing a community. It’s not billing for services offered beyond the scope of the management contract — not charging for overtime, and it happens to the best of them.
the same size or share enough business similarities. “Overservicing a community is the biggest issue and one of the hardest to get in check,” Balkcom said. “When does customer service go too far? In what ways has scope creep been damaging to your company?” What’s all too common is for community managers to spend too much time on certain properties, beyond what is specified in management contracts. This not only eats at profitability, as managers don’t bill for this extra time, but also results in manager burnout with many feeling they have too much on their plate or not enough time to get their job done. Balkcom said it comes down to finding the balance of
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Adam Balkcom, Senior Vice President and Consulting Manager for Association Prime powered by Southstate Bank, said that scope creep is one of the key challenges that comes up and is tackled during meetings of CEO groups that he has formed and leads. These groups are made up of owners and executives of management companies from across the nation, who meet monthly to address diverse business challenges from hiring and retaining staff to training to building company culture and vision, business development, and yes, profitability.
offering great service while also operating a great company. That means holding boards and managers accountable to adhere to the scope of work.
Balkcom was hired by Association Prime to consult with and help grow HOA clients’ businesses and launched the first CEO group more than two years ago. Now he facilitates three groups, soon to be four. Groups are carefully assembled to ensure members are able to exchange ideas
While profitability is not an exact science and can be quite subjective, there are ways to help measure and improve this metric. One key way is to review contracts and ensure that not only the communities and boards are aware of what is covered in them, but also the manager so that they can
with others who are not direct market competitors but are
communicate when boards ask for time and services that
Vision Winter 2021 | cacm.org
“You can’t be the low-cost leader and the high-service leader,” he noted. “If you’re going to be the Mercedes Benz of HOA management, then you will need to build more time, services, and cost into the contract. But if you’re going to be low-cost leader, then you have to be very tight on the contract. There is a cost to offer a service.”
