The best part about having a large family is that you suddenly have an abundance of free labor.
Hold on—I’m now getting word that this has not been the case since “The Grapes of Wrath.”
Regardless, I think most people would agree that it’s nice to have people (a young child, your ailing grandmother, etc.) work for you—especially when it’s voluntary. This is certainly the case in the apartment industry.
During August 21st’s Webinar Wednesday, “How To Make Residents Work For You—Resident Referral Ideas That Work,” Webinar moderator Stephanie Graves explained why getting resident referrals is key.
With more than 20 years’ experience in building, managing and operating apartments, Graves, Senior Vice President of Multifamily Operations for Asset Plus Companies, says she has reduced advertising costs by 22 percent on average by effectively managing referrals.
In order to do so, the first step is to build a “referral culture.” First and foremost, you must provide a product of which your residents can be proud, because they have to be able to remain friends with the people they refer. It’s super awkward to invite Bridget out for drinks when she’s dealing with a bad case of asbestos. Thanks for the referral!
Graves says your referral program should be mentioned on every piece of advertising you have—whether it’s a section on your website, a sticker on every flyer or a stamp on the back of a business card. “According to one study, people must see a message eight times before they act on it, so you have to be everywhere,” Graves says.
You hear that, ladies? Asking for the trash to be taken out seven times ain’t gonna cut it.
Although a rewards program may seem costly, it’s worth it on the back end. You’re not only getting a new lease, but the resident who made the referral is now likely to stay longer now that they have a friend who lives in the same community. We can all blame “Friends” for this.
While the majority of Webinar participants said they offer free rent (or some sort of rent discount) for a resident referral, Graves encourages everyone to move away from this practice.
“When you give away free rent, it is a silent appreciation that is only experienced by the resident,” she says. “It’s an internal credit that goes on their ledger but it’s not tangible.”
Additionally, Graves warns that in many states, if you give a resident more than $50, it must be accompanied by an I-9 form for tax purposes.
Instead, Graves suggests offering incentives such as reserved parking, a housecleaning service, a free garage/carport (for a period of time), a gift card or a “fix-it” coupon for two hours of work by an onsite maintenance technician (a great option, Graves says, because the burden of redeeming the coupon is on the resident). Apartment upgrades, such as a new faucet or ceiling fan, are a great way to reward residents while also improving the value of the asset.
No matter the incentive, Graves says a clear resident-referral program outline should be in place, and a resident referral form should always be signed by both the referring and referred resident.
And last, but not least, always show your gratitude.
Thank you, Grandma, for working your fingers to the bone to knit me that scarf.
Learn more about Webinar Wednesdays (hosted by NAAEI, Apartment All Stars and Multifamily Insiders), and register for September 4th’s “Get Your Wheels Turning! How To: Apply and Measure the “Hub-and-Spoke” Model of Online Marketing to Apartment Marketing” today.