The Demand Solutions Blog

How AI is Changing the Ballgame for Multifamily

by Donald Davidoff | Aug 1, 2017 12:00:00 AM

How AI is Changing the Ballgame for MultifamilyMany of you who know me well have heard me say that I haven’t seen a “home run” in multifamily housing technology in years. There have been several in the past:

  • Automated credit screening
  • Pricing and revenue management software
  • Web-based property management systems (PMSs)
  • Resident and prospect portals

But since the late ‘00s, I simply haven’t seen any home runs. That doesn’t mean there haven’t been technological advances and new products worth using; it just means that none of them were more than a simple “base hit” to keep using the baseball metaphor.

However, in the past few months, all of this has changed. I now believe we are seeing the next “big thing.” Not just in real estate technology, but rather in all workplaces in all industries. And that “thing” is artificial intelligence (AI).

AI comes in many shapes and sizes—improved speech recognition, machine or “deep” learning, interactive robots and chatbots, etc. While still somewhat stuck in a “hype cycle,” I believe that AI will ultimately change many white-collar jobs analogous to the way industrialization changed blue-collar jobs. I don’t say this to be an alarmist but rather to recognize the inevitability of how AI can potentially perform a variety of functions better than traditional code-driven software and human workers.

Here are just few of the ways I see AI changing marketing and customer experience in multifamily:

  • Digital marketing management: There are already market-ready solutions for managing digital marketing spend (PPC, display and social), so this isn’t much of a forecast. While I’m not yet aware of any MFH marketers currently implementing AI, the appeal of an AI system that learns what works and what doesn’t and is on the job 7x24 with no emotional feelings is compelling.

  • SEO: With growing AI semantic language understanding and an already-proven ability to recognize photos and context such as emotional meaning, it’s not hard to imagine an AI engine creating and testing different landing pages, ad copy, image selection and running hundreds or thousands of mini A/B tests to optimize SEO…and even to provide the ultimate in 1:1 marketing on our websites.

  • Email campaigns: That same SEO optimization capability can (and will) be applied to email campaigns.

  • Online customer search: This is already happening in the travel industry (check out Wayblazer), so it’s just a matter of time before someone applies this to housing search. I know of at least one large MFH technology company working on this very topic as you read this.

  • Smart home controls: Enough has been written about smart homes and the possibilities (and challenges) presented, that I won’t belabor the point here. Suffice it to say that smart home technology may often be among the first real experience residents personally have with forms of AI.

  • Customer segmentation: AI promises to reveal patterns and groupings of behavior better than standard cluster analysis algorithms. Marry that up with the 1:1 marketing delivery discussed above, and the combination could dramatically improve marketing effectiveness all while serving prospects and residents better by matching their needs (spoken and unspoken) to the most appropriate product.

  • Language translations: AI is already vastly improving language recognition proficiency, and this is only likely to grow in importance. Just as Star Trek communicators foresaw the Motorola flip phone, we may not far away from the universal translator.

  • Pricing: As the person who led development of the first pricing and revenue management software product in our industry, I’m particularly intrigued by the possibilities AI presents for improving pricing performance. All of the PRM products in the market now have algorithms that were built by people to explicitly include certain factors while thus explicitly not considering others. AI presents the potential to let the machine decide for itself what matters and what doesn’t and by how much. Who knows, it could add another 100bps or more to pricing performance.

  • Pepper.pngVirtual concierge: AI is already being used in some high-end retail environments to provide both physical virtual concierge robots and AI-powered text chatbots. The only thing holding us back is someone investing the time and money to build one for their communities. I believe that time is coming very soon. Such a bot could not only answer questions but also process initial service requests, respond to routine email and phone requests, etc.
  • Leasing tour guides: It’s a big step in degree, but not a big step in kind, to move from a virtual concierge to a virtual tour guide/leasing associate. It probably starts as a mobile phone enabled audio chatbot for self-touring and eventually moves to a physical robot tour guide.

  • Scoring associate interactions: We already have services that listen to associate phone calls and score them. Even using offshore resources, they still require the cost of humans to listen and are subject to inconsistencies and bias as a result. The semantic understanding that AI promises naturally leads to automated phone scoring. Not only can we score calls to coach associates after the call, but we could then provide advice to associates in real-time through whisper functions, a chat window or through their CRM interface.

As you can see, the applications are limited only by our imagination. However the future evolves, I’m confident that AI and robotics will radically alter and improve multifamily housing business process.

Join me at NMHC’s OpTech for a panel on the future of AI and robotics in multifamily housing.

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