John Wanamaker, founder of Wanamaker's, one of the first U.S. department stores, is considered the father of modern advertising. Legend has it that he coined the phrase, “Half the money I spend on advertising is wasted; the trouble is, I don't know which half."
Many apartment owners feel that same frustration as they seek to effectively allocate the millions they spend every year on marketing. America's embrace of the Internet — more than 70 percent of U.S. households have Internet access, according to Dallas-based market research firm Parks Associates — has made the task both more difficult and much easier.
In addition to traditional newspaper classifieds and print guides, today's marketing professionals must consider multiple Internet listing services, corporate Web sites, search engine optimization, banner ads, meta tags, keywords, and more. On the one hand, this is a tall measure, but on the other, much of the hard work has already been done and is easily accessible online.
A recently produced NMHC white paper titled “Multifamily Marketing in the Internet Age" can help firms make the most of their Web-based investments. Authored by John Helm, founder and CEO of San Francisco-based Internet listing service MyNewPlace.com, the paper leverages Web usage data from 2 million Internet users as well as detailed surveys of 455 online renters to document how consumers use the Internet to find apartments. In addition, the white paper provides information on the growing use of call centers as a way to follow up on Internet leads. The results help identify the key elements necessary to develop a successful marketing strategy — one that reaches prospects and subsequently converts them into residents.
“More than 70 percent of renters start their apartment search online," Helm says. “And leading managers report that more than half of their lead and lease activity is coming from online sources."
Clearly, the multifamily firm that does not pay attention to its online presence is making a costly mistake. Here are the key insights gleaned from the NMHC white paper that will help apartment owners make the most of their advertising investment and provide useful marketing tips.
The Search Process
Most renters start their apartment search online. The average apartment hunter will visit two to three Internet listing services such as Apartmentguide.com, Apartments.com, ForRent.com, MyNewPlace.com, and Rent.com, or a general listing service such as Craigslist, over several months, according to the white paper. The vast majority of renters, however, begin at search engines such as Google and Yahoo. The most popular search phrase is simply “apartments." Still, this generates only about 2 percent of all searches, a clear indication of just how many search terms people use. For example, some searches focus on cities or specific areas.
In the survey of online renters commissioned by MyNewPlace.com, the top three criteria potential renters gave for choosing a listing service were the number of properties listed on that site, the amount of detailed information on those properties, and the ease of use — particularly ease of use of the core search functionality. Online apartment searchers rarely refine their searches beyond the basics — ent, number of bedrooms and baths, and pet policies.
The white paper found that the most serious prospects — those who are most likely to rent — will often return to the same listing service and view the same property four or five times over multiple sessions spanning 60 days or more.
To maximize the effectiveness of a listing, property owners should include photographs of the site, units, and floor plans, as well as detailed rent information. Listings that are missing any of this information — especially photographs — will generate significantly fewer leads and thus fewer leases. Helm says the biggest sources of renter complaints are rent prices that are out of date and a lack of response to e-mail or phone inquiries. Poor performance in these areas will result in lower lead-to-lease close ratios, concludes the white paper.
What's more, as many industry professionals know, decisions on where to spend advertising dollars should be based on good data. Inaccurate data can lead to false conclusions on the efficacy of certain types of advertising, resulting in the potential to waste thousands of dollars per property, not to mention lost leads and leases.
Useful data can come from anywhere, whether a simple guest card collected by the leasing office or a more sophisticated online lead-tracking solution, such as those embedded in most of the Web-based property management software systems, including AMSI, Domin-8 Enterprise Solutions, Intuit Real Estate Solutions, RealPage, and Yardi.
The Right Call
Given the importance of data — and the difficulty of gathering it accurately from on-site personnel — a growing number of owners and managers are considering the use of call centers and lead-management applications, the white paper found. Call center technology links advertising source-specific 1-800 numbers with individual callers and leasing interactions. This allows firms to accurately record the performance of various marketing sources, whether from Internet listing services or newspaper ads, in generating leads, site visits, and leases.
Todd Katler, vice president of business development for Atlanta-based leasing call center Level One, found that in only one-third of all leases did the ad source recorded in the management software match the source digitally recorded at lead origination. There are a variety of reasons for this discrepancy, including data input errors and oversight at the property level. But the issue illustrates one of the key problems owners and managers face in effectively allocating their marketing dollars — the on-site staffers must be appropriately trained to use the software in order to log information, follow-ups, and other interactions.
Another key benefit of a call center for an owner or manager: no more missed calls. Often, potential renters will research apartments into the wee hours of the night. While leasing agents cannot be on call those same hours, call centers can. In fact, many industry executives acknowledge that even during office hours, leasing agents are unable to answer every single call or respond to every e-mail in a timely manner. That's startling, considering that many callers are often close to making a leasing decision — one fi rm reports that 63 percent of its callers move in within four weeks; 40 percent do so within two weeks, according to the white paper.
And there are additional benefi ts to using call centers, owners and managers say. The white paper found that call center staff s typically convert leads into appointments 35 percent to 50 percent of the time, depending on the firm's culture, training, and staff expertise. That is a significantly higher conversion rate than on-site staff , who convert approximately 10 percent to 15 percent of leads into appointments.
The reason for the higher conversion rates at call centers is that operators can be specially trained. Plus, the research indicates that phone conversations tend to last longer than face-to-face conversations — nearly fi ve minutes compared to two minutes with an on-site staffer, who may be interrupted by a resident, walk-in prospect, or a package delivery.
Such improved metrics can have substantial financial impact on a property in the form of a streamlined workforce. At large properties of 350 units or more, using a call center can result in more efficient staffing (perhaps 0.5 to 1.0 fewer full-time equivalents) since lead followup is being outsourced.
In the multifamily context, the phrase “the customer is always right" (also attributed to Wanamaker) may not hold water. Prospects often do not remember their referral source, and the leasing agent is focused on signing the units, not maintaining accurate records. Luckily, two-thirds of all leases originate from an appointment made via a phone call or e-mail, according to MyNewPlace's Helm. That's why it's critical to electronically capture the source of the lead and funnel that information directly into your property management system.
By doing so, multifamily owners can discover how many leads, appointments, and leases a particular marketing avenue is generating. Indeed, as apartment marketing executives make their way through the ever-changing Internet landscape, these strategies can provide an incredibly valuable map to marketing success.
David Cardwell is vice president of capital markets and technology for the Washington, D.C.- based National Multi Housing Council.
