A article in USA Today leading the money section on October 28 introduced us to the powerful marketing mantra for 2010, simple is better. The graphic which leads the article asks via multiple choice, how many ingredients are in a scoop of Haagen-Daz's Simple 5 coffee ice cream. The answer is five.
If 2009 effective marketing message was about buying stuff cheap then this new trend will most likely build on that foundation. For example, my co-speaker on the Apartment All Star Tour is Lisa Trosien. All year she has been reminding us to follow the trends of major brands such as Subway with the $5 footlong. Leave it to Lisa to even sing the jingle on stage. This is a perfect example of trying to sell twelve inches of sandwich pretty cheap and keeping things simple by not making the pricing complicated.
When you keep things simple, you create a tangible reason to buy a product or service. For starters, it is easier to understand. Next, it helps build confidence that nothing is hidden or unexpected. This is what you get, just 5 ingredients that you can pronounce. A strong message in a food industry that has mass production.
I was working with a client today trying to work on removing reasons why someone would not rent from us. One thing is that it is a complicated formula to figure out what you have to do and what you owe if you break your lease agreement. Sure, the formula seemed like a good idea at the time, after all, we don't want them breaking their leases. Yet now, in a economy where job growth is non existent, people want to know what the obligation will be if they get laid off. We decided to roll back to yesteryear where we asked for 60 days notice, one months rent cancel fee and payback their concession. Still some meaningful money, but much easier to understand.
What else should we simplify?
Friday, October 30, 2009
Wednesday, October 28, 2009
A Year Without Lease Renewals?
Can you imagine the ability to take lease renewals off your long list of things to do? That is my challenge for the apartment industry. My personal recession recovery plan and if we all jump on board we just might save the world of apartment leasing from total meltdown.
The theory: For the next 12 months, we will be writing leases that will more than likely be loaded up with a rent decrease and in many markets, an up front concession. If we allow that lease to expire in the next 12 - 24 months we might just find ourselves having to do it again. Seems like the perfect reason to avoid expirations for the next two years.
How do we do this? Sell a longer term lease of 15 - 24 months. The plan benefits the owner because we can decrease turn costs or more bleeding economic vacancy loss. And for the renter, they are locked into a rental rate for a longer term. For most of my 21 year career, this has not been a great idea because we will miss the opportunity to grow rent. However, very few years presented enough of a rent increase to make the turnover costs worth it. Owners push rents in increase the value of the asset.
If we face the facts, very few markets will see much rent growth in the next 12 - 20 months. If we can stabilize and stop the burn we have a shot at improving by the end of 2011. All together now, take a breath and say STABILIZE. Lock in residents for longer terms and avoid having to offer your market rent and concessions to renewals. Hopefully with less vacancy you will reduce the concessions, supply will decrease and we will start to see rent increase before the next presidential election.
The theory: For the next 12 months, we will be writing leases that will more than likely be loaded up with a rent decrease and in many markets, an up front concession. If we allow that lease to expire in the next 12 - 24 months we might just find ourselves having to do it again. Seems like the perfect reason to avoid expirations for the next two years.
How do we do this? Sell a longer term lease of 15 - 24 months. The plan benefits the owner because we can decrease turn costs or more bleeding economic vacancy loss. And for the renter, they are locked into a rental rate for a longer term. For most of my 21 year career, this has not been a great idea because we will miss the opportunity to grow rent. However, very few years presented enough of a rent increase to make the turnover costs worth it. Owners push rents in increase the value of the asset.
If we face the facts, very few markets will see much rent growth in the next 12 - 20 months. If we can stabilize and stop the burn we have a shot at improving by the end of 2011. All together now, take a breath and say STABILIZE. Lock in residents for longer terms and avoid having to offer your market rent and concessions to renewals. Hopefully with less vacancy you will reduce the concessions, supply will decrease and we will start to see rent increase before the next presidential election.
My Winter Sales Strategy
I'm going to a fancy event in November. You know the kind, where you have more fun getting ready for the event than you actually have at the event. Being the fashionista that I personally express myself to be, I need the perfect dress. After all, we dress for women, not men, and women will notice what other women are wearing at an event like this.
In years past, I have started my search a few weeks prior to the party. This year money is tight, I started a few months early giving myself plenty of time to really dig hard for something on sale. As luck would have it, I found an amazing dress on my first shopping trip. I figured there may be something better to discover but I would go ahead and buy this one and continue shopping. If I found something better I would simply return the first one I bought.
Well, the event is approaching and I never took another shopping trip. I guess when I found something I liked, I stopped looking. I have better things to do with my time like shop for shoes!
My winter strategy is pretty simple, close traffic like they need it tomorrow. Too many Leasing Consultants get lazy and do not put their best foot forward when someone comes in the door or calls and they do not need the apartment for 3-6 months. I have even heard a sigh come out of their mouths and the customer can tell that this sales person only wants the quick sale. So if you are so good at that quick sale, do it. Why would you treat this customer any other way? They need a apartment and once you show them what they are looking for, you have the ability to stop their shopping efforts.
Now here is the punchline, remember that I started shopping for my dress early because I wanted time to shop the sales? Well, I paid full price. Maybe your customer will too when you truly sell them what they want.
In years past, I have started my search a few weeks prior to the party. This year money is tight, I started a few months early giving myself plenty of time to really dig hard for something on sale. As luck would have it, I found an amazing dress on my first shopping trip. I figured there may be something better to discover but I would go ahead and buy this one and continue shopping. If I found something better I would simply return the first one I bought.
Well, the event is approaching and I never took another shopping trip. I guess when I found something I liked, I stopped looking. I have better things to do with my time like shop for shoes!
My winter strategy is pretty simple, close traffic like they need it tomorrow. Too many Leasing Consultants get lazy and do not put their best foot forward when someone comes in the door or calls and they do not need the apartment for 3-6 months. I have even heard a sigh come out of their mouths and the customer can tell that this sales person only wants the quick sale. So if you are so good at that quick sale, do it. Why would you treat this customer any other way? They need a apartment and once you show them what they are looking for, you have the ability to stop their shopping efforts.
Now here is the punchline, remember that I started shopping for my dress early because I wanted time to shop the sales? Well, I paid full price. Maybe your customer will too when you truly sell them what they want.
Concessions Vs. Rent Decreases
There has been a healthy and timely discussion on www.multifamilyinsiders.com this week. It started with a comment I made at a seminar I presented in Columbus, Oh and spilled over into a blog on this great web site for apartment professionals. In the event that you are not a member of the insiders site (and you should be!) I thought I would copy the bog and comments onto kategood.com so that you can read the conversation and share your thoughts.
Posted on MultifamilyInsiders.com on 10/26/2009 by Kate Good
Hi Everyone! Just getting into this great discussion concerning the blog post by Sarita Thomas. Check out her blog and see a healthy discussion on the topic of rental concessions versus rental rate optimization (which will probably mean a decrease).
Allow me to update the statement I made in a program I presented for the Columbus Apartment Association about communities offering up to 4 months free....I found a Vegas property offering 5 months free! Out of control! Yes, many markets are currently concecession driven. This is a scary situation and a downward spiral.
Just last week, I was asked to consult with a community that was trying to respond to the difficult market. Once their October move outs have turned in their keys, they will see their occupancy drop into the low 80's and their economic occupancy sitting very uncomfortably at 79% going into the slower winter months.We discussed what to do. A concession would certainly attract traffic, lease apartments and keep the contracted rent amount higher than if we dropped the prices and removed concessions. This was an important position when we discussed the challenge we are seeing with renewals.
Offering concessions has always been very hard for me. I was raised in this industry that believed if you offer concessions, there is something wrong with your apartment community. However, I have never experienced the challenges that I am seeing today. So what is the answer?
I've had many of these conversations with owners in about 20 different markets this year. My advice, keep the contracted rental rate higher, offer a concession to attract and close traffic and....here is the kicker....require a longer term lease. Get these residents locked in for 14 - 20 months. We will not see rents increase in 2010 (okay there are a few good markets out there but they are not the majority) and concessions will start to decrease as the markets stabilize due to the slow down in new product. The trick is to stop the churn and stabilize. The result, you avoid offering concession on that apartment until 2011 and by then, the market may not require this free rent offer. Longer leases allow you to do this and removes fear that the renter may have concerning their rent increasing after a 6 - 12 month lease agreement. Bottom line, each market and every community is different and there are a lot of factors to consider including the long and short term goals of the ownership. This week alone, I will be leading 6 calls with management companies via my program "Kate On Demand" to walk through the various factors and design a strategy that best serves the property, customer and owners. The goal: Stabilize and get through 2010!
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...written by Danny Soule, October 26, 2009
Hey Kate. Great article. I work with CLASS, Inc and we are constantly getting asked the same question regarding concessions vs lowering rents. The other option for some owners is giving cash back incintives (if you have the pockets for it). As opposed to lowering your rents 50$ or giving a concession, the cash back is a great leasing incintive this time of year (pre-holidays) It Keep market rents up and reduces sticker shock upon renewal. I'd be interested to hear your thoughts on that option. What kills me about concessions is that leasing consultants tend to give them out over the phone. They sometimes never even bother to tell the prospect what the market rent was before the special, thus never selling the full value of the concession.
+0
...written by Kate Good, October 26, 2009
Thanks for the comment Danny. I have found the incentives do work in some markets. People just want to feel like they "got something." I agree that we have to think ahead about how lowering rent will effect our ability to renew. People are not going to stand for much of a market increase and it seems like a deep hole that will take years to crawl out of.
With that said here are a few things to do BEFORE you drop a concession into your offer:
1. The phones are still ringing at the properties. I recently listened to 25 recorded leasing calls using Call Source. The results were pathetic. The consultant gave the price right away followed by the special offer. Hello! What ever happened to SELLING the VALUE BEFORE giving the price? And yes, I feel like i should yell that! Here is a new goal for all phone calls, defer the price question by asking a question such as "how soon are you looking to move in?" Now take control, ask questions and sell the apartments based on what you just heard the prospect say they needed. A good leasing consultant can defer the price for 3 min. That is a lot of selling time!
2. Do you have a tool to get the customer back for the second visit? Since the guest is usually visits a property two times before making a decision, I suggest having a tool to get them back.
3. Stop selling luxury. No one is buying it these days.
4. Individually price your apartments. Blanket, one price structures cause you to leave too much money on the table.
I'll think of more and post again.....anyone have anything to ad?
+0
...written by Karen Long, October 27, 2009
I'm so glad to see this topic discussed. I too got my multi-family wings in markets where a concession next door warranted a "yes, I've heard they have problems" response. I like the solution of recouping and locking the renter in with a longer lease. I think that should work! Get us through 2010 as best possible, give the prospective resident a "good deal" they expect, and keep our rental rates as strong as possible in a very tough market.
+0
...written by Marci Brand, October 27, 2009
I spend alot of time working with properties in tough markets and I too, have found that one of the biggest issue is what we are doing with the traffic when we get it. I hate to offer concessions and I really cringe when I see and hear Leasing Professionals relying on concessions to sell their apartments. It is very important to remember that a concession should be the icing on the cake and incentive to rent, not the sole reason. Times are tough, and everyone is looking to save money, but most of our renters are still interested in the BEST product they can get for the rent. When we focus on specials to the point that they are our sole sales point, we run the risk of driving the market and the perceived value of the property down. We also fall into bad habits which are hard to break when the market turns around (and it will). At one community we offered a 'menu of options' for the prospective renter. They could choose between accent walls or similar upgrade in the apartment, a rental incentive or a flat screen tv. This gave the renter a feeling that he was in control and it also separated the property from the competition. The amazing thing was, we gave away more flat screen tvs than free rent (and it cost less!)
-1
...written by SARITA THOMAS, October 28, 2009
Hi Kate, Thanks for the information. There is a love-hate relationship with concessions, I know. However, I think we take it to the extreme. How do we know when we are actually making the bottom line with so many concessions given out? I agree with you. Make the lease terms longer so that we can re-coup some of the lost rent and preserve vacancies in 2010. Thank you!
Posted on MultifamilyInsiders.com on 10/26/2009 by Kate Good
Hi Everyone! Just getting into this great discussion concerning the blog post by Sarita Thomas. Check out her blog and see a healthy discussion on the topic of rental concessions versus rental rate optimization (which will probably mean a decrease).
Allow me to update the statement I made in a program I presented for the Columbus Apartment Association about communities offering up to 4 months free....I found a Vegas property offering 5 months free! Out of control! Yes, many markets are currently concecession driven. This is a scary situation and a downward spiral.
Just last week, I was asked to consult with a community that was trying to respond to the difficult market. Once their October move outs have turned in their keys, they will see their occupancy drop into the low 80's and their economic occupancy sitting very uncomfortably at 79% going into the slower winter months.We discussed what to do. A concession would certainly attract traffic, lease apartments and keep the contracted rent amount higher than if we dropped the prices and removed concessions. This was an important position when we discussed the challenge we are seeing with renewals.
Offering concessions has always been very hard for me. I was raised in this industry that believed if you offer concessions, there is something wrong with your apartment community. However, I have never experienced the challenges that I am seeing today. So what is the answer?
I've had many of these conversations with owners in about 20 different markets this year. My advice, keep the contracted rental rate higher, offer a concession to attract and close traffic and....here is the kicker....require a longer term lease. Get these residents locked in for 14 - 20 months. We will not see rents increase in 2010 (okay there are a few good markets out there but they are not the majority) and concessions will start to decrease as the markets stabilize due to the slow down in new product. The trick is to stop the churn and stabilize. The result, you avoid offering concession on that apartment until 2011 and by then, the market may not require this free rent offer. Longer leases allow you to do this and removes fear that the renter may have concerning their rent increasing after a 6 - 12 month lease agreement. Bottom line, each market and every community is different and there are a lot of factors to consider including the long and short term goals of the ownership. This week alone, I will be leading 6 calls with management companies via my program "Kate On Demand" to walk through the various factors and design a strategy that best serves the property, customer and owners. The goal: Stabilize and get through 2010!
[ Back ]
Bookmark
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Hits: 365
Comments (5)
Subscribe to this comment's feed
...written by Danny Soule, October 26, 2009
Hey Kate. Great article. I work with CLASS, Inc and we are constantly getting asked the same question regarding concessions vs lowering rents. The other option for some owners is giving cash back incintives (if you have the pockets for it). As opposed to lowering your rents 50$ or giving a concession, the cash back is a great leasing incintive this time of year (pre-holidays) It Keep market rents up and reduces sticker shock upon renewal. I'd be interested to hear your thoughts on that option. What kills me about concessions is that leasing consultants tend to give them out over the phone. They sometimes never even bother to tell the prospect what the market rent was before the special, thus never selling the full value of the concession.
+0
...written by Kate Good, October 26, 2009
Thanks for the comment Danny. I have found the incentives do work in some markets. People just want to feel like they "got something." I agree that we have to think ahead about how lowering rent will effect our ability to renew. People are not going to stand for much of a market increase and it seems like a deep hole that will take years to crawl out of.
With that said here are a few things to do BEFORE you drop a concession into your offer:
1. The phones are still ringing at the properties. I recently listened to 25 recorded leasing calls using Call Source. The results were pathetic. The consultant gave the price right away followed by the special offer. Hello! What ever happened to SELLING the VALUE BEFORE giving the price? And yes, I feel like i should yell that! Here is a new goal for all phone calls, defer the price question by asking a question such as "how soon are you looking to move in?" Now take control, ask questions and sell the apartments based on what you just heard the prospect say they needed. A good leasing consultant can defer the price for 3 min. That is a lot of selling time!
2. Do you have a tool to get the customer back for the second visit? Since the guest is usually visits a property two times before making a decision, I suggest having a tool to get them back.
3. Stop selling luxury. No one is buying it these days.
4. Individually price your apartments. Blanket, one price structures cause you to leave too much money on the table.
I'll think of more and post again.....anyone have anything to ad?
+0
...written by Karen Long, October 27, 2009
I'm so glad to see this topic discussed. I too got my multi-family wings in markets where a concession next door warranted a "yes, I've heard they have problems" response. I like the solution of recouping and locking the renter in with a longer lease. I think that should work! Get us through 2010 as best possible, give the prospective resident a "good deal" they expect, and keep our rental rates as strong as possible in a very tough market.
+0
...written by Marci Brand, October 27, 2009
I spend alot of time working with properties in tough markets and I too, have found that one of the biggest issue is what we are doing with the traffic when we get it. I hate to offer concessions and I really cringe when I see and hear Leasing Professionals relying on concessions to sell their apartments. It is very important to remember that a concession should be the icing on the cake and incentive to rent, not the sole reason. Times are tough, and everyone is looking to save money, but most of our renters are still interested in the BEST product they can get for the rent. When we focus on specials to the point that they are our sole sales point, we run the risk of driving the market and the perceived value of the property down. We also fall into bad habits which are hard to break when the market turns around (and it will). At one community we offered a 'menu of options' for the prospective renter. They could choose between accent walls or similar upgrade in the apartment, a rental incentive or a flat screen tv. This gave the renter a feeling that he was in control and it also separated the property from the competition. The amazing thing was, we gave away more flat screen tvs than free rent (and it cost less!)
-1
...written by SARITA THOMAS, October 28, 2009
Hi Kate, Thanks for the information. There is a love-hate relationship with concessions, I know. However, I think we take it to the extreme. How do we know when we are actually making the bottom line with so many concessions given out? I agree with you. Make the lease terms longer so that we can re-coup some of the lost rent and preserve vacancies in 2010. Thank you!
Monday, October 26, 2009
How hard is it to say "I was wrong?"
I am a huge cheerleader for companies that innovate. The problem is with weak execution. Do not innovate until you truly understand your customer. So many companies today are trying to find ways to create "other income" to keep their doors open. I understand that paying the light bill is harder to do today and I caution executives to think about their customers before making decisions.
Let's look at the Web Van debacle. I loved this company. For me, a business traveler who loves a home cooked meal, I could arrange to have my selected groceries delivered with in an hour or two of arriving home from a trip. The last thing I wanted to do was to give a hour of the few I have to be at home to the chore of gorcery shopping. With Web Van, I could let my computer mouse do the shopping while sitting in a hotel room!
Web Van was one of the darlings of the techonology boom and quickly became a dot bomb. Many people wondered why and it was explained that the economics of having a warehouse and delivery trucks made the prices too expensive. It was suggested that they charge a delivery fee of $10. Web Van's CEO said that Web Van would never charge a delivery fee when it was one of the actions that might have saved the company.
As a loyal customer, I would have happily payed the $10 fee just to continue to have the service. Web Van made the mistake of not really understanding their customer and that what we benefited from the service was convenience and that was worth $10. And so today, Web Van is out of business, shareholders lost a fortune and I do not have my groceries delivered to my door. They were so wrong, the lights were out before they ever had a chance to admit it. Bottom line, know your customer or lose your business.
Another case study is USAirways who started charging for drinks and pillows. This is a company that keeps getting it wrong because they never seem to think about their customers. The funny thing about this mistake is that USAir actually thought they were wasting liquid because when they started charging for drinks, people drank less. In a matter of months, USAirways figured out that we were still drinking liquids, we just were not buying them on the plane and they still have the weight on the plane and trash to remove. The backlash and poor publicity cost this airline that already had a bad reputation due to the fact that their employees are either indifferent or downright rude because they simply do not like their jobs. This was a serious mistake that did not help the airline in any way. Complimentary drinks are now being served once again. Can we bring back the video equipment for the long flights?
When I think about these two examples I can only say that the mistakes could have been avoided had they known their customers needs and wants. And, if you do mistake your real customer, have the guts to say you are wrong and adjust.
Let's look at the Web Van debacle. I loved this company. For me, a business traveler who loves a home cooked meal, I could arrange to have my selected groceries delivered with in an hour or two of arriving home from a trip. The last thing I wanted to do was to give a hour of the few I have to be at home to the chore of gorcery shopping. With Web Van, I could let my computer mouse do the shopping while sitting in a hotel room!
Web Van was one of the darlings of the techonology boom and quickly became a dot bomb. Many people wondered why and it was explained that the economics of having a warehouse and delivery trucks made the prices too expensive. It was suggested that they charge a delivery fee of $10. Web Van's CEO said that Web Van would never charge a delivery fee when it was one of the actions that might have saved the company.
As a loyal customer, I would have happily payed the $10 fee just to continue to have the service. Web Van made the mistake of not really understanding their customer and that what we benefited from the service was convenience and that was worth $10. And so today, Web Van is out of business, shareholders lost a fortune and I do not have my groceries delivered to my door. They were so wrong, the lights were out before they ever had a chance to admit it. Bottom line, know your customer or lose your business.
Another case study is USAirways who started charging for drinks and pillows. This is a company that keeps getting it wrong because they never seem to think about their customers. The funny thing about this mistake is that USAir actually thought they were wasting liquid because when they started charging for drinks, people drank less. In a matter of months, USAirways figured out that we were still drinking liquids, we just were not buying them on the plane and they still have the weight on the plane and trash to remove. The backlash and poor publicity cost this airline that already had a bad reputation due to the fact that their employees are either indifferent or downright rude because they simply do not like their jobs. This was a serious mistake that did not help the airline in any way. Complimentary drinks are now being served once again. Can we bring back the video equipment for the long flights?
When I think about these two examples I can only say that the mistakes could have been avoided had they known their customers needs and wants. And, if you do mistake your real customer, have the guts to say you are wrong and adjust.
Friday, October 16, 2009
Seminar Wrap Up by Chrissy Wills at CAA
Kate Good Presented "Beating the Benchmark" at the CAA
Written by Chrissy Wills
Wednesday, 23 September 2009 15:30
Written by Chrissy Wills
Wednesday, 23 September 2009 15:30
The Columbus Apartment Association (CAA) hosted Kate Good, national speaker, who presented "Beating the Benchmark" on September 23rd at the Fawcett Center. Forty CAA members were in attendance to hear Kate explain how to market during this economy.
Kate recently presented at the National Apartment Association annual convention in June at Mandalay Bay in Las Vegas. She is a nationally recognized apartment marketing expert known for her amazing creativity, energy and motivational ability. Kate has been working in apartments her entire life, and has brought invaluable insight to developers, marketing directors and associations across the country.
Kate recently presented at the National Apartment Association annual convention in June at Mandalay Bay in Las Vegas. She is a nationally recognized apartment marketing expert known for her amazing creativity, energy and motivational ability. Kate has been working in apartments her entire life, and has brought invaluable insight to developers, marketing directors and associations across the country.
To start the Beating the Benchmark session, Kate gave some interesting facts about today's apartment industry. Approximately 70% of communities nationwide are offering concessions, everything from one month to four months free. According to her research, current consumer buying habits include: an average of two visits to make a decision, apartment residents are looking for extra spaces, in traditional relationships the female is the primary decision maker in choosing a home, the first visit to a community is virtual and apartment residents will take 60 - 90 days to make a decision.
The CAA members enjoyed Kate's humor and case studies about McDonald's trying to become Starbucks and Starbucks trying to be like McDonalds. She shared these ideas to get attendees to think about what their unique selling features are and to showcase those in ads and leasing presentations. Also, she recommended stepping up ads with language for today; she likes terms such as comfortable, generous for the money, durable, built to last, and great buy.
To close Kate shared easy marketing ideas and effective closing techniques. Some of Kate's favorite marketing ideas included handwritten notes, placing the bootleg signs inside the community to remind current residents about the community's benefits and creating a special of the day. CAA members really liked the seminar and could easily take away fresh ideas from it.
To close Kate shared easy marketing ideas and effective closing techniques. Some of Kate's favorite marketing ideas included handwritten notes, placing the bootleg signs inside the community to remind current residents about the community's benefits and creating a special of the day. CAA members really liked the seminar and could easily take away fresh ideas from it.
Kristi Fickert with Village Green Management traveled from Cincinnati to hear Kate speak and really gained a lot from the presentation, "I think everyone in the room took at least ten new ideas home with them."
The CAA would like to thank our members for attending Beating the Benchmark and look forward to seeing them at the next seminar.
Wednesday, October 14, 2009
Marketing in a Down Economy from the Lowes For Pro's Web site
The recession is bad news for just about every sector of business, and property leasing is no exception. But before you rush to slash your marketing budget as a cost-saving move, consider that good marketing may be the key to keeping your business afloat. Your tenants are out there, and with careful marketing you can find them. Rather than dream about high rents and low vacancies, focus on a plan to survive the recession. That means offering great value and making sure people are hearing about what you have to offer-in other words, keep marketing. ''If you need traffic, you shouldn't cut your marketing budget, '' says Kate Good, professional speaker, marketing solutions expert and partner on the Apartment All-Stars tour. Instead of keeping your current marketing program, look at changing it up and marketing more intelligently.
Good suggests starting with the tenants already in your properties. ''The least expensive strategy is to market internally and close the back door. '' So while it's critical to study your market and know which promotions are luring tenants, it also makes sense to devote some of those perks-a couple of months free rent or a new flat-screen TV-to your existing clientele. It seems counterintuitive to give discounts to the people who are currently underwriting your revenue stream, but if you increase your retention rate you'll be solving your vacancy problem without the turnover costs associated with moving in a new tenant.
When it comes to reaching out to prospective tenants, be selective. Figure out who is already drawn to your properties and find more of them. Good uses this example: If you notice that your community appeals to active seniors, invite the local bridge club to meet for free in your clubhouse. That way, more people in the target market will see your property, and word will spread. ''Don't try to be all things to all people, '' says Good. ''Identify the kind of people who like your community, find out where they are, and figure out how to attract them. You're saving money by reaching out to a smaller audience, but it's the right audience. ''
Even with changes to your marketing strategy, don't do away with all of your traditional marketing. ''Print drives traffic to the Internet, so make sure you keep those ads out there, '' says Good. And you have to do it year-round. ''Renters pick up the apartment guide in February or March even though they might be renting in June or July. If you pull your ad in February because you're not getting any traffic, you've lost an opportunity for residual traffic later. I don't pull back on advertising until I'm full, and most people aren't full right now. '' Next, consider changing your pricing model. Instead of charging the same rent for every two-bedroom unit, for example, charge more for the unit at the end of the hall with more windows, or the unit with new carpet. There are two advantages to this strategy. First, you can make more on your premium units. Second, if the least expensive units sell first, then your best units will be available for display during the peak of leasing season. ''If you're charging a flat rate, your best units get cherry picked, '' says Good. ''You want to have that more desirable unit-with the higher price tag-available when you have higher traffic. ''
Slashing your marketing budget isn't the right response to the recession-changing the way you approach marketing is.
Good suggests starting with the tenants already in your properties. ''The least expensive strategy is to market internally and close the back door. '' So while it's critical to study your market and know which promotions are luring tenants, it also makes sense to devote some of those perks-a couple of months free rent or a new flat-screen TV-to your existing clientele. It seems counterintuitive to give discounts to the people who are currently underwriting your revenue stream, but if you increase your retention rate you'll be solving your vacancy problem without the turnover costs associated with moving in a new tenant.
When it comes to reaching out to prospective tenants, be selective. Figure out who is already drawn to your properties and find more of them. Good uses this example: If you notice that your community appeals to active seniors, invite the local bridge club to meet for free in your clubhouse. That way, more people in the target market will see your property, and word will spread. ''Don't try to be all things to all people, '' says Good. ''Identify the kind of people who like your community, find out where they are, and figure out how to attract them. You're saving money by reaching out to a smaller audience, but it's the right audience. ''
Even with changes to your marketing strategy, don't do away with all of your traditional marketing. ''Print drives traffic to the Internet, so make sure you keep those ads out there, '' says Good. And you have to do it year-round. ''Renters pick up the apartment guide in February or March even though they might be renting in June or July. If you pull your ad in February because you're not getting any traffic, you've lost an opportunity for residual traffic later. I don't pull back on advertising until I'm full, and most people aren't full right now. '' Next, consider changing your pricing model. Instead of charging the same rent for every two-bedroom unit, for example, charge more for the unit at the end of the hall with more windows, or the unit with new carpet. There are two advantages to this strategy. First, you can make more on your premium units. Second, if the least expensive units sell first, then your best units will be available for display during the peak of leasing season. ''If you're charging a flat rate, your best units get cherry picked, '' says Good. ''You want to have that more desirable unit-with the higher price tag-available when you have higher traffic. ''
Slashing your marketing budget isn't the right response to the recession-changing the way you approach marketing is.
Saturday, October 10, 2009
Oh my, where does the time go?
I am shocked that two months have passed since my last blog entry. I'm putting some thought into what has been going on to keep me so busy. First, and most important for my out of control love for shoes, I can say I am having the best year of my professional career. 15 months ago I was thrown into some much needed bed rest while my two broken feet healed. But what really healed for me was my focus and direction. I knew that it was time to really study the rapid decline of our market conditions and start to research and test solutions that I could share with my audiences and clients in 2009. It did not take long to discover that the old song we used to sing...do it with me now..."if you keep on doing what you've always done, your gonna keep on getting what you've always got." That is not true in 2009. If I did the things in my marketing plan that worked 2 years ago, they will not yield the same results today.
And so I set on a journey to find the new path for leasing and marketing. It all comes back to the overly discussed topic on cable news shows, consumer confidence is down. Really down. So down it has fallen and cannot get up! No infomercial, life alert, or shot of Red Bull is going to fix this anytime soon. And so, we adjust. The car companies were some of the first industries to discover this with the "assurance plans". Our industry responded with the "no fear lease agreement". These addendum's are helpful in removing fear and allowing the customer to make a decision.
I was speaking in South Carolina this year when a manager complained that this a practice used by her competition and it was killing her occupancy. I asked if there is anything in her lease agreement that would allow someone to cancel the contract. She replied yes, two months notice and a cancel fee. Hey people, this is what marketing is all about! That manager can offer a no fear lease agreement because she already has one. She is just not selling it. Slap together a flyer, create a logo and get this great news to your customer. Now you have a great tool to remove fear of making the wrong decision.
This is a lesson in my personal life too. We all have the necessary tools for success. Recognize what tools you need to call on to get what you want. You may need to tweak it a bit, but know you can change, adjust and thrive. I think this is why I am having not only the best year of my life professionally, but an amazing, fantastic, and exciting personal life too! Thanks friends, partners and family. You helped bring me back to life. And what a great life it is!
And so I set on a journey to find the new path for leasing and marketing. It all comes back to the overly discussed topic on cable news shows, consumer confidence is down. Really down. So down it has fallen and cannot get up! No infomercial, life alert, or shot of Red Bull is going to fix this anytime soon. And so, we adjust. The car companies were some of the first industries to discover this with the "assurance plans". Our industry responded with the "no fear lease agreement". These addendum's are helpful in removing fear and allowing the customer to make a decision.
I was speaking in South Carolina this year when a manager complained that this a practice used by her competition and it was killing her occupancy. I asked if there is anything in her lease agreement that would allow someone to cancel the contract. She replied yes, two months notice and a cancel fee. Hey people, this is what marketing is all about! That manager can offer a no fear lease agreement because she already has one. She is just not selling it. Slap together a flyer, create a logo and get this great news to your customer. Now you have a great tool to remove fear of making the wrong decision.
This is a lesson in my personal life too. We all have the necessary tools for success. Recognize what tools you need to call on to get what you want. You may need to tweak it a bit, but know you can change, adjust and thrive. I think this is why I am having not only the best year of my life professionally, but an amazing, fantastic, and exciting personal life too! Thanks friends, partners and family. You helped bring me back to life. And what a great life it is!
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