Just like in any other business, marketing in multifamily has core groups of people to focus your marketing efforts on. One of these core groups is current residents.
A well-known rule of marketing is that it is easier to sell to an existing customer than to a new customer. For starters, the existing customer is familiar with your products, customer service and pricing.
Another well know rule of multifamily operations is that higher lease renewal rates save time and money. A lease renewal reduces marketing expense and vacancy loss. Also, retaining an existing resident substantially reduces make-ready costs, whereas, there may be some interior items addressed at renewal, the extended make-ready process is postponed until such time as there is a move out.
Following are five points of contact, or marketing methods (or touch points) to implement when marketing to existing customers to obtain lease renewals. Are you using all five?
In Person. 'Face-to-face is always the best option to obtain a renewal. Personal contact that includes eye contact, verbal language and body language, an opportunity to address any concerns in real-time all lead to a higher probability of obtaining the renewal. In fact, the four remaining methods noted represent methods for gaining that face-to-face meeting.
Telephone. While it seems that fewer people pick up their phone for actual telephone conversations most will listen to their voice mail. This is an opportunity to use a scripted "commercial" to present the benefits of renewing now. Consider being sent to voice mail as an opportunity to present a 30-60 second sales presentation for renewing their lease.
Email. Direct email marketing research tells us that people often do not make a buying decision via email until after the fifth (and sometime seventh) email contact. This tells us that a one-and-done email has no effect on the intended outcome we desire; a lease renewal. Consider email as an additional thread in the quilt you are weaving towards increasing renewal rates.
Text. Text messaging is not as age specific as you may believe. Even old people (like me) read text. Like with telephone calls, you may not get a return text, but sending the text assures that you have obtained yet another point of contact with your resident.
Snail Mail. Regular U.S. Postal mail delivery is often overlooked, this is yet another point of contact that rounds out the methods for contacting current residents. After all, you know their mailing address. Even though people are too busy to pick up their phone, answer a voice mail or text, they still look at their mail. Post card mailings may costs .50 cents to $1 each. The return on investment is very straight forward as you can correlate the increase in renewals with a certain percentage attributed to direct mail.
Post card mailings may seem generic as there isn't any personal information on the post card other than the name and mailing address of the recipient. Yet the message is very personal in that it invites the resident to stop by the office for a beverage and sign their lease renewal. Like with concessions, you will have to test various messages to see which one obtains the best response rate.
These methods, when applied collectively, are like making sure you are well prepared for cold weather; you start out with a sweater and hat, but just to be safe, you pack an umbrella, gloves and a scarf in case the weather turns harsh (such as if new competition comes in). Sure, it could be good weather with renewals just jumping into your office, but you can't assume this to be true. Best to be prepared for all-weather events.
Mr. Wilhoit is the author of two books: How To Read A Rent Roll: A Guide to Understanding Rental Income and Multifamily Insight Vol 1 - How to Acquire Wealth Through Buying the Right Multifamily Assets in the Right Markets. Multifamily Insight Vol 2 is set for release in 2015.
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