by Donald Davidoff | May 29, 2014 12:00:00 AM
Most industries claim to be unique in the way they sell but in reality, if you really look at their processes, they aren’t very distinctive. However, the same is not true with the MFH industry. Selling multi-family rentals has important differences that sales associates should know about in order to be successful in the industry.
While apartment sales are to the consumer, traditional B2C sales models are not effective models to use. The apartment purchase decision has three components that make typical B2C models ineffective:
- It’s a very large expense.
- It’s a high-risk decision.
- It’s a very infrequent purchase.
The decision complexity associated with the MFH sale makes it more akin to B2B sales. Yet, as the table below highlights, MFH selling is unique compared to B2B as well:
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B2B Sales |
MFH Sales |
| Demand Creation
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In the B2B industry, salespeople often generate leads by creating a need for their products. They do this by exposing the problems their prospects have. This is done to motivate prospects to buy the solutions they are offering. The prospects can either buy the product or stay with the same problem. |
In MFH selling, leads are generated from prospects as a result of “structural demand” i.e. the prospect has undergone something that makes them need the product. In most cases, MFH tenants have no option of remaining with the status quo. They have to buy the product, even if it’s from someone else.
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| Professional Buyers
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Most B2B salespeople deal with buyers that are not the end users of the product. For example, an organization may have a procurement manager in charge of buying a solution that will be used by the IT department. This can create a disconnect on the experience of the end-users, who may not have been involved in the solution selection process.
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When it comes to MFH selling, the buyers are usually the end users of the product. Most people shop for apartments that they will live in. Therefore, they can better articulate their needs to the sales associate to find an apartment that will be ideal for them.
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| Multiple Stakeholders
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B2B sales teams work with multiple stakeholders within a single buyer. For example, the team may have to work with the end users, procurement division, and top management before closing the sale.
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In the MFH industry, the major stakeholder involved with the sales associate is the person looking to rent the apartment. Occasionally, close influencers like a family member or friend may be involved in the discussion. However, this is much more simple than the case with B2B selling.
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| Formal Source Selections
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In most cases, B2B salespeople have to respond to requests for proposals (RFPs) where their bids or quotes are subjected to a competitive selection process. Often, the sales team may be in communication with the buyers for a long time before finally getting to meet them for more formal discussions.
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With MFH selling, individual consumers contact sales associates to buy or request information. The consumers make individual decisions.
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| Negotiation
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In the B2B world, salespeople are expected to know how to negotiate prices and terms. Customers are always looking for the best deal, as there are likely to be other competing products in the industry. Therefore, salespeople need to offer the best price and terms to win customers.
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On the other hand, when dealing with prospects in the MFH industry, sales associates simply present the price and explain the terms of the lease. Typically, negotiations are rare in the MFH industry. Some companies may, however, allow negotiations in special occasions (e.g. during renewals).
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Selling MFH units is unique from B2B sales because of the circumstances leading to the search for the product, and the lack of an alternative to the problem that the prospect has. Moreover, leasing an apartment is typically more expensive than buying B2B products and has much more emotion involved in the decision-making process.