by Paul R. Bergeron III
The exploding growth of social commerce sites such as Groupon and LivingSocial provide apartment marketers with new ideas.
While the “daily deal” Internet marketing strategy known as social commerce, offered by companies such as LivingSocial and Groupon, hasn’t yet taken hold widely in the apartment industry, apartment marketers at a recent conference session say the trend could be worth a try.
Speaking at the 2011 AIM Conference in May in Huntington Beach, Calif., LivingSocial Senior Director, Inside Sales, Greg Mazanec opened the floor for discussion among the hundreds of apartment Internet marketing professionals seeking ways this trendy consumer outreach program could benefit owners and residents.
LivingSocial and other similar companies offer discounts and deals on products and services to their subscribers through e-mail. There is no cost to subscribe. Among the most popular participating industries are restaurants, retail, entertainment, beauty services, travel and gift cards.
Though many attendees quickly dismissed the idea of using it toward rental rates because steep concessions such as half-price on the rent rate or “two months’ rent for the price of one” are not ideal for the multifamily industry’s bottom-line, the concept did excite attendees who were looking for new and creative ways to attract prospective residents and gain market advantage.
Mazanec provided multiple scenarios in which social commerce could play a role in marketing strategies for the multifamily housing industry. He suggested apartment owners or their communities could consider sponsoring deals. For instance, they could attach the phrase, “Brought to you by Rolling Hills Apartments” to a social commerce offer of $40 worth of dining at a nearby, popular establishment for $20.
The business model of LivingSocial and Groupon is based on a social media approach where consumers (such as residents) share their daily deals with their families and friends. The consumer’s incentive to participate, in many cases, is to persuade three or more of their friends to sign up for the deal, thereby giving the consumer their deal for free or at a greatly reduced cost.
Mazanec said LivingSocial’s social commerce deals are negotiated on a case-by-case basis with his sales staff, and creatively formulating the deal is encouraged. He said he finds that more creative deals often receive greater response from consumers. Social commerce deals are typically offered for a limited time or can “sell out” to a predetermined maximum number of participating consumers, potentially helping to create an emotional urgency in the consumer that many marketers aim to achieve.
Apartment owners or communities also could try to provide a sense of value for renting at their community by making a deal exclusive only to their current, new or prospective residents, Mazanec said. Also suggested was for owners to extend these deals to current renters during the lease renewal period (again, reminding them of value) or to create deals with service providers for residents who sign new leases, with offers for things such as moving-company expenses or to housewares and linens stores to help furnish their new apartment homes.
Another suggestion was to offer LivingSocial “deal bucks”—essentially a gift card to use on LivingSocial purchases—as a good will gesture, leasing incentive, or any other time a gift card might come in handy.
After launching in July 2009 and growing to serve 26 million e-mail subscribers, with hundreds of sales staff selling to more than 240 markets across 12 countries, LivingSocial’s social commerce strategy is evolving daily as this new popular marketing concept takes shape, Mazanec said. While he wasn’t involved with a Bozzuto deal offer that was rejected last year, for instance (see “What’s Your (Daily) Deal” on page 62), he said the company is always experimenting to expand the sphere of businesses that can benefit from its platform.
Mazanec said LivingSocial reviews each promotion to ensure that it will be a win-win for both the consumer and the merchant.
“We have found that our consumers are most engaged by unique opportunities to explore their city and discover new experiences,” Mazanec said. “If I were a company looking to enter social commerce, I’d aim to be creative, leveraging assets such as ground-level retail, parking or amenities to craft an eye-catching promotion that social commerce consumers would be eager to buy and share. Our platform is very transparent and I’d suggest anyone considering a promotion subscribe or regularly visit the site to generate ideas that might align with their marketing goals.”
There are an estimated 500 companies in the “deal-of-the-day” business, including 100 in the United States, according to Wikipedia. LivingSocial and Groupon are considered the dominant players.
Paul R. Bergeron III is NAA’s Director of Communications. He can be reached at 703/797-0606.