Doug Miller 

I saw a discussion group regarding the Net Promoter Score (NPS). Like many in the CRM field, I question the value of Fred Reichheld’s highly disputed NPS Harvard Business Review article “The Only Number You Need to Know.”

SatisFacts is excited to announce the 2010 national resident satisfaction award winners. Achieving a Superior or Exceptional award says that the company’s leadership and team members are focused on the actionable best practices that impact satisfaction and retention…and their residents are validating that point! Congrats to the award winners!

I started SatisFacts, and adore what I do, for a reason…it relates to my passion for caring, dedication and service…and this passion has to do with how I was raised and my DNA. I have always been very sensitive to service. I am inspired when I interact with someone who really cares about how they perform for you. My reaction is 180 degrees different when I deal with someone who just does not care. My view is that if you are being paid to do a job, autograph your work with excellence.

I read an intriguing point in a discussion about revenue management: “Turn cost is a factor, but it is also a sunk cost unless you wish to favor renewals over new leases.” Ah, “unless” you favor protecting your existing revenue stream! This is a huge issue…leasing/marketing vs. retention. Which should be the priority...and why?

I am sure we are all blown away regularly by how some businesses operate. I scratch my head…it’s clear not everyone is really trying to take care of clients, create positive experiences, or improve performance. I had to share several recent experiences.

Everyone is plowing through their 2011 budgets. How can we reduce costs? How can we boost income (or stop the bleeding)? How can we make the numbers work? How are we going to grow NOI and asset value for our client, the owner of the asset? For years we have talked about the dramatic impact turnover has on the bottom line. When we quote that each move-out costs over $4,000, sometimes folks question the figure…until they see how we calculate it.

Jen Piccotti and I presented the above title at NAA’s 2010 Education Conference & Exposition in June. Then, last Thursday I presented a similar seminar at the Central Virginia Apartment Association’s annual conference in Richmond. What was so exciting to me was what a property manager shared with me after my seminar was done.

I’d like to take a moment to shift gears and share with you the side of our industry that resonates very powerfully with me. It’s something that can often be pushed to the side in the course of busy and unpredictable days, but it is literally the heart and soul of what we do every day.

Attention to retention has increased as the rental pool has gotten smaller and smaller, as competitive housing has become more prevalent (condos, single family homes), as units are sitting vacant longer, and as concessions have grown. Because there are not as many prospective residents entering the front door and the costs associated with every move-out has grown to astronomical levels, owners and managers have become more and more focused on how each team member can personally “close the back door” to protect cash flow, net operating income (NOI) and asset value.

For years I have obnoxiously (lol) been ranting about the need to make re-sales/retention minimally as important as sales/leasing. Over the last year or so I have been seeing more and more articles, blogs and discussion groups about retention. To see so many online discussions about turnover rates, improved retention, a new focus on service and the like is very exciting to me for a number of reasons.

Great service matters. And the starting point is, and always will be, the people side. I was reminded this week of two very different experiences I had dining out. While the food industry is different…like multifamily, service really does matter. We can all think of restaurants we will never go to again because it took an hour to get an entrée – excuse the pun, but the experience put a “bad taste” in our mouths, and we choose to go elsewhere the next time.

New social media stats from SatisFacts...Resident Retention: Dare I Say It - Don't Believe the Hype.

Just read a posting "What Makes Residents Renew"; this included discussing resident events to help with retention. I am actually going to share my reply here.

The consistently incredible service and attitude I experience when I visit my local Lowe’s hardware store has earned my loyalty. What do they do that is so special? What is the impact? Does your staff have a world class attitude and deliver award winning service? Given today’s challenging market, can you afford to not be providing the greatest level of service ever? No, not given the huge impact turnover has on NOI and asset value...great service protects your revenue!

I have seen a number of discussion group postings lately about ideas for the Halloween season – things to do for residents. Being the contrarian that I am, please take a look at the scary idea I have for property teams during the season (actually year-round).

Retention Question: Is the industry's focus on leasing/marketing versus retention in proper balance? I propose that if one really wants to boost performance, even in today's uber-challenging markets, one must adjust focus!

Exceptional, out of the box service by a bellman last week reminded me of the keys to improving service and reducing controllable turnover - hiring right and maintaining a proper focus. By having the right people focus on what matters most to your residents…the impact on NOI and asset value is clear as you will see costly, controllable turnover drop.

Those who know me are aware that I am passionate about trying to help shift the industry into making residents the top priority - more important than prospects. While some view me as a “contrarian” (I can’t disagree), there is a reason behind my passion and points - because there is a clear need for the industry to adjust its focus so as to improve performance for who is really #1 - the owner of the asset. Be prepared to be blown away by the performance of a long term client - and how they are growing asset value by tens of millions of dollars during the economic downturn.

Around every corner I hear the gloom and doom. Whether it’s properties claiming they can’t compete with the concessions being offered down the street, or crazy surveys claiming that 96% of all residents will be moving this year...Despite challenging market conditions and economic times, a focus on what matters to residents can lead to increased retention - it starts with managing "perceived value."

It’s time to re-program the way your staffs think about spring and what the priorities are. With turnover costs at an all-time high of $4500 per move-out and a continually declining applicant pool because of shifts to roommate and condo/home/shadow market rentals, the status quo of focusing on new leases is not a sound business decision. No one can afford to stand still in regards to existing residents. They are the ones who will enable the property to maintain net operating income and asset value. That said, we are not entering the “Spring Leasing Season.” We are entering the “Spring Lease Expiration Season,” which begs the question, what matters most to your residents?

We are all reminded daily that customer service "ain't rocket science." I want to share something that happened when one of my sons was trying to get his new cell phone set up. I purchased my sons and me new Blackberry’s. The AT&T store took wonderful care of me. They overnighted my older son's phone to his college dorm in downtown Philly, and he was instructed to go to the AT&T store four blocks away to have the data from his old phone transferred and get all set up...

The recession has begun and we are facing uncertain times. Most agree this recession is unique due to the severity, derivation and the significant impact it has already had. Job losses are mounting, with most losses being in the renter demographic. Multifamily is feeling the effects already not only due to job loss, but also the severe drop in confidence due to the uncertainty many feel. Looking at the results from the nearly half a million units we have conducted research for this year, it is clear residents are evaluating value and this is impacting their renewal plans. Due to the uncertainty about jobs, income and raises, more residents are pondering “moving down” to lower expenses.