Why A Re-Think of Leasing Should Be Your 2019 Resolution
by Dom Beveridge | Jan 9, 2019 12:00:00 AM
In the closing weeks of 2018 I had the pleasure of interviewing 20 leaders in multifamily operations and technology about the outlook for 2019 and beyond. The content of those conversations will be discussed in detail on this site in a few weeks’ time, but in the meantime, one theme emerged that seems to be a 2019 priority for everybody: leasing.
That’s right folks, as the hangovers wear off and the post-holiday diets wear on, it’s normal to think about new year’s resolutions. And for many in multifamily, plans to re-vamp, re-focus and in many cases re-think their companies’ sales processes are top of the list. There are several different reasons for this. The now seemingly perennial question mark over whether the bull market on rents will add yet another year to its already historic trend provides a natural motivation for operators to get better at converting leads.
How technology is changing multifamily sales
One of the more interesting perspectives that I kept hearing was the influence of new technology on the leasing process. It’s influencing our methods in a couple of different ways: through the increasingly tech-savvy behavior of prospects and through the rise of Artificial Intelligence (AI).
Readers of this blog will be familiar with our curiosity about millennial renters, and - of course - their increasingly important successors, Gen Z. Not only are they more tech-savvy than previous generations, but they are also “digital natives”, with Gen Z, in particular, having been raised in a digital world and never having experienced the transition of services from the phone or paper-based versions that more mature renters remember.
The obvious consequence and indeed opportunity for multifamily is that operators need to deliver as much of the leasing process as possible in a self-service environment. Smart home technologies are making self-guided property tours a revenue-enhancing reality (even though multi-family operators are surprisingly reluctant to employ something that single family rental operators have already proven works). The ubiquity and increasing interactivity of online reviews also mean that prospects are doing more and more of their research online.
This has important implications for sales. Traditional “relationship-based” approaches to selling have become less and less effective as prospects arrive at the property already knowing most of what they need to know about the property. Their appetite to form a relationship with a salesperson is also lower, with younger buyers often preferring to avoid the personal interaction that used to be a necessary part of most sales.
Why the impact of AI may not be what you’re expecting
It seems clear that at some point AI will take an increasing role in the delivery of prospect and resident experiences. What is far less clear is the impact that it will have on functions like leasing. AI-driven leasing agents are already being tested by several operators at the front of the AI curve. While these technologies still feel some way away from the mainstream, it seems plausible that an increasing amount of the workload of leasing could be handled by AI in the not-too-distant future.
So what does that mean for sales as we head into 2019? A recent article in Forbes Magazine took an interesting perspective, arguing that as AI becomes more commonplace, people skills will become more critical. That makes a lot of sense - the changing tastes of consumers and the natural desire for efficiency should see as many leasing activities as possible handled as digital transactions.
Increasingly, customers and prospective customers will only seek to connect with property staff when they need to - and that will place a higher value on the interpersonal skills of property staff. Overly aggressive, scripted sales processes are already ineffective, and will become more so as prospects can answer ever more of their questions about your property on their mobile devices. The industry must develop leasing professionals who are skilled at asking questions and anticipating needs, rather than driving prospects through a process.
It didn’t surprise me that so many of the folks I spoke to over the last few weeks are focused on sales in 2019. With operators looking beyond physical amenities for ways to differentiate their properties, service innovations are more important than they have ever been. Leasing is usually the first service interaction that a resident has with a community, so it pays to make it as good as it can be. Make it your 2019 resolution!
We will be writing more on leasing performance and training in the coming weeks - subscribe to our blog to get the latest updates.