In the past, I’ve written about the underlying challenges that have distracted from the focus on sales. Just think about the history of leasing-related practices:
- Late 1990s: Applicant screening is revolutionized by the introduction of immediate credit scoring system.
- Early 2000s: Pricing is revolutionized with the implementation of Lease Rent Options (LRO), the industry’s first automated pricing and revenue management system.
- Mid 2000s: Web- and cloud-based Property Management Systems (PMSs) become de rigeur, forever changing how information is collected, analyzed and distributed to better run communities.
- Mid to late 2000s: The eCommerce wave washes over multi-family housing. Online leads, leases, service requests, payments and host of other activities radically alter how we generate and process leads as well as how we communicate with residents.
Throughout these years, there’s still one significant aspect of leasing that is modeled, trained and coached almost exactly the way it was done 20 years ago—leasing itself (aka sales). Yet everyone I know agrees that prospects surely don’t shop the same way they did back in 1995. Google has even documented this phenomenon in their seminal study about the “Zero Moment of Truth.”
The reality is that prospects are typically doing 65% or more of their search and decision making BEFORE they ever talk to a salesperson. So while we’re at “square 0,” that prospect on the phone or coming in for a tour is almost always way ahead of us—and sometimes “on the last lap.” With that much of a disconnect, I sometimes think that the only reason anyone gets leases is because everyone is equally out of synch with their prospects.
The good news is that after years of neglect, the C-suite is starting to take notice. I think the combination of a) the obvious need for authentic, contemporary sales models coupled with b) the reality that many companies (in fact most of the NMHC top 50) are using price optimization and have entered the digital marketing age, means that COOs and CEOs are beginning to recognize that yesteryear’s sales models and training are not optimal for today’s prospects and salespeople. We need an approach that:
- Treats the prospect as the intelligent, knowledgeable individual they are.
- Recognizes that our sales associate base is not going to change.
- Is quick for our associates to learn and master since we will have 30% (or more) turnover at the leasing associate level
C-suite executives are also beginning to recognize the power of more effective sales for the bottom line. While occupancy may have a cap, systems like LRO, Yieldstar, Pricing Portal and Rent Maximizer all will push rents higher if sales velocity is better. And with cap rates in the 5-6% range, each incremental dollar of rent is worth $16-20 of property value. That’s a big multiplier and one that is starting to catch their attention.
So the question isn’t really whether you’ll update your sales approach and training—IMO, it’s just a matter of when.