Those of you who know me well know that my brother is a sales coach. Well, more than that but this blog isnt really about him, so Ill leave it as a gross simplification of what he does. He and I used to work togetherhe ran a sales team and I ran the service team for a membership group of travel agencies back in the 1990s.
One of the first things I remember he taught me about sales and marketing is that people are motivated by only two thingsthey seek to avoid pain and they seek to gain pleasure. But its not symmetrical. Were actually wired to put more attention to avoiding pain than to seeking pleasure. Thats why its easier to sell something to someone solving a crisis than it is to someone whos doing very well and says they want to do better.
So as demand managers, how can we use this to our advantage? In marketing, and in sales, theres a tendency to bias our communication to emphasize all the benefits of living with us. And the term benefits usually carries the connotation of all the positive things about our communities and our apartments. So we play to the seek pleasure part of the equation.
But wait! Didnt I just say that people respond better to avoiding pain? And lets face it. No matter what we do or say, were still landlords. That puts us about a step ahead of lawyers and congressmen when it comes to peoples initial trust in us. So were doing it backwards!
So how do we improve our marketing and sales by looking at the avoid pain part of the equation? Think about the various pain points people have. Location is important in real estate because residents dont want the pain of long drives (or walks) to wherever theyre going. Curb appeal matters because people dont want the risk of dirty homes nor do they want the emotional pain of friends and colleagues looking down on them.
But as I alluded to a couple of paragraphs ago, the biggest pain point is the risk of signing a 12-month lease and quickly finding out I made a mistake. Its the trust issue. AND LANDLORDS DONT START WITH A LOT OF TRUST from people who dont know them. Plus its a BIG expense each month, so this is a BIG decision. Enter the satisfaction guarantee.
When I was at Archstone, we emphasized our 30 day move-in satisfaction guarantee. It largely eliminated the risk for prospects and it showed them how much we believed in our product. It was a source of pride for our associates and it signaled that new residents could hold them accountable. And the best thing was less than 1% of residents ever took us up on it. Meanwhile about 5% of our new residents leased our communities sight unseen, and they told us that the satisfaction guarantee was a big part of their willingness to do that. They knew our product had to be good to make that guarantee; and if it wasnt, they could get out.
I just did a quick survey online of the big publicly traded MFH REITs. Equity, AvalonBay, Camden and Phttp://www.postproperties.com/post/guarantee.aspxost all provide such a guarantee (note: some of the websites make it easy and obvious to find while others I really had to search hard to find). EQR state perfectly:
We are so confident youll be happy with your new apartment that we guarantee it! If you are unhappy with your apartment during the first 30 days of your lease, we will allow you to cancel your lease and youll only have to pay for the days you lived with us.* Its that simple.
I found a few that either dont offer it or dont make it easy to find on their websiteeven when Im looking for i