The Demand Solutions Blog

Thinking Differently About Lease Trade-Outs in Today's Market

Posted by Trachelle Spencer on July 14, 2020

Would you try to build a puzzle with just one piece? You already know the answer is no, so why would you try to make pricing decisions based on just one data point? With puzzles, the picture doesn't start to take shape until you have joined multiple pieces together. The same is true with your pricing decisions.

Too often, we see companies making pricing adjustments solely based on prior rents, often referred to as "trade-outs." When you focus on just one data point (the "trade-out"), you fail to see the full picture. In some cases, users over-ride their pricing and revenue management (PRM) system to protect the trade-out. In this post, I'll explain why that's riskier than you may realize, especially in today’s market.

To be clear, I am not saying that prior rents are not important. They are: I have often referred to them as the "canary in the coal mine," but they don't tell the full story and should not be used exclusively to determine the success of pricing. 

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Topics: Revenue Management, Leasing, COVID-19

The Coming Dichotomy of Multifamily Leasing

Posted by Dom Beveridge on March 02, 2020

Where I come from (the UK), the English language is peppered with curious variations. One of the strangest is the perpetual controversy over the pronunciation of the word "scone." Everybody pronounces the vowel either as "own" or "on." Which side of the divide that people fall on follows no clear regional or socio-economic pattern. People adopt one pronunciation or the other and never change thereafter. And everybody is convinced that people who pronounce it the other way are entirely wrong to do so.

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Topics: Multifamily Technology, Leasing

The Surprising Persistence of Old-School Multifamily Selling

Posted by Donald Davidoff on January 30, 2020

A couple of months ago, I read a blog about multifamily sales. It caught my attention because the title referred to closing as "the bottom line." Those of you who read this blog frequently know that not only do we regularly write about how to improve sales performance, but we also do so from a contemporary point of view based on science and data behind successful sales/leasing.   

Our views are influenced by the seminal research by Matthew Dixon and Brent Adamson in the Challenger Sale, as well as anthropological research on how prospects actually buy. The hook (in the blog) of closing as the bottom line struck me as being completely out of sync with this modern approach. It was reminiscent of the "always be closing" approach that influences many people's idea of sales. This approach - brilliantly satirized in Glengarry Glen Ross - has been clearly debunked by Dixon and Adamson as well as other authors (e.g. Daniel Pink) in favor of much more prospect-centered approaches.

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Topics: Leasing

NMHC Annual 2020: When Even White Shirts Get Disrupted

Posted by Dom Beveridge on January 23, 2020

It’s not often that one finds oneself struggling to stay warm in Florida, but it’s been happening this week in Orlando, where we’ve been these last couple of days, along with a few thousand of our closest friends at the 2020 NMHC annual meeting.  

Among the gathered throng of multifamily dealmakers huddled (mostly indoors to avoid the cold) one could not help but notice a marked break from the previously mandatory uniform of grey pants, white shirt and blue blazer.  Many attendees commented on the degree of self-expression in the clothing (we’re talking blue, and even the occasional checkered, shirts) and the apparent disruption of a long-established order. But it was a different type of disruption that grabbed at least some of the attention this week.

About that tipping point

On Wednesday we were treated to a rapid-fire panel featuring luminaries of three technologies that have more potential than anything to transform multifamily operations. A succession of providers of AI leasing agents; smart home technologies and self-tour came to the stage to answer questions from operators.  The dialogue - although too quick to do much more than whet the appetite for further research and discussion - touched on some themes to which our industry should be paying attention.

As Rick Haughey (NMHC’s VP of Industry Technology Initiatives) reminded us at the start of the session, our industry has moved “from laggard to leader” in proptech.  A year ago in our 20 for ‘20 white paper, we noted that the industry was at a technology tipping point, largely because of those three technologies.  What’s impressive is the progress that has been made in 12 months.

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Topics: Multifamily Technology, Leasing, Industry Events

Are We Looking at Property Differentiation the Wrong Way?

Posted by Trachelle Spencer on July 02, 2019

I recently read - with interest - the coverage of NMHC's recent spring Board of Directors meeting in Chicago. What really caught my eye was a talk entitled "Seven Ways to Succeed in the Future of Real Estate," given by Dror Poleg, the founder of Rethinking.RE. The presentation discussed how technology is redefining real estate, shifting value from the physical space to the services provided.

In this environment, the logic goes, the customer, rather than the property, increasingly becomes the asset of your business. Space becomes a service and competitors become your partners. From this radical view of an increasingly inverted world, the idea of the customer becoming the asset resonated with me, based on my own experience in the multifamily industry.

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Topics: Revenue Management, Leasing

NAA Apartmentalize:  3 Killer Pricing and Marketing Tactics

Posted by Trachelle Spencer on June 18, 2019

It's June, the sun is out (mostly) here in Denver, and like all locals involved in the multifamily industry, I'm looking forward to welcoming a few thousand esteemed colleagues to my hometown for next week's NAA Apartmentalize conference.

This year I'm excited not only because the show is in Colorado, but because I'm taking part in what promises to be an excellent panel, discussing one of my favorite topics: the interplay of pricing, lead generation and sales.  I will be joined for this discussion (which takes place at 5 pm on Thursday, June 27) by my friends John Reardon of Beacon Communities and David Dear of Equity Residential.

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Topics: Revenue Management, Leasing, Industry Events

The Research Is In On Multifamily Lead Conversions

Posted by Donald Davidoff on May 21, 2019

If - like me - you're in the business of demand optimization, you'll know that it's been getting harder and harder to talk about any trend in multifamily without first referencing the ten years of unprecedented growth that the industry has been experiencing.  For as long as anyone can remember, residents have been relatively plentiful. That's great news for operators and investors, but a growth environment can paper over cracks in sales and marketing performance.

This inescapable trend was on our minds when we embarked on a new study of lead conversion tactics.  A couple of weeks ago at the AIM Conference, we published a new white paper "Converting Leads to Leases." It is an update to a study that we had run previously in 2014 and 2017.  

The results of the first study were instructive, presenting a call-to-action for marketers and operators.  They highlighted the extent to which operators were failing to implement some of the most effective and least expensive tactics for increasing lead conversion.  We updated the data nearly three years later with an identical study, which yielded mostly similar results. The 2019 paper reproduces the methodology from those studies to report back on how the multifamily marketing has progressed in the last five years. 

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Topics: Leasing

Floor Plans: Why Too Much Choice Can Be Worse Than Too Little

Posted by Trachelle Spencer on May 01, 2019

A few weeks ago we discussed the experience of leasing up big projects and the importance of setting up unit type groupings in the pricing & revenue management (PRM) system. In that article I noted that too many operators neglect unit type setup, creating categories that make no more sense to a prospect than a shoe store that grouped all of its shoes by size alone.

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Topics: Revenue Management, Leasing

Three Top Multifamily Training Priorities for 2019

Posted by Donald Davidoff on April 25, 2019

As we researched 20 for '20 - our white paper on the outlook for multifamily based on 20 interviews with senior executives - we were struck by the intense competition for talent in the industry. Low unemployment rates and record industry growth have conspired to make both recruitment and retention extremely challenging.

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Topics: Leasing

3 Reasons Why Multifamily Must Adopt Self-Show

Posted by Donald Davidoff on April 17, 2019

As we get near the Apartment Innovation and Marketing (AIM) conference, I wanted to take a moment to discuss an innovation from single-family rentals (SFR) that I believe should be getting more attention from multifamily housing (MFH) operators.

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Topics: Multifamily Trends, Multifamily Technology, Leasing