Four Bucks Is Dumb

A downside of my career is that I see the inside of an airplane more than I care to. The upside is that I like what I do when I get off the plane. Each trip enriches my thinking. Maybe it's the change of scenery that makes me notice things. Today my work took me to one of my favorite cities, Seattle. I noticed a billboard that made me think. It said "four bucks is dumb." Next to the tag line are the golden arches.

McDonald's went right to the home town of the coffee house to say the rules of the game are changing. Through the recession, Starbucks became the poster child of excess. While trying to help a renter make a decision on an apartment that was $75 above their price range, I compared the difference in price to their daily Starbucks coffee habit. I'm sure I'm not the only one who has tried this approach and succeeded. It is a fine illustration of lining up priorities and checking in to make certain you are spending your money on things that really matter in life such as your home and not your daily caffeine jolt.

I recently read that Howard Schultz, CEO of Starbucks, came out of retirement to help Starbucks through this time of change. And, it was seeing this billboard that made him understand consumer behavior was changing so rapidly that it was time for Starbucks to seek answers. Yet he compared this to flying an airplane without instruments. You see Starbucks invented and mass marketed the modern coffee house. They did this for many years without competition. And now, responding the opportunity in a down economy, another major brand known for value was on the attack.

Two years ago, Starbucks was being forced to the middle of the market by the low end products that McDonald's and Dunkin Doughnuts offers and the high end independent coffeehouse. Starbucks feels the middle is the worst place for their brand. They decided to not let people define them and get back in control of their own destiny.

In the middle of the market is a tough place to be. There will be a better product and people to pay more for that product. And then there is the low end provider who sacrifices something to give the lowest price. But the middle guy has to compete with both ends of the scale: convincing the high end buyer that they don't have to pay more for quality, and the low end buyer that they should pay more for your product. This makes for a very tricky marketing plan. It is essential you define who you are and how you can sell it.

As our industry continues on the path of recovery, define your road map by knowing how you will compete and make the most of your market position.

Rents Could Rise 10% in Some Cities

By Les Christie, CNNMoney.com
Mar 16, 2011

Already, rental vacancy rates have dipped below the 10% mark, where they had been lodged for most of the past three years.

"The demand for rental housing has already started to increase," said Peggy Alford, president of Rent.com. "Young people are starting to get rid of their roommates and move out of their parent's basements."

By 2012, she predicts the vacancy rate will hover at a mere 5%. And with fewer units on the market, prices will explode.

Rent hikes have averaged less than 1% a year over the past decade, according to Commerce Department statistics, adjusted for inflation. Now, Alford expects rents to spike 7% or so in each of the next two years -- to a national average that will top $800 per month.

In the hottest rental markets, the increases will likely top the 10% mark annually for the next couple of years. In San Diego, Alford anticipates rents will rise more than 31% by 2015. In Seattle rents will climb 29% over that period; and in Boston, they may jump between 25% and 30%.

This is a sharp change from the recession, when many Americans couldn't afford to live on their own. More than 1.2 million young adults moved back in with their parents from 2005 to 2010, said Lesley Deutch of John Burns Real Estate Consulting. Many others doubled up together.

As a result, landlords had to reduce prices and offer big incentives to snag renters.

Now that the recession is easing, many of these young people are ready to find new digs, mostly as renters, not owners. Plus, the foreclosure crisis continues unabated, and the millions losing their homes are looking for new places to live.

Apartment developers many not be able to keep up with this heightened demand, which will force prices upwards, according to Chris Macke, a real estate analyst with CoStar, which tracks multi-family housing trends.

"There will be an envelope of two or three years," said Macke, "when the rise in demand for rentals will exceed the industry's ability to meet it."

Plus, Alford added, "there's been a shift in the American Dream. We're learning from our surveys that a huge proportion of people are choosing to rent."

They've experienced the downsides of homeownership -- or seen friends and family suffer -- and don't want to take the risks or pay the higher costs of homeownership.

Where homeownership costs are particularly high, there are many more renters than owners. In Manhattan, for example, only about 20% own their homes; in San Francisco, about of third of the population does; in Los Angeles, less than 40%; and in Chicago, about 44%.

There's one factor that could rein in rent increases: the huge number of foreclosed homes that could hit the market over the next few years.

In many markets, like Phoenix and Las Vegas, there are neighborhoods filled with recently built, single-family homes going for fire-sale prices. When the cost of owning homes falls well below the costs of renting them, more people will buy.

"That's always been the biggest competition for rentals," said Deutch

Ready, Set, Lead

There are a few certainties in the world: people will disappoint you, others will amaze you and whatever you think about tomorrow is probably not going to happen. The reason? Change. And the rate of change is speeding up - rapidly. Several factors are causing this acceleration such as the expansion of technology, access and exposure to knowledge and our need to be entertained is insatiable.

By 1900, it had taken 150 years to double all human knowledge. Today it takes only two to three years. And some estimate that by the year 2020, knowledge will double every 72 days. The millennial generation (born in the 80's and 90's) are the largest to enter the workforce since the boomers. Nurtured through the era of "google it" instead of "look it up" they have a keen understanding of how to access anything. The question is, who is leading them?

In the past, leadership was an economic entity. The priority was to develop structures, set controls and raise income as effectively as possible. This was accomplished through a ladder system of people managing other people as they do tasks.

Today, the speed of change demands a evolved leader. To be that person, you must rapidly adapt to change and require constant involvement in skill development while leveraging increased knowledge. It is not enough to know how to do a report, but rather to read, react and adjust based on the lesson gleaned from the data.

We have to be experts in human capital, not just financial capital. We must master emotional intelligence not just economic competence. Control is out of style because it is the customer who is calling the shots. We have to align people based on this reality and not structures and spreadsheets.

Today's leader has a grasp of emotional aptitude and understands the new order of customer influence and peoples motivations. It less about technical or financial expertise.

Does this make you nervous? Think about what your computer can do for you. It does the counting, tracking and comparing. You have to be the person who understands what to do with the information. Now we shift from managing deadlines to managing success factors. A key success factor is to develop skills for your team members so they not only produce a report but react to the report. You lead them to direct change. Leadership does not happen while you are standing still.

Your ability to manage change will be your key success factor. And my friend, it is all changing. Winning organizations are building leaders faster.

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http://myemail.constantcontact.com/Announcing-2011-Apartment-All-Stars-Tour-Dates.html?soid=1101104660465&aid=4PZHU1P3k3Y

Motivating Your Team In the New Year

Our front line team members are typically looking for a little fun and excitment at work. A great sales person loves to look forward to the unexpected and break out of a normal routine. My experience is that the front line loves to compete and work towards an goal for accomplishment. Start by asking them to compete with themselves. The best way to do this is to have a goal writing workshop. Ask each member of the team to write goals for near and distant terms. The goals should be both personal and professional because it is our pro life that gives us the fuel and resources for our personal life. Remember a goal must be written, shared, and specific with a deadline. Next write a plan to accomplish the goal. Create a visual board to remind people of their goals and their progress. Allow the team to decide what their prize for accomplishment will be.

Communication can be a source of motivation. Share with your team, each week, the goals of the property, specific areas of focus and success. Bring everyone into the “business” that you are managing. Don’t just make them feel like they are there to only do their jobs but that they are part of something bigger.

Start the new year on a positive, fun and meaningful note.

5 Things Every Marketing Plan Should Include

The days of the cookie cutter marketing plan have long past. In fact, 2011 is proving to be an exciting year for the apartment industry. Most of our markets are showing tangible improvement as many are raising rents and the concessionary sales pitch is a thing of the past. This means it is time to think about how to capitalize on this marketing opportunity to make money for you and your owners. Here are 5 ways to make certain your 2011 marketing plan is poised for success.

Mobile Mayhem - Mobile marketing is here to stay! Have you noticed that smart phones navigate your life? Just this weekend I booked a dinner reservation on Open Table, acquired directions through Google Maps, paid my American Express bill and tracked my Mother's Valentine's Day gift and never even turned on my computer. I made all of this happen with my Blackberry. The same is true when searching for apartments and leasing them online. Our residents are using their smart phone. This begs the question, if your web site optimized for mobile technology? It's time to check into this and make your Website a powerful tool to lease apartments in the palm of your customers hand.

Public Conversation - This is what social media is all about. But first, you have to be prepared to have a conversation with a concerned resident in public. Remember, this is your chance to address negative reviews that people post online concerning your apartment community. The truth is, even brands and services we love most often let us down and we feel the need to complain. So, take that feedback and think of it as breakfast to fuel for improvement and maybe even set the record straight! Allow your residents to post on your Facebook wall, Websites and other social forums. But don't stop there, address EVERY comment, praise or complaint and show your renters that you care about them and their thoughts and needs matter. A simple response will show the entire viewing public that you are a solid manager and will act on their needs. Make certain your marketing plan addresses this new forum for customer service and uses it to get more leases and renewals.

Traditions - It is sad to think about all the fun resident events that did not make the budget during our recessionary years. It is time to bring those back and I encourage you to start a tradition with your events. This means that you don't just to these events once in a while when you are fully staffed and feel like it, you commit to it every week or month. It will probably take a few events to get a following but imagine how something as simple as a pancake breakfast could take off and really mean something to your community. Budget for your signature event to happen on a regularly scheduled basis.

Get Relevant - Adjust your advertising to not tell them what you offer but rather why they should buy it. Today more than ever, the customer knows they have a choice and they exercise their right to choose or not choose every hour of every day. Our sales and marketing efforts should now shift to make a case for why someone should buy your widget versus your competitors.

Be Unique- It's hard to capture and maintain people's attention today when the world around us is so distracting. This means that smart marketers are adding unique bling to their print and online advertising by changing up their graphics to include 3d Floor Plans (see www.Matts3DFloorplans.com) or virtually furnishing a model through www.VirtualStagingSolutions.com. I am also impressed with new tools offered by the Internet Listing Services such as www.ApartmentGuide.com where you can offer visitors to your Web page a unique view of your property through the Community Carousel tool. Check out these unique ways to improve your advertising.

Stay tuned for more great sales and marketing ideas from Kate Good.

Kate Presents Webinars

What is a better way to start out the New Year than by learning some marketing techniques from the master herself! Kate has teamed up with Multifamily Insiders to bring you a three-event webinar series focusing on apartment marketing! You can sign up for just one event for $29.99 or get a 33% discount by attending all three. You don't want to miss this!

Click on the links below to register now.

30 Sales and Marketing Ideas for Under $300
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Convert Convert Wherever You Are: Phone and Email Lead Conversion Skill
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I Love Leasing: Ways to Make your Customers Fall In Love with Your Community
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Combined Webinars - Discount for attending all three:http://events.r20.constantcontact.com/register/event?oeidk=a07e36vih094947a85f