If you looked around your market today, whether you visit by car, local apartment publication or the Internet, I know you would see the word “special” in bold letters followed by bells and whistles for those of you that have sound on your computers. Versions of this include, “Ask about our special,” “See our one-bedroom special,” and “Special – free rent.” In multifamily property management, the word “special” simply means that the owner is making concessions – and trying to put a Band-Aid on a skinned knee that really needs stitches.
In spite of the widespread belief that a concession is a problem-solver, it is actually a problem-maker. Apartment marketers believe that apartment specials and other concessions are cure-all methods for moving slow product, but it’s actually a neon sign that the property has a major weakness: apartment management is unable to identify the marketing or sales problem(s) that plague the apartment community.
The first thing to do is determine what are the problems facing the multifamily asset:
- Traffic has declined.
- Apartments aren’t market ready.
- The apartment community doesn’t have a clearly defined position in the marketplace.
- The leasing professionals have received little or no training.
- The rent structure is slightly skewed, but not necessarily too high. A complete analysis is long overdue.
- The Internet isn’t being used at all or very little.
- The monument sign has not been repainted in years.
- The grass is burnt or filled with weeds – flowers are drooping, as is the smile on the drive-by customer.
- The carpet in the rental office is stained and frayed.
- The rental office hours close at 5 p.m. limiting those that work the normal 9 – 5 workday.
Unless the root of the problem is found and fixed, no special ever devised can make a lasting, positive change. You may improve occupancy for the short-term, but the problem or problems are still there.
How does a customer perceive a special? He or she may think, “Those apartment owners must have a lot of money because they’re willing to give it away.” Or, another way of thinking is, “What’s wrong with the apartment community if they have to pay people to live there?”
Let’s say the customer doesn’t care and signs a lease. You’ve given a new resident a concession in order to get a move-in – but what about the rest of your residents at lease renewal? They drive into the complex, too, and see the large sign twice a day that advertises your special. And when it’s time to renew their leases, they’ll want a special, too.
For every apartment community offering specials, there is always underlying issues and it’s up to the marketer to discover what they are. Network with professionals in the multifamily property managementindustry and cultivate relationships with your competitors. There are plenty of prospective residents to go around, but you also have to know how to market your apartment community. Hire an independent shopping company outside your geographic area to give you a fresh viewpoint on how your leasing professionals are doing. Ask the company to shop your apartment community and three to four competitors. The cost of a professional shopping service to perform this assignment will equal about six weeks of vacancy on a one-bedroom apartment.
Look around at your competition – in every market, there is always one apartment community that never gives concessions. Most likely, that one community is well maintained and clearly positioned in the market. The successful properties usually share two characteristics:
- A caring, professional staff (including professional attire)
- A great sense of pride in how the property looks
After you find the problem, fix it. Take extra money and resources and:
- Improve on your market ready apartments.
- Seek out training for your leasing professionals – telephone techniques, working the waiting list, improving closing ratios, etc.Hire a good graphic designer to re-design your media, including your Web site. If you don’t have a Web site, you are losing a great deal of traffic! URL’s can be purchased for a minimal charge. Please see www.bravostrategicmarketing.com for a free download of an Internet Marketing Plan.
- Paint the monument sign or replace it, invest in sod or a good landscaping company, plant colorful flowers and kill the weeds! Make a good first impression and you’ll get traffic.
- Replace worn carpeting and tidy up the leasing office – make sure the entrance is clean of debris, roll up mini-blinds and clean the windows, add green, healthy plants to the waiting area, polish furniture – improve your housekeeping!
- Keep your rental office open until at least 7 p.m., especially during the busy season – stagger the team’s hours so the office is covered longer.
- Consider reaching into the community – prepare gift baskets containing flyers for nurses stations at nearby hospital facilities or hairdressing salons that usually act as hubs for communication. Join the local Chamber of Commerce. Is it too late to participate in the annual local bridal show? Should you consider taking coffee and a box of donuts with your flyer to the foreman stationed in a nearby construction trailer? There are plenty of ways to reach into the community – be creative!
Last of all, what if your competitor is offering a major special and the customer in front of your leasing professional brings it up. Your leasing professional can’t cave in to pressure – he or she must counter the special with grace and style. With sympathy for the obvious plight of the competitor, a counter may be as simple as, “Yes, we’re so lucky not to have such problems here. We offer so much in the way of service and quality that we have a waiting list of people eager to live here.” People usually want what they may not be able to have! If you’ve trained your staff to use this approach, the words “concession” and “special” are soon forgotten.