The Demand Solutions Blog

Last week, we talked about how unit amenity pricing is the most common place to uncover hidden NOI in multifamily rental operations, and we covered the various reasons why amenity opportunities present themselves.

Unit amenities are a simple concept, at least in theory.  However, experience shows that the practice is a lot more challenging. So, let’s explore a few of the reasons that finding missing amenities is more difficult in practice than in theory.

1. It takes a concerted effort. Finding missing amenities is not like finding trash along the tour path. Associates must make must review and understand the configuration of the PMS and purposefully evaluate that against what they see in the property. It takes a combination of looking at site maps, Google maps and physically visiting buildings and units. It’s rare that one just stumbles upon the obvious.

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Early May has long been the time of year for multifamily marketers to head to Orange County, CA for AIM. As convivial networking opportunities go this event can’t be beat, which explains it’s impressively growing audience of both owner/operators and sponsors.

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A headline about consumer preferences caught my eye recently. It was from the recent annual meeting of the Urban Land Institute (ULI) in Boston, and it read: "Walkability Now May Outweigh Transit Access in Valuing Location."  

The idea is interesting for several reasons: proximity to transit has, after all, been one of the most critical attributes of apartment locations in the urban core for decades. What can be happening in our ever more densely populated cities to push it down the list of priorities? The short answer - according to the panel of industry luminaries including Green Street Advisors and AvalonBay Communities - lies in changing workplace demographics and travel habits. Read More

In 2014, we partnered with On-Site to release a study that focused on how effectively multifamily operators were utilizing email marketing. Three years later, we revisited the study to see what, if anything, has changed.  

The initial 2014 study surveyed online responses from 31 different communities. The communities represented a wide range of companies—public and private, national and regional, owner/operator, fee manager (and mixed), with an equal distribution of geographic locations. We made contact with the various communities through their company website (not through apartment marketing sites) and requested information about a one bedroom one bathroom apartment.  If required, we asked for a move-in date one month from our inquiry date, and specified a 12-month lease. We intentionally did not give a phone number so that we would experience how operators responded through online means exclusively.

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The possibilities with email marketing have come a long way.  Greater functionality and the plethora of automated email marketing platforms represent an apartment marketer’s fantasyland.  However, just because more is possible, doesn’t mean multifamily operators are using email marketing more effectively.

Research we conducted a couple years ago (that we are in the process of currently updating) shows that very few operators are effectively using emails as a marketing tactic. In fact, surprisingly few use it at all, so “Tip #0” is that you should have an organized email re-marketing campaign.

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I just got back from AIM last week, and it was quite the inspirational experience. As usual, the networking was great…a chance to catch up with many old friends and meet a few new ones. Here are key themes I took away from the sessions I attended and the conversations I had:

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With HBO about to premier my favorite currently running series, Game of Thrones, I couldn’t help but see many signs of that show's catchphrase in recent pronouncements from various media, that absorption rates are now below new delivery rates, thus likely driving moderation in occupancy and rent growth in many markets.

Winter is indeed coming.

Unlike the never-ending contest between the Lannisters and the Starks, we in multifamily can step away from the battle and prepare to face the Windwalkers of the next recession. Here’s my checklist for just a few areas in demand management to review for any sophisticated multifamily operator: 

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One of the strongest trends over the last five years in multifamily demand management is the increased focus, investment and sophistication of the marketing function. As more multifamily operators have adapted to the heavy “digital” world we now live in, the focus and use of data and analytics to drive decisions has multiplied.

While that is certainly a very good development, there is still significant room for growth and improvement. The next barrier to address from my experience is the ability to close the loop and connect marketing investments into revenue outcomes.

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As we’ve shared before, the first two minutes of your interaction with a prospect can determine if you win or lose the sale. Given the brief amount of time, it’s important that you have a clear process to start strong.

Here are five rules we recommend you follow to ensure your conversations start strong, and stay that way throughout the process.

1. Best Friends Conversation

As we shared in our post about the first two minutes, the first (and most important) rule is that your goal shouldn’t be to make a sale. Instead, it should be to have a “best friends conversation.”

Think about it, if an old friend just walked in knowing that you have expertise about apartments and asks you, “Where should I live,” you wouldn’t jump right into features and benefits. You’d catch up with them, learn what’s important, and advise them on what they should do. If there was a match and it meant moving into your community that would be great, but if your community weren’t a match that would be fine too.

Prospects can sense your intent. If you’re not aligned with them, they’ll feel it. They may not be able to put words to the feeling, but it will have a material negative impact on the rest of the process.

2. Assume Positive Outcomes

Whenever I meet with someone I always assume that I can help them. I assume that they’ll value my opinion and that things will go positively. This assumption creates a confidence that is attractive to prospects. Just as they can sense if I’m not aligned with their interests, my confidence will have a material impact on the outcome (and enjoyment) of the sales effort.

3. Don’t Interrogate

It is true that the most powerful thing you can do as a salesperson or leasing associate is to ask good questions. However, it is critical that the conversation never feels like an interrogation for your prospect (and it’s a fine line).

Questions should be conversational. Keep them open-ended and ask follow up questions. Use the “tell me more” technique to keep your prospect comfortable and sharing. Remember, you’re in this together.

4. Take Control

You’re the expert. You manage tens to hundreds of moves a year. Your prospect does it less than once a year. Relocating is one of the most stressful events of anyone’s life. Walking into a building to meet with a “salesperson” just adds to that stress.

When people are nervous, they’re looking for someone else to control the process. Controlling doesn’t mean being a jerk or rambling on incessantly. It means having a process and sticking with it.

When you visit the doctor when you are sick or have an ailment that needs to be addressed, how would you feel if the doctor meandered through and didn’t control the process? Your prospect will feel the same way.

5. Make Them Feel Safe

This leads us to our last point. The whole process of finding a place to live is stressful. When people are stressed, their flight/fight response kicks in and shows itself in a variety of ways.

The best way to counteract that pressure is to create a feeling of safety. This means empathizing with your prospect. It means taking the judgment totally out of the conversation. Your job is to make your prospect feel comfortable enough that they can share whatever they are thinking and feeling in a safe environment.

Following these five rules will put you in the position of authority, while also increasing your likeability factor. Together they’ll increase your positive results!

 

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In my last blog, I promised to talk a little more about longstanding vacant, so here we go. I am not an advocate of automatically reducing rents just because a unit has been vacant a while; and as discussed in a prior blog, I don’t recommend putting leasing bonuses on longstanding vacants.

Here’s what I do recommend:

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