The Demand Solutions Blog

Is Your Sales Process Creating a "Buyer-Beware" Environment?

Posted by Donald Davidoff on Oct 25, 2018 4:40:37 PM

Fall is upon us. As usual for multifamily operators, Halloween preparations and pumpkin spice treats provide the backdrop to the main event - next year’s budget. As we grind through the seemingly endless iterations of revenue and cost numbers and reconciliation between properties and central teams, at some point the light will appear at the end of the tunnel. At that point, we will get to turn our attention not merely to the goals, but how we will achieve them.

We will bring 2018 to a close with a decade of growth behind us. We will enter 2019 facing what is now an annual question "is this going to be the year when things slow down?"  Of course, nobody knows the answer to that question, but there are good reasons to take our preparations for next year as an opportunity to revisit sales. A decade when demand has outstripped supply more often than not has delivered spectacular returns but in many cases, less-than-spectacular sales performance.

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Topics: Sales Coaching, property management, Leasing Performance

The Fill Down Function: A Fast Way to Repeat Excel Formulas

Posted by Donald Davidoff on Sep 12, 2018 9:48:49 AM

I’ve often had customers watch me work in an Excel sheet and ask about various shortcuts they see me use. So, this is the first in a series of occasional blogs on Excel tips and tricks I hope you find useful. 

If you’re not familiar with the “fill down” function, this is a great way to repeat a formula down a column. For example, let’s say that you have a row of unit types with the number of expiring leases and the number of renewals and you want to calculate the renewal rate as the number of renewals divided by the number expirations. In the example below, you can see that the studio rate is 58.3%. 

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Topics: Technology, property management

Ways to Maximize the Value of Your Renewal Policies

Posted by Jessica Mills on Jun 30, 2017 1:00:00 PM

Most companies wisely set renewal policies by month and by property. Certain times of the year may call for different strategies and you’ll want to consider property performance as part of the overall renewal strategy. However, it can be a quite subjective practice to set renewal parameters. There are a few guidelines to keep in mind when doing so:

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Topics: Renewals, Leasing Performance, property management

3 Keys to Retaining Multifamily Residents

Posted by Donald Davidoff on Sep 30, 2016 12:00:00 PM

Ask any group of multifamily operators what they worry about or what keeps them up at night and occupancy will be at the top of their lists. Every day an apartment sits empty represents a lost revenue opportunity that can never be recovered.

Being in an industry where demand is typically driven by things outside of their control, it is important for multifamily operators to focus on what they can control to keep occupancy rates optimized. Retaining residents is one of those areas of focus.

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Topics: Renewals, property management

Sales is Finally Starting to get the Attention of the C-suite

Posted by Donald Davidoff on Mar 10, 2015 6:00:00 PM

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:

  1. Treats the prospect as the intelligent, knowledgeable individual they are.
  2. Recognizes that our sales associate base is not going to change.
  3. 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.

Free Webinar: 5 Questions (And Answers) To Ensure Your Sales System Is Built For Success


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Topics: property management

Is Your Bonus System Hurting You?

Posted by Donald Davidoff on Sep 26, 2013 5:26:00 PM

Funny thing about bonus systems —you often get exactly what you incent. Now that doesn’t mean you get what you want. It means you get what you incent. So here are a couple of pet peeves of mine that I’'ve seen w.r.t. bonuses in multi-family that at best just waste money but at worst actually hurt our pricing and revenue management efforts:

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Topics: Revenue Management, apartment, property management, apartment operations, apartment pricing, multi-family housing, pricing and revenue management, financial performance

Inverted Leases at Renewal Time: A Big Challenge

Posted by Donald Davidoff on Sep 17, 2013 6:51:00 PM

It’s that time of the year when prices typically start going down. The good news is that with rent growth relatively strong over the past year, in general new rents are above expiring rents come renewal time. However, there are still times when rents are “inverted.”

With transparency of pricing on web sites, this can cause a real challenge. Existing residents see you offer no (or a small) increase and then take a look at the website where they see new pricing below what they’re currently paying. So what do you do?

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Topics: Revenue Management, apartment, property management, apartment pricing, pricing and revenue management

A Gathering of Pricers--Will I See you at ARM?

Posted by Donald Davidoff on Sep 3, 2013 10:43:00 AM

It’s been a while since I last blogged. Lots going on—crazy busy with clients, my younger daughter just started high school and we just sent my older daughter off to Princeton for her freshman year. Both of those milestones got me thinking about how I got to where I am.

Hard work, smarts and a good bit of luck certainly had a lot to do with it. But I think the most important thing for anyone in a “cognitive skill” career path is to be constantly learning. Learning from experience,  but more importantly learning from others—from “experts” we may not know and from colleagues (and competitors) who we do know. Which got me thinking about how important a role conferences have played in my career. I’ve met so many people who become not just business colleagues but also friends; and I’ve learned from many speakers I never would have otherwise encountered—people with ideas that changed how I viewed the world, my job and myself.

So if you’re serious about pricing in the multi-family industry, you simply have to go to the Apartment Revenue Management Conference. There are lots of pricing conferences and lots of multi-family housing conferences, but ARM is the only conference dedicated solely to practicing our art in our vertical. I’ll be there again and hope to see you. For those of you who might care, here’s what I’m expecting to do there:

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Topics: Revenue Management, apartment, property management, apartment pricing, multi-family housing, pricing and revenue management

Budgets are Looming

Posted by Donald Davidoff on Jul 9, 2013 1:27:00 PM

As we enter the “dog days” of summer, it’s time for pricers to look ahead. Things are usually good right now—we have a strong tailwind from seasonality so rents and occupancies are trending upward nicely. And with various summer vacations going on, the pressure isn’t quite as high as it usually is—most operators and executives are happy with the trends, and some of them aren’t even in the office today anyway.

But as anyone who’s been doing multi-family pricing for any length of time knows, beware the coming of the 4th quarter. For though the kingdom seems at peace, we know that ill winds are about to blow. Come September/October, two things will conspire as we face what is often our biggest enemy:  the BUDGET; and it’s almost equally evil sidekick, the operator’s bonus.

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Topics: Revenue Management, property management, apartment operations, apartment pricing, pricing and revenue management, financial performance

Channel Pricing Conflict and Customer Service

Posted by Donald Davidoff on Jun 17, 2013 10:45:00 PM

So this past week was an interesting one for travel. I was attending the Folk Alliance International’s conference in Toronto through Sunday. Nothing to do with multi-family housing—just an organization I’m Treasurer of and a chance listen to a lot of incredible music while getting very little sleep.

I was supposed to fly home Sunday evening, change out clothes and fly the next morning to the NAA Student Housing conference to be on a student housing pricing panel (probably a good topic for a future blog), then on to Rainmaker’s LRO User conference in Palos Verdes, CA. Side note: Bruce and Tammy sure know how to pick resorts—the Terrenea is just a fabulous resort with view of the Pacific Ocean and Catalina that are just spectacular.

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Topics: Pricing, Revenue Management, property management, apartment operations