By Paul R. Bergeron III
For third-party management companies working to sell their owner-clients on the latest technology, frequent and open communication is key.
For third-party management companies working to sell their owner-clients on the latest technology, frequent and open communication is key.
Fee-based apartment management company executives face financial, operational and communications challenges when dealing with the needs and characteristics of a wide range of clients and community types.
An expert panel of marketing executives responded to questions about these situations, mostly focusing on management communications and how to execute effective marketing strategies during a 65-minute discussion moderated by Dennis Smillie, President, Multifamily Solutions, at the Apartment Internet Marketing (AIM) Conference in Huntington Beach, Calif., in April.
Following are highlights:
Q: How do today’s owners compare to those from a few years ago?
Duke: Owner-clients today want as much transparency as renters when dealing with their fee-management company. A lot of them want to know everything about everything that is going on. There is much more interaction between us and the clients about so many more things now than before.
Staciokas: Technology keeps changing and improving. Owners want their fee-management partner to use more technology, but they don’t want to pay for it. As fee managers, we have to be better salespeople in terms of convincing them to invest in it. Typically, they only want to pay for results.
Q: How are expectations established between management companies and client-owners?
Staciokas: When you first sit down with the client, you have to discuss and determine their goals. For example, is the client looking to increase occupancy or are they focusing on trying to cut costs? Once this is determined, you then react and plan accordingly.
Rayford: It’s important that you communicate with client-owners regularly. What they tell you they want the first time you meet with them is likely to change six months later. And because areas such as online marketing are changing everyday—we all have so much to learn and keep up on—we take every opportunity to educate our clients about social media and search-engine marketing, for example, during every one of our regularly scheduled meetings. From fan pages to hits to lease conversion rates: How do we expect our clients to always know about and understand this? When making a pitch to try something new, it’s important to offer them a testimony or an example of success and show them the results.
Q: With managing multiple clients’ communities all at the same time,
how do you determine which sites get priority?
Staciokas: Typically, lease-ups and rehabs get the most attention. The rest of the list often is based on occupancy levels. We look at weekly reports and determine which communities are most in need of attention and they end up near the top of our hot list.
Q: How does your company’s onsite staff deal with apartment ratings sites and various social media venues in terms of response and general interaction?
Duke: Our company is developing protocol about how to communicate on these sites. We’ve all seen lately through examples in American culture and the media, when you post something, once it’s out there, it’s out there forever. You can’t take it back. So you must ask yourself, ‘Do you trust your staff to use it properly?’ Having rules in place is critical. We feel that hiring Gen Y staff to do social media communications is effective because they are the ones who are interested in sitting in front of a computer, logged into our Facebook or Twitter accounts all day, and following and participating in these discussions. One way to fill this staffing need without adding to the salary line is to consider moving one leasing professional out of that position and into the role of social media communicator.
Staciokas: To engage in social media, we first had to get upper-level executives’ buy-in. We then partnered with a vendor that monitors and responds to posts on our 120 social media accounts. It’s still new, but I think it can work. As for convincing our clients to invest in social media, we now include a specific budget line for social media. This way, if owners resist spending money on something they might consider “new” or “extra,” you can show them that the costs are accounted for on a specific budget line. We put ours in the resident retention category. We’re not looking to use social media to drive traffic, but want social media to help us keep our current residents.
Editor’s note: At this point, Smillie asked the audience how many account for social media specifically as a line-item in the budget. About four out of the 200 session attendees raised their hands. Smillie then suggested that by including social media specifically in the budget, the fee management company was proactively “going on the offensive to support it,” rather than having to defend spending for something that isn’t budgeted.
Q: How do today’s client-owners react when reading negative online publicity on comment boards, for example?
Duke: Our owner-clients understand that negative comments typically represent just one in 500 voices out there, and it comes from a resident who is willing to take the time to comment about the property. Our clients are smart enough to take it with a grain of salt. When our onsite staff reads negative comments online, we respond by asking the resident, “What aspect of our behavior needs to change?” We find that the criticisms they usually post don’t apply globally within our company or within that community. With a lot of these complaints, it’s about dealing with one person about one thing. Our staff comments back, “Thank you for letting us know. We’d love to talk to you about this.” A message written like this sets the right tone. With other prospective renters reading this dialogue, more times than not, this response will win over the general public and show that we care enough to deal with situations.
Rayford: Absolutely we have to be proactive in communicating with our owner clients. We tell them that they cannot be afraid of opinions. I’ve read that something like half of the Internet users today get online to share their opinions.
Q: Some apartment owners have said, “Print is dead.” Is it?
Staciokas: Twenty-five percent of our communities use online marketing only. We feel in most cases a mix of media is better. What we do know is that you can’t make a broad-based decision that excludes one media or another for an entire portfolio. You have to work with your service partners to determine what marketing methods will work best for you in certain situations for certain communities.
Rayford: For us, Craigslist is outperforming the online listings that we’re paying for. The results are absolutely alarming. Craigslist is delivering quantifiable leases—not just leads—in all of our markets—California, Arizona and Hawaii. Therefore, 75 percent of our communities use online marketing only. We do daily postings on Craigslist—two or three times per day. We track the ads and determine when the peak traffic times are. Taglines for Craigslist must be creative, entertaining and enticing for them to work. For whatever we use or whatever we try, we feel that 90 days is a good barometer for determining whether a marketing campaign is working.
Duke: It depends where the community is located. On the West Coast, about 80 percent to 90 percent of the residents we have living in urban core areas such as San Francisco, San Jose, Los Angeles and Orange County found us online. For suburban markets and “blue-collar” markets, there is more of a print following, so we use a blend.
As for Craigslist, many of its users want to think that they are dealing with a private condo owner because they think that there is where they will get the better deals compared to renting from larger apartment owners. When they do click on our Craigslist ads, we try to take advantage of the opportunity to explain to them that living in a professionally managed apartment building is a better situation than living in somebody’s condo.
Q: Do you offer printed marketing collateral in the leasing office?
Staciokas: We’ve minimized our use of printed brochures. In some cases, we will print floorplans in our office to hand out or we display the floorplans on a flat-panel screen.
Rayford: We believe that leasing staff should have something to give the prospective residents as a takeaway. We also ask the prospects, “How would you prefer that we contact you?” and 75 percent say e-mail. So we’ll send them an e-brochure, which we also have on our website.
Duke: With marketing collateral, it really comes down to a left brain/right brain issue. There’s a balance between print and non-print. I believe that you should have something glossy and pretty to give them because that helps appeal to that side of the brain.
What’s also interesting and worth noting is that we’re converting 37 percent of our online guest cards to leases versus converting only 12 percent of our paper guest cards.
Paul R. Bergeron III is NAA’s Director of Communications. He can be reached at 703/797-0606 or paul@naahq.org.
As For Property Management Software Trends…
Q: Are your communities using yield management software?
Duke: I began my career in this industry in the 1980s. When yield management was first introduced a few years ago, I was an opponent of it. For me, the language and strategy behind, “How do you price the units?” was part of our everyday vernacular in the leasing office.
But today, I find that yield management software technology is more advanced. It’s phenomenal. I’ve converted. Yield management today looks at so many variables that we hadn’t thought of or considered before in the ‘old days.’ I see a steady progression toward the industry using it overall. The software companies have taken the brain-fry out of it. It’s more understandable and transparent. It’s not something like before when you felt like the secrets were hidden in a little black box.
Our assets that are using it are outperforming those that aren’t—even when compared to other communities owned by our clients in that same submarket. Overall, we’re getting an approximately 3 percent rent revenue lift.
When recommending yield management to our client-owners, we ask the software vendors to speak to the product’s benefits because they can explain its effectiveness in much clearer terms.
Staciokas: We beta-tested it on eight communities and it performed well. We now use it at 35 communities overall and see as much as a 4 percent rent lift at our communities. When used at communities in markets that aren’t performing well—ones where rents are dropping—the drop is less at those with yield management software compared to those without it.
Q: What is the trend for your residents paying rent online?
Staciokas: The trend continues to move up and today we see 15 percent of our residents paying their rent online. We’re encouraging them to do it for efficiency’s sake. We find that the likelihood to pay rent online is not based on resident type, but rather on how effective the onsite manager is at encouraging online rent payment during the leasing process and the move-in stage.
Rayford: The number of our renters paying online rises each month. To pay online, the resident has to visit the community website, which is a good thing, because once they are there, we can communicate with them about other things.
Duke: We’re seeing 14 percent of our residents paying online.
Q: How difficult is it for multiple staff members to deal with multiple property management software systems over multiple communities or clients?
Rayford: There is no such thing as a seamless transition. No matter what any company tells you, there still has to be a human element to guide the transition.- P.B.