Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.
Our property manager called with some bad news.
The flapper in the downstairs toilet at The Overlook was sticking, making it hard to flush. The sink in another bathroom was draining slowly. Guests were checking in the next afternoon.
The property manager seemed unconcerned. She suggested I try to get a plumber out sometime the following week, after the guests had checked out.
"I'm just letting you know," she said.
My wife, Sally, and I don't want plumbing issues to mar our guests' experience, so this was an urgent matter to me. I scrambled to get a plumber to the cabin before our guests arrived.
The conversation exposed what I call the outsourcing dilemma.
How do you create a consistently great experience when you and your outsourcer don’t see eye-to-eye?
Thanks to outsourcing, we can keep the walkways clear of snow and ice at The Overlook.
Who owns your customers?
We face a customer ownership issue at The Overlook.
Sally and I view people staying at the cabin as our guests. We want to make sure they have such a great experience that they tell their friends about us and come back again.
From our perspective, we've outsourced guest service to our property manager.
We don't have direct contact with guests. That's all handled via our property manager who books the cabin, welcomes guests, resolves their issues, and bills them for their stay.
From our property manager's perspective, people staying at The Overlook are not our guests at all. The Overlook is a supplier to her vacation rental business, one of nearly 60 cabins managed by her company.
Problems happen when we don't see eye-to-eye on guest experience issues, such as the urgency of minor plumbing problems.
Our property manager is okay with her guests having a few minor plumbing problems during their stay, but we’re not okay with that happening to our guests.
Other industries face similar challenges where customer ownership is blurred.
Fast food chains franchise locations to independent operators.
Consumer brands outsource their customer contact center.
Online retailers outsource shipping and order fulfillment.
You likely face a similar dilemma if your business outsources any part of its customer-facing operation. This can sometimes create conflicts when your partner has different philosophies, priorities, and capabilities.
What challenges are caused by outsourcing?
Creating a consistently great guest experience at The Overlook is our biggest outsourcing challenge.
We've learned that any deviation from our property manager's standard procedure creates more opportunities for mistakes and services failures.
For example, we wanted to supply extra towels for guests using the spa. Guests had been using towels from the bathrooms, but it's uncomfortable to dry off after a shower and then re-use your still-wet towel to dry off after using the spa later that evening.
So our property manager agreed to add extra towels and we put a small bin next to the door leading outside to the spa to make this easy.
It wasn't easy.
It took nearly 18 months of reminders to get extra spa towels regularly added to the bin. Our property manager's standard procedure is to place towels in each cabins' bathrooms, so adding extra towels near the spa was an exception to their standard practice.
Which brings us to another challenge.
It's difficult to cede control of so much that impacts the guest experience to a property manager, but my wife and I couldn't rent our cabin without outsourcing.
We live two hours away from the cabin, so we'd need to hire local labor ourselves to perform many tasks. Good people are in short supply everywhere, and it's hard to find reliable help plowing snow, cleaning houses, or performing routine maintenance.
Our property manager faces similar constraints, but she's able to leverage her local presence and the scale of her operation to work with a consistent group of employees and contractors.
We’d also have to do all the marketing, sales, and customer service ourselves if we stopped outsourcing. The Overlook has been sold out every weekend for over a year and a half, so it would likely be difficult to replicate our property manager’s performance.
There are other property managers in town. We've vetted several and the results weren't good. None appeared capable of doing nearly as good a job as our current manager.
Outsourcing isn’t easy, but it’s our best option right now. It just takes a lot of effort to make things work.
How can you outsource more effectively?
A Customer Service Tip of the Week subscriber recently emailed to ask me how to work more effectively with an outsourcing provider.
While I'm clearly struggling with this myself, I did have a few suggestions.
First, set clear expectations. It helps to know who is responsible for what. That sometimes is an evolving conversation. My wife and I talk to our property manager about expectations at least once per month.
Second, provide your outsourcer with adequate resources. We act quickly whenever something needs to be repaired or replaced. We also keep a stock of extra wine glasses, light bulbs, and other small items so our property manager can easily replace them as needed.
Finally, monitor your outsourcer's performance as closely as you would an employee. We inspect The Overlook once a month using a detailed checklist and discuss any issues with our property manager. We also perform regular preventative maintenance, deep cleaning, and fix problems that are outside our property manager's scope of responsibilities on these monthly visits.
Conclusion
My preference is to avoid outsourcing whenever possible. To me, it's always best to have direct contact with your customers throughout the entire service delivery process.
But that's not always feasible.
So if you must outsource, it helps to recognize the inherent limitations. Take care to be an active participant in the relationship and constantly advocate for your customer.