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There is a recurring cycle in the relationship between those who manufacture a product and those who market it. In the property management business, if an apartment is not prepared well, the marketing people have a difficult and sometimes impossible job. On the other hand, if the marketing people are not effective in their presentation, there will be few new residents.
The best leasing agent in the world can’t overcome a product that is substandard. No one can maintain a replacement rental pace that will match move-outs prompted by poor service and unfair policies. The marketing process must be interwoven with everything that has been discussed to this point. It cannot end when a lease is signed. Time goes by very quickly, and the renewal process is back again before you know it.
Most people work to support themselves, and as they earn more the quality of their lifestyles should improve. The secret to earning more money is acquiring a skill that is relatively rare and in high demand. In the rental apartment business, those who earn the most and who are in the most demand are the ones who have demonstrated exceptional skill in marketing units. Yes, you need to know how to develop a good set of policies, and you certainly must understand the importance of preparing a complex for occupancy; but the brass ring goes to the person who designs the program that results in the most new customers. In this section, I will explore the necessary ingredients for a marketing program.
THE BIG PICTURE
Before I start to identify the specific marketing tools you might use, it’s important to step back and consider a few general issues.
Few other marketing people have the advantage of the apartment manager when it comes to identifying the marketplace. While this benefit is clearly available, few people make use of it. The best road to future customers can be found by understanding how you gained the customers you have.
Unfortunately, most marketing efforts begin with a full-scale effort to fill a certain number of vacancies. Even though that is the ultimate marketing goal, dwelling on the vacancy situation will only produce negative re suits and erode confidence levels. Marketing people using vacancies as a starting point are often the very same people who begin chasing promotional schemes that detract from the property’s image. Concentrating on vacancies will produce limited results and make it difficult to stay ahead of the “ten move-in, ten move-out” cycle that plagues so many developments.
A complex with 150 units and twenty-five vacancies has an unacceptable vacancy level, and the property is most likely in financial jeopardy. Given the expense and debt loads of many apartment properties, this vacancy rate (nearly 17 percent) would he near a crisis point. The apartment manager is best advised to ignore this problem in the early stages of creating a marketing program and look to the 125 units with rent-paying customers to find the answers. There are already 125 families who like what is being offered in terms of location and product, and they feel that it represents good value. Why did these people perceive this location as more advantageous than that of the competition? When these people were prospects, what features and appointments attracted them? Were they lured by a special concession that could not be beaten by neighboring developments? Obviously something clicked, because the manager succeeded in attracting the current residents. Discovering the pattern that delivered success and repeating it should produce the needed extra residents.
In my experience, creating a sort of visual matrix is the best way to identify patterns in the relationship between your residents’ home (i.e., your property) and their place of employment. You can do the same. Be gin with a detailed and rather large-scale map of the township that includes your property. You may also need maps of adjoining townships to complete the assignment. Next, place a colored dot to mark the approximate location of the place of employment of each of the working adults occupying the rented units. This process is slow because it means looking up each resident’s application and then pinpointing one or more job locations on the map. Experience dictates certain procedures. If a number of people work at or near the same location, place the dots close together to display the concentration, but leave enough “air” around the dots so they can be counted. If your property is located away from the downtown area and your residents commute to work, try to find an open area on the map (e.g., a forest preserve area, large park, or lake). Draw a box around this area and label it “downtown.” This is done to avoid adding a number of extra maps to the display when the downtown area is far removed from the rest of the market. Place a dot in that box for each current resident who works in the general downtown area. If a few residents travel considerable distances to their workplaces, you can simply exclude them. You’re interested in finding a pattern; chasing a few stray dots will only distract you when you are ready to begin interpreting the results. If many of your residents are retired, you will need another box, similar to the one created for those who work downtown. The placement of the retirement box should he as close to the subject property as possible, without conflicting with the employment dots. When the number of retired people is meaningful, you may want to select a different color dot to indicate where these people lived prior to moving to your complex. In this case, you’re looking for a pattern that signals areas to target a direct mail campaign.
When you have completed the first step—placing the dots—you can sit back and evaluate. The matrix you have created is a tremendous source of information: It establishes market boundaries, illustrates drive patterns, identifies your residents’ places of employment, reveals competition, shows public transportation routes, initiates conversations with prospects, helps prospects who are new to town, and reinforces the decision to move to your development.
Market Boundaries. Those of us in the apartment rental business have an advantage over people in many other industries—we can establish the principal boundaries of our marketplace with ease and considerable ac curacy. Location is a key ingredient in the decision-making process of most renters. Locations are perceived as desirable because of such things as prestige or proximity to a school or workplace. As soon as you have 50 percent occupancy, you have enough data to identify your market boundaries. Most renters work, and a travel pattern between their places of employment and your rental complex will develop. When looking for new residents, direct your marketing efforts within the boundaries established by your existing residents. This will usually deliver much better results and will conserve your energy and the expense of blanketing a market area that is simply too broad.
Drive Pattern. When you complete your map, you will see a pattern that indicates the direction most of your existing residents travel to work and what major streets and intersections are most commonly used. It is a simple matter to measure the distance in both miles and minutes to drive. One of the most important ingredients in the decision to move is the proximity to one’s place of employment. Preparing this marketing matrix will help the rental personnel become more conscious of this concern and equip them with the knowledge to discuss travel times, favored directions, and short cuts with prospects.
Fig. 8-172: Market Map
Places of Employment. As the colored dots are placed on your marketing map, the sources of employment become apparent rather quickly (e.g., shopping centers, office complexes, factories, service outlets, eating establishments, schools, airports, etc.). Driving the area will reveal those facilities. Also, you will be able to assess the income level of the people who are employed in these work centers—you can often determine the business climate by noting signs advertising for more workers. Generally, you will add to your list of area employers who can be contacted in the continuing search for qualified residents.
Competition. Home to work... work to home. This is the driving pat tern of most people live or six days a week. People want the nicest place they can comfortably afford within a reasonable travel distance of their place of employment. Assuming that the workplace is established first, how many apartment complexes in the community offer the same basic level of quality with equally acceptable drive patterns and time requirements? If you determine that the majority of your existing residents travel north or south from your development and that a twenty minute drive time appears to be the norm, you can readily identify your competition because their residents will follow a similar driving pattern.
Public Transportation. In many households, one or more people do not have access to an automobile and rely on public transportation to get to work, school, or shopping. The marketing matrix will point out the major routes used for such travel. It is then up to the apartment manager to learn about the bus routes, train schedules, and fare levels. Unfortunately, many apartment employees either live on-site or depend on auto mobiles for their sole means of transportation. Hence, they never have the need to learn about public transportation routes—and may not take the time to do so. The marketing map will demonstrate the important public transportation routes that should be investigated by staff members.
Conversations with Prospects. The marketing map should enjoy a prominent location on one of the walls in the rental center. It is packed with valuable information for the renting process. For example, it is one of the best ways to initiate a conversation with a prospective renter. Remember that home to work. . . work to home pattern I discussed. You can pin point the property’s location and ask the prospect to help you find his or her place of employment on the map. That is a lot better than filling out a guest card. By the time you have finished preparing the marketing matrix, you will be familiar with many of the major employers in the area and the favored routes from your complex to their places of business. You can give estimates of drive times or mention the short Cuts that people use to avoid areas of heavy congestion. You may very well learn that the prospect’s principal reason for moving is to be closer to his or her workplace. This will be helpful when you summarize your benefits at decision time. The matrix provides you with a highly visible tool that depicts a significant aspect of a leasing agent’s daily life: awareness of the importance of the proximity of home to work.
People Moving to Town. About 20 percent of rental prospects are new to town. The marketing map is even more important to new people than it is to those who have lived in the area for some time. The out-of-towner can easily make a mistake in choosing his or her place of residence. As a rental consultant, you can be very helpful in explaining the driving distances and patterns that will work the best. Again, your map is a focal point and helps the customer who is new to town to understand the relative distances between work and home.
The Final Decision. Even if you have twenty-five vacancies in a 150-unit apartment complex, you will most likely have more than two hundred dots on your completed marketing map. This happens because many households have more than one person who works. The impact of hundreds of dots on the map announces that you have lots of residents. Many people choose a restaurant on this same premise—the restaurant crowded with customers is more likely to be good. The array of dots on your map has the same reassuring effect. Say, for example, that the prospect works at or near the airport, and your map shows that many of your residents also work in that area. This tells the prospect that others who have to make the same basic trip each work day have found this apartment community to fit their needs. It also appears possible that car pools or an occasional ride can be arranged. It is especially helpful in the rental process when the prospect learns that a number of current residents also work at the same place. This reinforcement may be all you need to close the deal.
Many managers view a competing rental property as a kind of enemy. Be cause of this, they avoid all but the most essential contact with competitors. This is unwise. Yes, it is true that if the property next door didn’t exist, the job of capturing new residents would be easier; but the competition does exist and is likely to continue to exist—even if you could succeed in attracting all prospects. If this were to happen, the existing operator of the competing property would probably lose the investment; but the lender or a new owner would surely arrive on the scene armed with an aggressive marketing campaign (and probably take some of your residents). Apartments are different from other types of businesses. If a shoe store or a grocery store is forced to close because it cannot compete, a different type of business that may have a better chance will probably replace it. An apartment building, however, almost always remains just that. Once com petition arrives, it’s usually there to stay. So, it’s important to learn to coexist.
Most managers have very little first-hand knowledge about their competitors. Typically, the manager will be required to perform a periodic market study, so he or she will call a few neighboring developments to gather information about rent levels and vacancies. Other than that con tact, the only information about the competition is derived from ads and through conversations with prospective renters who have visited other properties.
Your job as a marketer depends on timely and accurate information about your competition. It is critical that you take time each week to up date your information about the community in which your property is located. This certainly includes first-hand knowledge of your competition. Don’t ever trust this job to others; it must be performed by the person who will be doing the future market plan.
It’s best to reserve some time every week—whether it’s an hour or an afternoon—for visiting competing properties. Adhere to this practice with absolute regularity; managers who restrict themselves to their own complexes because of a never-ending workload are usually the individuals with the poorest marketing results. These people are also the best candidates for burnout. Visiting other properties and discussing common problems with your fellow managers will do more than a year’s worth of seminars to help you come up with new ideas and approaches. Property management is a small business, and most managers share a camaraderie that is rarely found in other industries. Take advantage of it.
Choose one of your slow days for visiting (chances are it will also be slow for your competitors). Bring each competitor a copy of your complete brochure with all of the inserts and price information, and ask for a copy of their materials in return. Don’t make the visit an interrogation: It should be two rental professionals sharing their experiences. Learn what units are renting best, the hours of operation, the best days of the week, and how recreational facilities are scheduled. You shouldn’t write any thing down; this often worries the other manager, who might think that an evaluation is taking place.
A visit might take as much as an hour; in one afternoon you could meet and talk with up to four managers. Don’t restrict yourself to complexes running big ads or buildings that are open every day. In virtually every market (even those suffering high vacancy rates), there are proper ties that are fully rented and do very little in the way of marketing. While it may prove more difficult to meet the managers or owners of these proper ties, it is essential that you do. After all, they are doing something right and you need to learn what that is. Another warning: Don’t be influenced by the negative attitudes of some managers (often a problem in a difficult market). Ideally, by witnessing a negative attitude and recognizing that it would assure failure, you can avoid developing the same problem.
Your visits will accomplish at least three things. First, you will learn exactly what you face in terms of competition, and this will be invaluable in preparing your market strategy. Second, witnessing the outcome of other people’s ideas and solutions will help you prepare and present a Superior product. Finally, you will build a file of competitor brochures that will come in handy later in your rental activity.
Have you ever seen a school or scout program in which everyone was given the same materials and guidelines, but it was up to the individual to develop the best plan? Managers of apartment complexes have very much the same challenge. Most start with dull architecture and rooms like sterile white boxes. To these ingredients, the manager adds his or her skills in creating a property personality and the loyal staff to make a difference.
Your visits to competitors will uncover many different potential solutions. You will view something that resembles the results of the school project previously discussed: There will be far more routine solutions than imaginative ones. After you have seen many developments, you will be in an excellent position to judge the differences and to create changes that will set your complex apart.
The benefits of visiting the competition coincide with a great many of the benefits of belonging to a professional association for property managers. The savvy professional always seeks opportunities to meet with others in the industry and share ideas because he or she knows that the best ideas are never created in a vacuum.
I’ll explain how a property manager’s relationship with the managers of competing developments will play a major role in new rental referrals later in this section.
Learn from the Pros
Before you get down to the specifics of a marketing program, you should put yourself through one more learning process. In the property management business, losses are suffered at times and it’s possible to learn from these losses. As first-time buyers, many renters select a home, coach house, or townhouse in a new development rather than a used home offered through a local listing service. When one of your residents gives notice after purchasing a new home, ask him or her about it. Learn the name of the development, the size of the home, the resident’s reasons for choosing it over others, and any other pertinent facts such as the cost and the source of financing. You should be naturally curious about what appealed to your departing resident, and he or she will likely be delighted to discuss this new venture with you.
Your next step is to call that development and inquire about the homes they have for sale. Pay particular attention to the technique that the sales person uses to get you to commit to an appointment. Make an appointment and go visit the development with another person so that the two of you appear as a couple. You might even spend some time preparing so that you look and act like potential buyers. This will enable you to view the complete sales technique. When you arrive for your appointment, pay particular attention to every detail. You are about to receive an important lesson in selling. People who sell homes for a living are almost always commission brokers. These people must sell or they will soon be Out of the business (unlike leasing people who may he paid a salary). Pay attention to the way the salesperson qualifies you according to your needs and the degree of urgency involved with your potential purchase. How are you registered? What did the sales center look like? Were you given a brochure, and when? What did their models look like? Did the salesperson try to match purchase benefits with your needs? Was there an effort made to close the sale? When you said no, did the salesperson try another sales approach?
The selling process, whether for a home or a rental apartment, does not change. The answers to the questions posed above will help you understand how to be a more effective marketer. One of the most common questions asked by people trying to improve their marketing skills is:
“What do I say, and when, to receive the best results?” The answers and techniques are available in a living workshop; just pretend to be a buyer and study the information you collect. You will need to do this at least six to eight times to gain enough experience to differentiate between good and had techniques. At that point, all presentations, both good and had, will contain a valuable lesson for you.
Now I’m ready to address some of the elements you can draw upon to promote your property and develop a solid merchandising program.
Selection of a Theme
If an apartment complex is new or undergoing a major change, take this opportunity to establish a theme to be carried through the entire presentation. If the apartment development is well-established, the theme may he difficult to change, but don’t regard an established theme as irrevocable. If it is out of character with the development, it may need changing.
What is a theme? It is a name and symbol that represent the development and help to attract the public. Many times a theme is suggested by the architecture or surroundings of the property. Perhaps the architecture is Spanish or Western and suggests a relaxed way of life. A traditional style suggests a more refined lifestyle. There are also nondescript architectural styles that lend themselves to almost any theme.
The presence of lakes, streams, groves of trees, or surrounding farm land provides thematic material. The kinds of amenities on the grounds may suggest ideas, too. If there are swimming pools, tennis courts, playgrounds, sailing, fishing, ice-skating—all of these activities point to possible themes.
In considering a theme, it might be helpful to consult with the owner and architect who perhaps had a theme in mind when the place was built. Also, you should certainly consider the market you are trying to reach. It would be inappropriate to create a relaxed and informal theme for a luxury high-rise apartment in the most exclusive part of town.
Names and Symbols
Themes are evident in the names of developments and in the symbols chosen to represent them. Most garden-apartment complexes are identified by distinctive names (e.g., Knollwood, Glenfleld, Versailles) whereas in-city apartments are commonly identified by street numbers (e.g., One City Center, 1000 Lake Shore Drive).
It’s very important that the name and symbol be presented in a unified manner. Too often a name will he used one way in a newspaper advertisement, another way on a building sign, and still a third way on a brochure. All of this is self-defeating because you’re not building a Consistent image in the minds of the prospects.
Consistency is a key element in marketing and particularly in using a theme. It conveys a sense of order that is very reassuring to prospects. When they see a clear and uniform theme, prospects gain respect for your operation. Consistency is important for another reason: It helps to reinforce your development’s name in the customer’s mind.
If prospects see many variations of a development’s name, (through changes of color, style, placement, etc.), they may not recognize it as the same development. The name is the same but the impression is different. If the name and symbol are always the same, the repeated impressions will leave their imprint.
It’s important to develop a unified name and symbol very early so you will be able to use them consistently throughout your presentation. To do this most effectively, work with a competent graphic designer, either an independent studio or someone from the staff of an advertising agency. Select a qualified designer because you’ll have to live with the results for years.
The significance of a professional design cannot be overstated. Corporations spend millions of dollars to develop trademarks and logos to help identify their products and promote them in the marketplace. Fortunately with apartments, the task is smaller; costs are much less, and these costs are incurred only once.
In developing a graphic treatment of the name and symbol, keep things simple. The name will be used in a variety of applications: signs, letterheads, brochures, etc. The simpler the design, the more useful it will be.
Fig. 8-179: Directional Billboards: These signs are intended to direct, not to sell. The sign illustrated at the top is an example of an off-site directional billboard that might be used on a limited-access highway. The directions are clear but brief. Arrows or additional instructions are not always necessary if the way to proceed is clear.
Unified Graphics System
A professionally designed treatment of the development’s name and symbol is just the first step. Also needed is a unified graphics system that spells out the ways the name and symbol are to be used and how you should handle everything else that relates to your property and appears in print. Ask the graphic designer to prepare a graphics manual that shows exactly what is permitted and what is not. The following are items that should be included in this manual.
Name and symbol. Type size and style (typeface), exact ink color.
Stationery. Exact placement of development name, symbol, address, and telephone and Fax numbers; specific color of paper and ink; type of paper. (This includes letterheads, envelopes, statements, labels, and so on.)
• Business cards. Placement of the development name and symbol, ad dress, telephone number, and person’s name and title (if any).
• Signage. Type size and style, placement of development name and symbol, background and other colors.
• Brochures. Type size and style, placement of development name and symbol, ink and paper colors.
• Advertisements. Format of ads, type sizes and styles to be used, placement of development name and symbol, margins, use of abbreviations and other constant elements.
• Vehicles. Color, placement of development name and symbol. (This would pertain to company cars and trucks.)
These are just starting points. The graphic designer should examine everything that will bear the name or symbol of the development and include these in the graphics manual. Then make sure that everyone in the organization who has anything to do with ordering signs, ads, printed materials, or similar items has a copy of the manual and follows it. It also is a good idea to give copies to your sign painter, printer, newspaper account executive, and advertising agency and insist that they, too, follow the instructions.
Fig. 8-180: Directional Signs: The two signs at the top are examples of reassurance signs, sometimes called trailblazers. They are usually small, inexpensive, and placed on poles along the route. Note the use of reverse colors. This attracts more attention and is easier to read. The model and information sign at the bottom is an on-site, lead-in sign used to direct prospects. These signs should be used sparingly but enough to avoid confusion.
Once a theme and name have been selected, a symbol designed, and a graphics manual prepared, you’re ready to tackle the all-important challenge of signage. As a general observation, signs are often badly designed and grossly overdone. The average American is exposed to thousands of signs every day; most are totally ignored. When designing signage, you should be mindful of any sign ordinances that may affect the type of sign you are allowed to post or the manner of its display. If signs are going to have any effect at all, they must always be consistent with your graphics system and they must meet these minimum standards.
1. Signs must always look fresh and clean—as if they had been put up that day. Otherwise, they will present a poor image of your development, and people will ignore them.
2. Signs must be at right angles to traffic, not parallel. Otherwise, they will be hard to notice and read. People should he able to read the sign’s message through the windshield of a car traveling at the posted speed limit at least 150 feet from the sign.
3. Signs should have no more than eight words. If there are too many’ words, people riding by in autos won’t be able to read and interpret the message.
Signs serve four basic purposes: promotion, direction, identification, and information.
Promotional Signs. Signs in this category are primarily off-site bill boards (discussed later in this section).
Directional Signs. These signs direct prospects to the complex and, once inside the complex, to the rental information center. The number of directional signs needed and where they should be placed depends on how difficult it is to find the property. Generally, if the project is on a well- traveled road in the midst of competing developments, a good entry sign is sufficient. If the property is in a remote location, directional signs can be helpful. Remember: The sign is meant only to give directions—not, to sell.
Another form of directional signage is a reassurance sign, sometimes called a trailblazer. It reassures prospects that they have indeed made the proper turn and are on the right track. If you’ve ever been to a company picnic in a rural location, you’ve probably seen homemade signs on telephone poles to help lead the way. These were reassurance signs. Reassurance signs should not be homemade, but they should be inexpensive because their life span is usually quite short.
As Prospects turn into the driveway, they should see a sign directing them to the rental information center. As they proceed along this drive, there should be similar signs at turns or intersections so drivers know exactly how to proceed. Once prospects reach the parking lot, one or more signs should direct them to visitor parking spaces. Signs in the parking’ area should guide the visitor to the rental information center. If necessary, directional signage should continue into the building so prospects know exactly where to go. All of these signs should conform to the specifications in the graphics manual to reinforce the image you are trying to convey.
Identification Signs. This category includes the most useful signs. The most important sign of this type is called the permanent identification or keystone entry sign. This is a permanent sign that establishes the character of the development and is both substantial in construction and architectural in design. It usually displays little more than the development’s name.
When designed correctly, a permanent identification sign is usually expensive. It should be lighted and made part of a landscaped setting designed for change of seasons or year-round plantings. In the case of a high-rise structure, an engraved plaque that coordinates with the building can be very attractive; printing the apartment name on an awning is another way to identify the high-rise apartment complex. The majority of renters will come as a result of just driving by the development. This sign will be one of their first contacts with your property. If given $5,000 to spend on both an entry sign and a brochure, a property manager would be better off spending $4,900 on the sign and only $100 on the brochure. The sign will draw more traffic and make a greater impact than most of your other promotional activities.
Other identification signs include building address signs and those that identify recreational and supporting amenities, such as swimming pools and laundry rooms. Signs identifying the rental information center, visitor parking, and recreation center are also in this category. These signs, as well as all other forms of signage, should be used sparingly to avoid cluttering the landscape.
A telephone number is also an important element on rental signs because people frequently drive through neighborhoods when they’re selecting a location. Once a prospect establishes a preferred area, he or she begins to note the best-looking rental communities. It is becoming more and more common for prospects to make rental inquiries using telephones that are installed in their cars.
Informational Signs. These signs have the least value and generally should be avoided. The most common of these are called command signs. They include notices put up by property managers who like to give commands. Command signs say: “Keep off the grass,” “Close the door,” “Put garbage in dumpster,” “Don’t post messages on mailbox,” or “No boots in hallway.”
Usually the manager posts such a sign to deal with an immediate problem and then forgets about it. Often the signs are crudely made and some times they can be confusing. One manager posted a “No hot water” sign when the plumbing in the laundry room was being repaired and forgot to take the sign down later. Imagine the bewilderment of residents trying to do laundry a few days later after the plumbing was back in order! Residents quickly learn to ignore such signs if they read them in the first place.
Managers should stay away from these “don’t” signs. Instead of posting a “Close the door” sign, get a door closer. Rather than using a sign telling residents not to put their boots in the hallway, state this rule in a letter sent to residents at the start of the snow season. If there are signs telling people to put their garbage in the dumpster or not to post notices on the mailboxes, remove them immediately. They only create a negative image for the property.
Some informational signs are necessary and required by law (e.g., swimming pool rule signs). Comply with the law, but do not add any unnecessary signs or posters.
Finally, there is another type of informational sign that finds its way into apartment complexes. Contractors, suppliers, and others like to post signs on developments to advertise themselves. Furniture rental companies and apartment locator services are other examples. Calendars, scratch pads, and ashtrays carrying other firms’ advertising have no place in the office or rental areas. Don’t allow them, and remove them if they appear. Establish a policy forbidding the placement of other firms’ advertising on your property, and stick to it.
Fig. 183: Identification Signs: These signs are used to identify important buildings and locations as well as individual apartment buildings. They can be installed either as plaques affixed to buildings or as free standing signs on standards. The design and the use of logo, color, and type style should be consistent with the development’s graphic plan.
Rental Information Center
Some rental offices look cold, harsh, and commercial. The furnishings are severe and may include a metal desk and some uninviting side chairs. The desk is covered with calendars, appointment hooks, application forms, and five-day notices. Everything shouts: “This is the place where the land lord conducts business!”
Prospects do not necessarily come to rent; they come for information. The appearance of most rental offices makes many prospects feel uncomfortable. They are on guard and antagonistic in an office situation that makes them think they’re applying for a loan.
Furnishings for your rental information center should be residential in scale. Choose comfortable chairs and round tables. Create a warm, inviting atmosphere that says “Welcome!” Use bright colors to liven up the surroundings. Serve coffee in the winter, iced tea or lemonade in the summer, plus cookies. This will help put prospects at ease.
Round tables are especially important. When you and the prospect sit down to discuss the apartment and lease application, having a desk between you creates a head-to-head selling situation. You want to be on the prospect’s side, and a round table accomplishes this automatically.
Providing a place for children to play is a definite asset and well worth the expense. Parents can ask questions without interruption, and the manager does not have to worry about bothersome noise or possible breakage.
Exhibits in the rental information center are important. They are needed to give information about the development and provide a diversion for waiting visitors while you’re involved with other prospects. No one wants to stand around gaping at plain walls; people welcome the opportunity to look at something informative. Exhibits serve another function; they give prospects a somewhat private area in which to discuss the lease terms.
For exhibits, you can use scale models of the development, a site plan, photos of the building, enlargements of floor plans, photos or sketches of amenities, lists of features, and an area facilities map. One of the best exhibits is a large aerial photograph of the development showing its relation to the rest of the community. People enjoy looking at where they are on the photo and identifying familiar sites.
Some apartment developments go so far as to have brochures of competing developments on display. This enables the rental agent to compare the development with others and to respond to prospects who say they want to see what the competition has to offer before making a decision.
If model apartments are in the same building as the rental information center, you may want to extend the graphics or exhibits into the connecting corridor so prospects continue to receive a favorable impression as they walk to the model apartments.
Fig. 8-184: Informational Signs: Shown here are examples of informational signs. Such signs should be used sparingly; use them when they are extremely important or required by law. Too often, informational signs are command signs that are hand-lettered on-site. They frequently are graphically inconsistent, rarely obeyed, and irritating to residents.
A well-furnished model apartment is an essential part of the marketing program for developments in their initial rent-up periods, for larger complexes that must deal with a steady flow of apartment turnover, or for those suffering from an undue number of vacancies. An attractive model expresses a lifestyle that cannot be verbalized, only experienced. Observe the following points when you’re setting up your models.
One Model or Two? First you must decide how many models to prepare. The budget will probably dictate the answer to this question. Two models allow you to demonstrate two completely different decorating solutions. Taking prospects from one to the other, you can demonstrate the adaptability of the apartment design. Also, furnishing two models allows you to show two different lifestyles: one that appeals to the younger renter and another that caters to a more mature person. Having more than one model makes for a longer tour which in turn gives your rental staff more time with the customer.
When the models are decorated in completely different color and decorating schemes, it allows the leasing agent to ask for an opinion, which can be very helpful when it’s time to help the prospect arrive at a decision.
If you have a full range of unit sizes and they all enjoy about the same market appeal, model the smaller units. Efficiency apartments, in particular, tend to look small when they’re empty. Also, a creative furniture layout and decorating solution can change a one-room apartment into a cozy, functional home. If you have efficiency apartments and choose to prepare a decorated model, you must certainly do a one- or two-bedroom unit as well. A furnished and decorated efficiency apartment will help in the marketing of that type of unit but will be of little value to a prospect who is interested in some thing else. In fact, if you take a prospect to an efficiency unit after the desire for a one-bedroom apartment has been expressed, he or she will probably become irritated, believing that time is being wasted.
Whether you model a one- or two-bedroom unit, decorate only one bedroom as a bedroom. Bedroom decorating is usually boring (so there is little to be gained by showing more than one bedroom setting). Apartments with two bedrooms and one bath are some times more difficult to rent. Showing a unit with the second bed room furnished as a den, hobby room, get-away-room, etc., will do much more to attract renters than decorating another bedroom. If people need the room for a bedroom, they can certainly visualize how it will appear. They probably already have the bedroom furnishings and most bedroom layouts allow for little variation. Be cause of this, there is no reason to furnish three- or four-bedroom units. Doing so simply increases the overall costs.
• For a model apartment, select one of the least-desirable units, not one of the best. This may sound odd, but it isn’t. Prospects are quick to detect the advantages of an apartment with an exceptional layout and location. Decorated model apartments will help equalize the worst apartment layouts. The poorer layout will gain desirability when creatively decorated. The better layout can stand on its own without the help of sample furnishings. Owners and developers often model only the best layouts. This leads to an unbalanced rent- up; the better layouts rent quickly and the less-desirable units move slowly and don’t realize their rent potential.
• Stay close to the office. Surveys have shown repeatedly that model apartments are often left out of the rental presentation, usually because the decorator model was too far away and the prospect had a tight schedule. In all likelihood, the rental agent was trying to shorten the showing time by eliminating the trip to one or more models. When the model is not shown, you negate the expense of having created it and lose all the benefits a model offers to the marketing process.
• Choose first floor units. In walk-up properties, it is important to have your models on the first or ground floors because they offer easy access. Some apartment managers might be afraid that first-floor apartments present too great a risk of break-in or burglary. This is a terrible endorsement even if the prospect never learns of that fear. The fact that the manager’s thinking runs in that direction is an indication of the lifestyle being offered. If the model furnishings are not safe on the first floor, how safe are the possessions of the residents?
Having the models on the lower floors is also important for customer convenience and accessibility. Some prospects have difficulty negotiating stairs and in those cases, upstairs models will not play a role in the marketing process.
• Make the decorating and furnishings of the model truly outstanding, not mediocre, regardless of your market. The more dramatic the approach, the better. While the model may be beyond the average prospect’s means, it should not be beyond his or her dreams.
• A model apartment is intended to be looked at—it is not for living. Common furnishings, such as a triple dresser in a bedroom or a TV set in the living room, take up space and do little to enhance the atmosphere of a model. Even a shower curtain that is fanned across the bathtub does much more damage than one might imagine. Most apartment bathrooms are tiny, maybe five by seven feet, and hanging a shower curtain visually reduces the room size. Place stacks of colorful towels in the tub instead. They aren’t going to get wet because no one is going to be showering here.
In the past, property managers and developers would hire furniture stores to decorate model apartments. Managers got the job done for little or nothing in return for promoting the store name in the models and in advertising. As a result, most models looked homey and comfortable, but they made little impact on prospects. Too often, this arrangement reflected the inventory of the store rather than the goals of the rental program.
The use of rented furniture yields the same results. The style and quality are often mediocre and add absolutely nothing to the appeal of the apartment.
I recommend hiring a competent interior designer—give this professional free rein to decorate the apartment and make the most of its advantages. The results may he startling; no doubt they will be memorable as well. People will come to see the model apartments and talk about them—and this builds traffic. Prospects may not want to live in such a daringly decorated apartment, but people will remember it. High-income prospects will expect to see something innovative in decorating, and moderate-income prospects will be flattered by this approach. Either way, you’ll impress your prospects and give them something to remember.
If you have used unusual decor, don’t worry about recovering the cost of the furnishings. When the time comes to close the model, chances are that you can recover 60 percent or more of their original cost. With mediocre furnishings, you will be lucky to recover 30 percent. The difference is that people are willing to pay more for decorator merchandise, whereas they know they can get conventional furnishings anywhere.
Do a complete decorating job. Decorate right down to the accessories. This includes flowers and place settings on the tables, books on the shelves, guest towels in the bathroom, and interesting utensils in the kitchen.
Don’t go too far, however. Some managers think it’s a good idea to put food in the refrigerator, towels in the closet, even a half-eaten cookie on a plate to convey the sense that someone lives in the apartment. This is not wise. Prospects will think they are intruders in someone’s private home. If they open a closet and find towels inside, they’ll often shut the door quickly. Furnish the apartment like a model, not like a home. This means no magazines or clutter. Re member, a weekly magazine is only one week away from being out- of-date. People want new and up-to-date ideas, and they will be less inclined to garner them from models that seem to be old. Also, keep in mind that clutter is one of the reasons people move. House and garage sales are evidence of this. The opportunity to reorganize pos sessions and discard things that are no longer needed is one of the few advantages to moving. Keep this in mind; your models should look clean and uncluttered.
If someone wants it, rent it. Imagine that you work in a clothing store and a gentlemen walks in and wants to buy the outfit on the mannequin. Would you sell it to him? Chances are excellent that OU would. In fact, why not? The mannequin is a selling tool and its purpose is to show off the clothes to their best advantage. In the example it did just that. Obviously, if the same items were hanging on the rack, they would be sold before dismantling the display; but if the mannequin displayed the only such merchandise in the store, it would be sold. Mannequins have the advantage of displaying an en tire ensemble (which is what a model apartment often presents).
The same rule applies to renting a model apartment, and renting offers advantages that compensate for the extra work involved in creating a new model. First of all, you should be able to rent the model with its special decorating for a premium rental rate. Whenever you can improve an apartment so that you can charge a greater rent for it, that is known as value added. It’s one of the most important things you can do in the operation of rental properties. Remove the furnishings and use them in your next model with some new twists or modifications—now you have the opportunity to create an even better, more-creative model. New and exciting models renew the enthusiasm of the entire staff—especially the leasing agents. After showing the same model for months (and maybe even years), agents are certainly bored and often embarrassed about its age and condition. Thus begins the tendency to skip the model tour.
Once a model is set up, keep it in first-class condition. Have the maintenance crew vacuum the carpets every day and make sure that ashtrays are clean, bathroom fixtures are sparkling, and everything else is in good order. Expect to discover the loss of some accessories, and replace them quickly when that occurs. Don’t let the model apartment take on a run-down appearance.
Use model apartments only so long as they are useful in the leasing program. When occupancy reaches 90 to 92 percent, you will be in a good position to sell the model furnishings. The remaining apartments can he rented by showing vacant units. At that point, the models probably will show wear and tear as well as age. Despite their innovative good looks when new, styles will change and your models will begin to look dowdy. So, it’s a good time to close the model.
Some model apartments are shown long past the time when they should have been put back into the income stream. Managers may insist that models are necessary when, in fact, they are maintained as a crutch because the manager is slow to put the vacant apartments in proper market-ready condition.
In some cases, models are maintained beyond their useful lives because they are used as guest apartments for the convenience of important guests or visiting owners or even supervising managers. This is not recommended. Prospects inspecting these apartments will see partially used bars of soap and rolls of toilet paper, as well as soiled glassware and utensils. It doesn’t take long to deduce that someone lives in the apartment. At this point, prospects feel they are invading someone’s privacy and become anxious to leave. Also, as mentioned earlier, avoid an office and model combination. Each has its own function, and the two do not mix.
In my opinion, there are two situations in which it may be necessary to maintain model apartments permanently. The first situation is occasioned by a structural feature. If the normal ceiling height in your apartments is nine feet rather than the more standard eight feet, the extra height can make empty units appear smaller than actual size. People think that higher ceilings always make rooms look more spacious, but I disagree with this in the case of empty rooms. Empty rooms with higher ceilings appear smaller because people have become accustomed to eight-foot ceilings. When a room is vacant, prospects will tend to refer to a room’s height to gauge its length and width. A furnished model apartment demonstrates that standard furniture, and particularly queen- or king-size beds will fit nicely. When prospects see a furnished room with higher ceilings, they use the furniture as a gauge. Suddenly the ceiling height works to your advantage and the room appears larger.
The other permanent model situation is in a high-turnover project. Such a project should always have a model unit for showing to prospects. It is especially important that these models are always on the leading edge in order to achieve the maximum impact on rental prospects.
If you are managing a development in which new buildings are being opened in successive years, relocate the models to the newest building. You may reuse some of the old furniture by having it cleaned or recovered, but you’ll want to emphasize the newness of the new buildings by having up-to-date models. Doing this creates one unavoidable risk: Renters living in buildings that were opened earlier will be attracted to the new models and may want to transfer to the new building. The risk is worth taking in view of the drawing power these new models will have to entice new prospects to the most recently opened buildings.
Brochures and Collateral Material
Contrary to what many people think, a brochure has little value in renting apartments. Admittedly, this is not true for condominiums or new houses. In these cases, a brochure is an important selling tool because the decision to buy is rarely made on the first visit.
In the case of renting apartments, however, about 65 percent of all rentals are made on first visits. For these people, a brochure is a post-selling tool. It helps reassure people that they’ve made the right decision, and it covers any questions that may not have been answered.
The remaining 35 percent of rentals are to people who require a bit of extra convincing, and the brochure is intended for these people. They visit five or six developments in a day’s time, are confused by what they see, can’t remember one project from the next, and use the brochures they have collected to help them sort Out what they have seen.
The brochure should be simple, direct, clear, and inexpensive. A very slick and superlative-packed brochure can do more harm than good. Prospects don’t want to be sold; they want to be informed. Give them the facts with a straightforward narrative message that is specific to your property. Don’t try to win them over with gimmicky copy. For example, here’s the kind of brochure copy to be avoided:
Four hundred acres of natural beauty. The cool tranquility of a mile-long lake and winding streams. Oak trees, pine trees, and willows. Brooks, glens, and glades. Wildlife. Flowers. Heavenly Manor offers apartments in the midst of one of the most beautiful settings in our area.
That’s a lot of descriptive copy, especially considering that it describes nothing about the complex. Such copy says little and is a turnoff to the reader. Instead, use copy like this:
We’re at Lake Drive and Lynn Lane, with easy access to shopping, business, churches, and schools. Lake Louise, just five minutes away, offers sailing, fishing, golf, a park, and picnic areas. The airport and downtown are twenty minutes away. Choose from four large floor plans—one-, two-, and three-bedroom units, each with a den. Each has lots of closet space. Washer and dryer in every unit, hi-tech kitchens, and individual climate controls.
When it comes to illustrating the brochure, use actual photographs wherever possible; stay away from renderings of buildings. People are often suspicious of artwork.
One word of caution: Don’t illustrate anything in the brochure or write about anything that won’t be in your development. The brochure will likely end up in a prospect’s drawer only to he interpreted later as an implied warranty. For example, if you picture a woman with a tennis racquet and you don’t actually have a tennis court, the prospect may use this to claim that you promised tennis courts. The same is true for any other feature or service that is mentioned, or implied, but not actually provided.
Finally, be sure the brochure includes the name of your development; complete street address, city, state, and zip code; and telephone number with area code. This is particularly important for prospects who visit a number of developments in different suburbs or cities. Without this information, prospects may not remember who or where you are.
The same identifying information should be on floor plans and the Site plan if these are inserts to the brochure. Floor plans should be as large as possible; larger than six by eight inches is recommended. People have problems interpreting small floor plans, so make them big. The larger the floor plan, the larger the apartment appears in the prospect’s mind. Also, remember to include dimensions on the floor plans for all major rooms.
Site plans are good for a multi-building development. A site plan identifies all the amenities and helps orient the prospect to a particular building and its location relative to other buildings.
Besides the brochure, floor plans, and site plan, other items that come under the general heading of collateral sales material include:
• Letters or cards sent to prospects after they leave to thank them for their visit. These should be signed by the rental agent who helped them.
• Postcards with a picture of the development. These can be picked up by prospects in the rental information center, or they can be used by new residents to notify friends of their new address.
• Hard candy wrapped in paper imprinted with the building or project name and logo.
You’ll discover other collateral promotional items, too. Just make sure they tie in with the development’s theme and conform to the unified graphics system.
The Two Types of Advertising
In an earlier section, it was noted that 54 percent of the people who rent apartments do so because they liked what they saw when they drove by. This leaves 46 percent whose visits to the property were prompted by other reasons. As a matter of fact, experience shows that only 20 percent of those prospects who become residents are attracted by paid advertising, and then it’s usually the classified ads in the newspaper. So, while advertising has a role to play, its value in renting apartments has been greatly over rated. Keep this point in mind when you attempt to step up a lagging rental program by increasing the advertising.
Another guideline will help direct your advertising strategies: In a stabilized program (i.e., an established development), only 0.75 percent of the gross income constitutes the size of a typical advertising budget. Such budgeting guidelines are not meant as absolutes, however. Weak or “soft” markets will always call for greater advertising expenses, while just the opposite is true in strong markets.
Many types of advertising can be used for your property: daily news papers, radio, television, billboards, direct mail, and the telephone directory. The merits of these will be discussed one by one. But first, consider the two major types of advertising.
Institutional Advertising. Its purpose is to establish an image, theme, status appeal, lifestyle, character, and reputation for a development. It does not focus on specific apartments for rent or call for an immediate response. Rather, it seeks to remind the public about the development.
Institutional advertising is appropriate for a large project that will take several years to complete, such as a high-rise tower, planned-unit development (PUD), or a garden complex opening in phases. This kind of advertising helps to establish the name of the project and keeps it before the public. In some cases, it may compel a person who is in the market for a new apartment to come out and see the property. The purpose of institutional advertising, however, is not to prompt an immediate response but rather to establish a long-term image.
Promotional Advertising. The objective here is to produce immediate interest in a specific product or service. Promotional advertising focuses on one or two items, is run in media conveying a sense of immediacy (such as the newspaper), and calls for prompt action.
It is easier to understand the difference between institutional advertising and promotional advertising with examples.
Institutional advertising says: “Come live in Happy Acres, where we have one-, two-, and three-bedroom apartments renting from $500 to $850 per month.”
Promotional advertising says: “For rent—two-bedroom apartment, utilities included, washer-dryer in apartment, recreational facilities, $780 per month. Happy Acres, 415 Lynn Road, Westhury, CT., (555) 555-5555.”
The institutional ad covers generalities, the promotional ad addresses specifics. You’ll discover that promotional advertising will usually be more effective than institutional advertising in renting apartments.
This refers strictly to the advertising of rental properties, not condominiums or other for-sale properties. These require an entirely different kind of advertising philosophy and approach.
Some property managers believe that a continuing program of newspaper advertising, especially on weekends, is absolutely essential in order to rent apartments. They believe that if they run an ad on Saturday or Sunday, prospects will rush in to rent apartments.
This isn’t so. To find out for yourself, conduct this test. Discontinue all newspaper advertising for one or two weekends and take note of the difference in traffic count. You probably will see no change in rental traffic.
There are several reasons for this. First, most rental prospects are drive-bys; they come in whether you advertise or not. Many are drawn by the advertisements of your competitors; while they’re in the neighbor hood, they stop in to visit your development. This works in reverse when you advertise: Your ads will draw traffic that will visit the competition. The best-looking property will come Out ahead in this traffic trading. Finally, many prospects are already aware of your property and will not be influenced one way or the other by advertising or a lack of it.
This doesn’t mean that you can skip advertising altogether. Before you can check the consequences of discontinuing ads, you have to start a newspaper advertising program to get your name established. Beyond a certain point, however, newspaper advertising seldom produces any additional traffic and, in fact, may be discontinued for short periods without affecting rental traffic. Some advertising must be done because of that 20 percent segment of residents who are drawn by it and have no other way of learning about you, but don’t just rely on newspaper advertising to generate prospects.
Fig. 8-194: Classified Ads -- Classified ads are the most common and typically most useful form of promotional advertising for rental apartments. Every ad, regardless of size, must answer the three basic questions prospective residents ask: What do I get? How much does it cost? and, Where do I find it? A series of different ads of varying sizes is recommended to attract maximum readership.
Let’s look at the limited impact of newspaper advertising from another angle. You don’t really sell apartments; you give prospects the information they need to make their housing decisions. Actually, people make up their minds to change living quarters several months before setting out on their first trip to look at available housing. People can be expected to scan newspaper ads for a full six weeks before they leave their living rooms.
What prompts people to start looking for new apartments? The action is triggered by a series of incidents. Prospective renters may be vaguely discontented with their present apartments. The closets are small and overstuffed. Perhaps the owner or property manager is not responsive to requests. Maybe their children are having bad experiences at school, or the long drive home from work is just too much. One or more of these dissatisfactions can build up, reaching a peak in the two- to four-month period before apartment hunting actually begins.
During this time, renters have been aware of institutional ads pro claiming the wonders of this community and that one. Those ads contribute to a general feeling of dissatisfaction, but they don’t spur prospects to action. As a matter of fact, they can have the opposite effect. Because of the size and image-building character of institutional ads, they may convince prospects that the development is beyond their budget. The most that institutional ads can do is plant a seed that a better lifestyle exists.
Finally, in the few weeks before the actual shopping begins, prospects start studying classified ads. Instinct says that if there are any real bargains, they will be in the smaller classified ads, and not in the larger display classified ads placed by major complexes or realty companies. Then one weekend when the weather is nice (but not too nice), or the present manager has failed again, or a particular ad promises an unusual value—the shopping begins.
The people who respond to your ads undoubtedly have followed similar patterns. Their need or desire for a different place to live began months before, followed by weeks of comparing ads, and ending now with actual physical inspections. If your ad appears on the weekend the prospects decide to shop, they might show up at your doorstep in response. This requires a bit of coincidence, the right timing, and some skill in the art of writing an effective ad. Coincidence is pure luck, timing will come with experience, and the skills of preparing an ad can be learned. Consider these points in understanding the three types of newspaper advertising.
• Class. The name comes from the fact that this kind of advertising is classified by subject matter—jobs wanted, jobs available, goods for sale, homes for sale, apartments to rent, etc. The ads are grouped together in one section of the paper and generally run in one-column widths, using the uniform typeface and format of the newspaper.
• Display. These ads appear throughout the newspaper; they use illustrations and a variety of type styles.
• Display Classified. This is a hybrid type of ad that is located in the classified section of the newspaper and utilizes the artwork and type style variety that a display ad might have.
Fig. 8-197: Display Ad -- Display ads create awareness. They are generally used for a grand opening campaign or on an ongoing basis for a large multiphase development. The sample ad shown here (obviously reduced in size) might be used as a full-page ad in a magazine or newspaper. Note that this ad answers the three basic questions prospective residents ask.
In most cases you will find that classified advertising is the most productive of the three types. It is recommended for all promotional advertising.
Regardless of what type of newspaper ad you run, the ad should answer the prospect’s three primary questions:
1. What do I get? This means describing all the features of the property, beginning with the apartment. Start with the number of bed rooms; that’s the first thing prospects want to know. Then specify such things as the number of baths, kitchen equipment, carpeting, drapes, air conditioning, method of climate control, utilities, fire place, washer/dryer connections, and storage space. Go on to list the recreational amenities: swimming pool, sauna, tennis courts, playground, sun deck, lake, or putting green.
These features can be set down in either a narrative or paragraph style, or in a bulletin or list style. It’s a good idea to vary the form so your ad doesn’t look the same each weekend.
Don’t use too many abbreviations! BR, Kit., fpl., tn.ct., and A/C may be intelligible to you, but the reader may not understand. In any event, abbreviations impede easy reading of the ad. Generally understood abbreviations are permissible (e.g., Apt., St., Ave., Blvd., Dr.).
To attract different markets and add variety, try switching what you have to offer from week to week. For example, advertise one- and two-bedroom apartments to attract one segment of the market one week. Then you can advertise three- and four-bedroom units to appeal to the family market the next week. Don’t put everything you have to offer in a single ad, or you’ll confuse the prospect. Re member, each prospect is looking for only one apartment and is not really impressed by your ability to accommodate all family sizes. If you have different-sized apartments to offer, it is better to run separate ads in successive weeks than to promote all of them in one ad.
2. What does it cost? Some property managers are not sufficiently confident of their rental pricing to list the rent in the ad. They hope that prospects will accept the rent after seeing the apartment. However, for every prospect who is drawn by an ad without a price, the manager will lose ten to fifteen others who won’t come because the rent isn’t listed. This is a terrible waste. Make the ad work for you, not against you.
If you don’t want to list a specific price, it’s perfectly all right to use a leader price: “From $485.” Or, you can give a rent range:
“Apartments from $525 to $780.” In fact, promoting the top of your rental price range can add to the status of the property. Even if prospects can only afford the lower end of the range, they will en joy being associated with a complex that commands higher rents.
3. How do I find it? It’s hard to believe, but the directions in many ads for suburban garden complexes are incorrect. Often, the person who writes the ad knows the route well and, because of this knowledge, omits a vital step in spelling out the directions. This point can be proved by going to a strange city and attempting to locate an apartment complex from the instructions in a newspaper ad.
Location instructions should be crystal clear. Start from a major expressway or major arterial street. Identify this Street by its most commonly known name and route number. Sometimes a major expressway or Street is known by different names as it passes through different communities within the same city, making a route number helpful. Make sure the mileage noted in the ad is correct.
Identify the exit by name and number. Be sure this name and number are visible to the person on the expressway. You may know the exit as Main Street because you travel this route every day, but all the prospect has to go by is Exit 14. Drive by the exit sign your self to make sure the driving instructions in the ad are correct.
Also, make sure the exit is identified from all directions. A prospect driving westbound may be able to turn off at Exit 14, but an eastbound prospect may see a different number or, worse yet, there may be no exit from that direction. In that case, you’ll have to include a different routing. Tell the prospect whether to turn right or left from the exit, then continue to specify all the streets leading to your property. Spell Out the instructions carefully. It helps to have your directional signs along the way, too; but as noted earlier, these signs can be removed or knocked down, so don’t count too heavily on them. Make sure the instructions are clear and complete so the prospect can find your property without signs.
There may he a choice of routes to get to your development. The most direct route may lead prospects past unattractive scenes or competing developments. Real estate agents who sell homes are careful to take prospects along the most scenic route, even though it may take longer. One problem with suggesting scenic routes is that the directions may run counter to directional signage.
If prospects still have difficulty finding your apartments, the answer may be a display classified ad that includes a map. The map should be to scale, not distorted, and it should indicate mileage distances so prospects have some indication of how they’re proceeding and their location in relation to major landmarks.
It’s crucial to keep the three basic questions in mind when developing your ads, but there is much more to learn about the inexhaustible subject of newspaper advertising. The following are recommendations regarding the appearance and placement of ads. We’ll also address a few less conventional types of newspaper ads and their applications.
Headlines. Catchy headlines don’t catch. They may make prospects think that some clever salesperson is out to get them. Serious classified ad readers don’t want to be entertained. They want to know how many rooms your apartments have, the features, amenities, price, and location. For a headline, it’s better to use the number of bedrooms, the name of your property, the area of town if it is very desirable, or the street address if it is well known and follows the established numbering system.
The importance of a telephone number. What about telephone numbers in ads? People have little time to waste these days, and they use the telephone to avoid unnecessary trips. The telephone number has become an important ingredient in rental advertisements, even though it would be preferable to have the prospect visit personally. I will expand on telephone techniques later in this section.
Listing the telephone number is also helpful to prospects who start out for your complex hut get lost and need additional instructions. More and more, telephone calls originate from the prospect’s car telephone.
Ad size. Prospects think that the true bargains are in the smaller ads.
The one exception to this rule, grand-opening ads, will he discussed later. No matter how small the ad is, just make sure it answers those three important questions.
The most successful classified ads are the smallest and advertise the fewest units. As stated earlier, try to avoid advertising more than one type of unit. Each prospect will only rent one apartment. By advertising one unit, you create a sense of urgency, which is exactly what you want to do.
Large ads are self-defeating. The prospect who sees a large ad is apt to think that you have a correspondingly large number of apartments to rent or that the ad is expensive, so the rent must be, too.
Apartments in plentiful supply or ones that appear to be moving slowly attract little response. Prospects are looking for the rare find.
A small ad helps convey that impression. Newspapers traditionally arrange classified ads by size, with the large ads at the top of the page and the smaller ones toward the bottom. It’s a good idea to vary the size of your ad from week to week so the newspaper will move it around on the page. This way there is a better chance of catching the roving eye of the prospect, and your ad won’t be stuck in one position.
Type size. The newspaper ad salesman will tell you that large type is easier to read. Naturally, he or she wants to sell large type in order to make the ad larger and sell more space. Don’t be afraid to use standard-sized newspaper type for classified ads. When prospects read the classified pages, their eyes adjust to the small type, and they’ll have little trouble reading your ad.
White space. The newspaper ad salesman also may advise you to use plenty of white space in your ad. This can be overdone. Classified ads call for the judicious use of white space. A classified ad that is crowded from corner to corner can be very effective. Display ads, however, may benefit from the dramatic appeal of some extra white space.
Choice of newspaper. In most metropolitan areas with more than one daily newspaper, one is usually recognized as the leader in apartment ads. That’s the paper to use. You’re wasting money advertising in the others.
Community newspapers offer another opportunity. These papers are often published weekly or biweekly, and they cover a smaller geographic area than the dailies. A prospect who is looking for an apartment in a specific area may well check a local paper first.
If you use both the leading daily and a community paper, alternate your placement so ads do not run in both papers the same week. This will stretch your advertising dollars and allow a better evaluation of the response level.
Frequency. Sunday advertising is essential; that’s the day most prospects look for apartments. Other than Sunday, one weekday is all that is ever recommended. Don’t advertise more than twice a week in one newspaper.
Advertising on one weekday can he effective. This weekday ad can be smaller than the Sunday ad because there generally are fewer weekday ads to compete against. Also, the person who looks for apartments during the week is a more serious shopper than a Sunday prospect. Many transferees, students, military families, and others who must locate housing quickly shop during the week,
When scheduling ads, take holidays, season of the year, and weather into account. Don’t blame the advertising if the weekend offers the first balmy days after a dreary winter—people would rather stroll in the park than visit apartments. Don’t expect advertising to attract prospects in July and during the first two weeks of Au gust when many people are on vacation. On the other hand, the last two weeks of August and the first part of September are typically good periods for attracting prospects, especially those anxious to register their children for the fall term in a nearby school.
• Grand opening ads. These are exceptions to my rule that the smaller the apartment ad the better. You may want to use a large display or display classified ad for a series of weekends to make your presence known. People expect a large ad in connection with a grand open ing, but if the large ad continues to appear long after the grand opening is over, the ad will become stale and lose effectiveness, or the public may lose interest and avoid you.
• Pre-leasing. These ads try to attract prospects for apartments that are not yet available. You are advised against using them. When you bring in prospects, you need apartments to show; without apartments, you are wasting advertising money. Rely on drive-by traffic for any pre-leasing business you hope to do.
• Shock advertising. In difficult markets, especially those in which a large number of ads for competing developments crowd the rental section of the popular newspaper, you may be tempted to try shock advertising. This can involve humor, irreverence, a dramatic give away, or a next-to-nothing move-in package. The point is to capture the prospect’s attention and gain a telephone call or visit. The technique often results in increased prospect traffic, and many people seem to enjoy a little humor in the usually humorless classifieds. However, on average, the prospect attracted by such an advertisement tends to be a less-desirable resident who doesn’t stay for long.
• The best ad. An unusual but effective ad might contain the following message: “Thank you for your tremendous response. We’re all filled up. If you want to get on our waiting list, stop by and leave your name.” Such an ad often produces considerable traffic. People want what they can’t have, and they’ll come to see why your apartments are so popular.
Radio rates are low—much lower than people think. Many FM radio stations offer rates even lower than AM stations. Radio is also one of the most effective traffic builders. There have been cases in which weekend rental traffic built up tremendously minutes after a message was broadcast. Why? Because many radio listeners are in their cars when they hear something interesting, and they respond to it immediately.
While radio creates a lot of traffic, this traffic seldom rents apartments. It consists mainly of curiosity-seekers who want to know what’s going on and are interested in any premium being offered. Certainly, teenagers who are drawn by radio messages aren’t prime rental prospects.
In one situation I know of, mature renters were attracted by ads run on a popular radio station with a country and western format. Another winning approach is regular sponsorship of a half-hour program of music in the early evening. The program might present “beautiful” or “easy- listening” music, or you might choose a classical format. Base your choice on the musical preferences of your target market. While it is difficult to track the number of rentals from this kind of advertising, it undoubtedly improves the property image as well as its rentals—particularly in high-rent apartments.
Radio can be especially effective in connection with grand openings.
The heavy traffic built up by radio can help convey a feeling of success. A profusion of activity may convince serious prospects that they should rent before all the apartments are taken.
If you decide to use radio, it’s a good idea to buy broadcast time in such a way that your spot is aired with increasing frequency from Thursday to Saturday and then stops mid-afternoon on Sunday. Pay particular attention when buying radio time. Many stations have restrictions on when you can buy time. Some popular programs are filled up, with no time available. You may have to buy a package of undesirable time periods in order to get the time you want. Sometimes, the station will schedule your commercials at its convenience. Be aware of these possibilities and take them into account when planning your campaign.
Fig. 8-200: Display Classified Ad -- This type of ad is a hybrid of both classified and display ads. It appears in the classified section of the newspaper. Normally, an ad of this type and size is too expensive for weekly use and should be reserved for grand openings or other institutional advertising programs. A smaller classified ad will generally bring out more prospects than the larger, more expensive display classified ad. Use the latter sparingly.
Television is a great selling medium—but expensive. Commercials for apartment developments are almost always institutional advertising. Only rarely are they intended to promote the leasing of individual apartments. In most metropolitan areas, the cost of television advertising is prohibitive; the only exception would be the promotion of luxury properties that have large advertising budgets. In smaller cities and towns, television advertising is somewhat more reasonable. Remember, in addition to the cost of broadcast time, there are production expenses. Making a good television commercial costs a lot of money, and it must be done with great care to show your property to its best advantage. One way to cut costs is to make commercials using videotape rather than film. In fact, most TV stations will offer to do this for you. Another way to cut costs is to advertise on UHF stations or cable stations that have lower rates and smaller audiences than VHF stations.
Be wary of certain television traps. One is the low rate for late-night shows and for Friday and Saturday nights. The reason that rates are low during these times is that the audience is small, and chances are your prospect market isn’t watching.
A second trap is a series of real estate commercials run during the same program. You want to be the only real estate advertiser; you don’t want to compete with two or three other developments.
A third pitfall is the tendency to purchase advertising time during your favorite shows and on your favorite stations, without regard for the target market. Don’t let personal viewing or listening preferences dictate your television or radio advertising strategy.
Local public broadcasting TV stations may offer promotional opportunities that don’t require cash outlays. One such opportunity is a charity benefit auction. Local merchants are asked to contribute goods and ser vices that are then auctioned to viewers. If you participate, the station will generally prepare a commercial to promote your complex. This commercial could be run several times each day during the telecast auction in re turn for your donation of, say, one year of free rent on a one-bedroom apartment. This can present an opportunity for tremendous television exposure and may also include the production of a taped commercial—all achieved while benefiting a worthwhile charity.
In any case, if you do want to use television, be sure to get competent advice from an advertising agency or other communications professional before making any plans.
Magazine and Program Advertising
Included here are regional and city editions of national publications such as Time and Newsweek; magazines put out for specific cities by local publishers; and programs for concerts, operas, and plays.
In most cases, these media are restricted to major cities, and in all cases are very expensive and effective only for institutional advertising. You are borrowing the prestige of the publication and associating it with your development. The effect is one of long-term image-building, but expect little immediate response. For this kind of advertising to be productive it must be done on a sustained basis. Again, such advertising probably is most beneficial to luxury apartments.
This is one of the most effective—and most expensive—forms of advertising. Many people are surprised at this, especially when they think of the amount of “junk mail” they receive. But postage is expensive, whether it’s first class or third class. Add to this the cost of paper, envelopes, printing, addressing, and handling, and the cost per person reached is far higher than any other kind of advertising.
The advantage of direct mail is its extreme selectivity: It enables you to reach only the people you want to reach. Newspapers, magazines, radio, television, and billboards all present your message to thousands of people, many of whom have no interest whatever in your development. Direct mail advertising can target your audience.
A direct mail campaign for an apartment complex should consist of mailing between 300 and 500 letters per week. This is an adequate number on which to base an evaluation. Fewer than 300 people is too small an evaluation base and even a successful mailing may reach too few prospects. More than 500 risks wasting advertising money if the mailing is unsuccessful; and you may get too much of a response if it does the job. The 300 to 500 range is a safe middle ground.
Offering an incentive such as a house plant, T-Shirt or pair of sun glasses will increase the response to your direct mail campaign. You will need to experiment with such offers to determine whether the added cost is justified by the addition of qualified prospect traffic, and more importantly, by extra rentals. A word of caution: Avoid offers that will detract from the quality image of your development. Remember, your product is very different from many others regularly promoted with direct mail incentives. People are not going to move their families in order to qualify for free pots and pans or even a microwave oven. Today, you can purchase mailing lists from a wide variety of sources including demographic specialists. You can reach just about any audience profile. You can dictate the addressees by zip code, occupation, salary, etc. These lists are rather ex pensive for the first mailing, but you typically receive a considerable discount when you purchase two sets of the same mailing list.
Do your mailing on a Tuesday for arrival Thursday and definitely no later than Friday. This gives a prospect plenty of time to plan for a visit on the weekend. It’s basically a waste if a letter inviting the recipient to visit an apartment complex arrives on a Monday. The invitation is usually for gotten by the weekend.
A well-planned direct mail campaign should attract a 4 percent response; that is, if you mail to 500 names, 20 prospects should visit. If you score 4 percent or better, mail the same letter to the same list the following week. Most likely, there will be the same response on the second weekend. This is because the second group originally intended to come out the first weekend hut for some reason postponed it.
If the response is less than 4 percent, consider other approaches. You may want to switch to another list of names or change the approach of your letter. Remember the effect of weather on your weekend traffic, and take this into account when judging the response level.
There’s no magic formula for successful direct mail. You’ll have to work out your own, but by sticking to the 300 to 500 sample, keeping the letter simple, and experimenting with different approaches, you will find a workable formula.
Yellow Page (Classified Telephone Directory) Advertising
People normally don’t look in the yellow pages for unfurnished apartments. The most desirable residents are the least likely to consult the yellow pages. A possible exception is if a number of your units have been prepared as corporate apartments. Housing directors, business people, and students who plan rather lengthy stays often use the yellow pages to search for furnished apartments. A small ad may attract a number of excel lent short-term residents.
For most situations, the value of a yellow pages ad becomes questionable—especially in light of the high cost of a display ad. In large cities, the proliferation of different and competing yellow page publications has generally frustrated the consumer, reducing the value of this advertising medium.
A simple listing of the apartment development’s name in bold-face type is adequate. It may be a good idea to include an emergency telephone number for the benefit of residents who may use the yellow pages instead of the regular telephone directory. You may also want to include your rental information center hours.
Many communities have apartment guides, often published quarterly or semiannually, that contain display ads for different apartment developments. These guides are distributed free or for a nominal charge at high- traffic points (e.g., shopping centers, airports, train stations, convenience stores, drug stores). In some communities, these guides are very effective; in others they are not. The people who read them are nearly always in the market.
Experience will have to prove whether the apartment guide in your area is a useful tool. If it is, arrange to advertise in it. The cost is usually a fraction of the cost of a newspaper ad, and the guide may be usable for a month, a quarter, and possibly as long as half a year.
Handbills and Flyers
Throwaway literature is not recommended except for grand-openings and special promotions. Handbills and flyers tend to lower the image of your property when used on a sustained basis.
Desktop publishing programs have made it possible to produce a professional-quality newsletter for apartment communities—even for rather small ones. The trick is to resist the temptation of letting the piece read as if it were titled The Landlord Speaks.” Don’t use it as an announcement vehicle for your new rules and regulations. Activities, gatherings, civic events, menus, resident profiles, or even short stories are fine. Stay away from manager talk. If you violate this principle, you may very well prompt a resident group to use the same new software to produce a newsletter for airing their grievances.
Prospects often look at newsletters as sales literature that is more institutional and less commercial than brochures. A newsletter tends to create the impression of a viable community, which may be an important point to make. Also, a newsletter format permits periodic updating to reflect the current status of the development. If the development’s rental program runs long enough, successive editions of the newsletter can re port on construction progress, renters moving in, opening of amenities, the relationship of the development to the surrounding community, and so on. Additionally, a newsletter can be used for follow-up mailings to prospects who have paid you a visit.
Some important advice: If you choose to publish a newsletter, do it well and make sure it reflects your unified graphics system.
Billboards can carry an institutional message as part of an overall campaign. More commonly they are used as directional signage near highly traveled roads as explained earlier. A billboard’s primary value is to direct people who already are heading your way.
Be aware of the limitations of billboard advertising. If a salesperson claims that 10,000 people see the sign every day, it’s likely the same 10,000 who are on their way to and from work. A billboard loses its impact almost as soon as it is displayed because people get used to it. Also, the sign needs lighting at night in order to get full value from it. You may have to accept a package of billboard placements on a rotating basis, which can mean poor locations as well as good ones. Finally, billboard advertising is expensive. The number of billboards is being reduced because of pressures exerted by environmental protectionists, and this has increased rates for the remaining billboards.
All of this suggests that billboards have limited value for apartment renting. What is a powerful vehicle for selling soft drinks is not necessarily right for marketing apartments.
When renting becomes difficult, apartment owners and managers always seem to come up with the idea of putting a banner on one or more buildings to attract the attention of potential renters. “Now Renting,” “One Month Free,” and “Win A Trip” are common messages. The community next door, not to he outdone, soon hangs their banner with an even more urgent slogan. Business rarely increases, at least in terms of the quality of the applicants; but a signal is sent to all renters announcing the fact that deal time is here. Your existing residents may begin to wonder if they can achieve a better housing deal by moving. Even if they don’t move, they will demand more from you since they feel that new residents are receiving special benefits. Many of your very best residents will be embarrassed by these banners and their special offers. They certainly will be upset with the lower-quality neighbors who are attracted by this form of last-ditch advertising. The biggest and best “banner” should he the property itself. Put your effort into making the property look better and you’ll stand out among the rest.
Fig. 8-208: Promotional Billboards -- Not intended to direct or to inform, promotional billboards help reinforce awareness and identity. They must be large, properly placed, and contain few enough words to be read and understood quickly. The use of reverse-color combinations, as shown on the lower sign, will attract more attention from a greater distance. Remember to keep the message short.
One of the most desperate marketing strategies is to hire someone to dress up in a trendy or eye-catching costume and direct prospect traffic to your complex. People have used clowns, giant rabbits, and even an imitation Pope. Common sense should tell most apartment operators that very few prospective renters will be encouraged to visit a property and possibly lease an apartment just because a clown standing in the street suggested they do so. These attempts are usually made by operators who simply do not understand the sensitive nature of the housing business. Be cause property managers deal with one of the most personal of commodities, marketing techniques must he chosen carefully. Using human directionals insults virtually all housing customers.
Like billboards, transit ads are generally read by the same people all the time. Many of the people who use public transportation are not in the market for apartments in your development, especially if it is a suburban gar den complex. Transit ads on the outside of buses get dirty quickly and reflect poorly on the development’s image. The person stuck in a traffic jam behind a bus spewing exhaust fumes is not likely to react favorably to your ad. Also, you may not be able to get the routes you want for the best advertising exposure. For all of these reasons, transit advertising is not recommended for renting apartments.
These displays reach one of the most active and affluent segments of the housing market, including executives being transferred. In large metropolitan airports, the cost of this advertising is prohibitive. In smaller cities, airport displays, including kiosks in airport lobbies, are reasonable in cost and effective as part of a major advertising program.
Advertising on benches at bus stops and elsewhere only reminds the public of your existence. An apartment ad on a bench at a key corner close to your development can help draw traffic. If you can afford to erect a bench and bus-stop shelter with architecture and landscaping that matches the character of your development, so much the better. Remember, bench advertising can be damaging when the inferior condition of the bench or its surroundings reduces the development’s status.
Included here are skywriting, sponsorship of baseball and bowling teams, sponsoring a float in a parade, and similar practices. Their value is limited—it’s strictly institutional. Don’t expect prospects to come running out to rent an apartment just because they saw your apartment development’s name on a float in a parade.
Other strategies and techniques can be used to draw traffic and prospects; these things can work well alone or as part of an advertising program.
• Premiums. You may consider offering a premium in newspaper advertising or direct mail to get people to visit your development. Premiums have been used successfully by savings and loan associations, banks, gasoline stations, and appliance dealers to attract customers.
However, no one will move for the sake of a premium. All premiums will do is help increase traffic. If that’s your goal, fine.
Don’t use premiums as an enticement for people to sign a lease application. Nothing will be an inducement if the apartment doesn’t fit their needs. If they do sign, they probably would have signed without the premium incentive.
• Giveaways. Included here are buttons, balloons, and T-shirts. While premiums are relatively high-quality gifts, these are harmless attention-getters. People accept them as token gestures; but if done excessively, such commercialism can damage your image.
• Celebrity appearances. These are successful traffic builders for grand openings. They also maybe good if the celebrity lives in the building and is willing to appear for the benefit of the 9ther residents. Other wise, a constant stream of celebrity appearances gives your building a Las Vegas atmosphere, which many prospects and residents won’t like.
• Charitable and public service activities. If your development is conveniently located, you may be asked to make it accessible for various public service activities. The local public health service may ask if it can set up a trailer to conduct blood pressure or cholesterol tests on your premises, or the Red Cross chapter may need a room to hold a blood donor drive, either of which would draw outsiders as well. Perhaps your development might be considered a donation spot during an annual drive to collect Christmas toys for underprivileged children or the starting point for a charity run or bicycle ride.
All of these are legitimate activities to stimulate public awareness of your property and increase the number of visitors. It maybe difficult to attribute rentals to such activities, but if they don’t cost an thing and don’t downgrade your image, go ahead and permit them.
One thing to be very cautious of is any activity that draws large crowds of people (e.g., a rock concert). This will drive away prospects, irritate residents, and probably do physical damage to your property.
• Trips and contests. Here’s the basic rental strategy: The greater the prospect traffic, the greater the number of renters. It would appear that in weak market situations, whatever it takes to increase traffic is acceptable. Offering a wonderful trip as a renting inducement would appear to be an effective way to attract additional renters. You will probably get a discount on these trips because of a special arrangement for volume, but, they are expensive. The money used for a trip could certainly be better spent by improving the property as a whole or the individual apartment units. Doing this will avoid the negative feelings harbored by existing residents who have seen the advertisement offering new, untried residents a vacation. I have also seen these programs backfire when the travel arrangements go sour or the trips do not include all that was implied. There have been cases in which resident organizations were formed by groups of residents who first became acquainted during a less-than-perfect trip.
Running a contest for a nice prize is a less-expensive approach, but it has little influence on rental results. The prize might be a year’s free rent, a luxury trip, or a new automobile. Unfortunately, contests rarely produce any measurable increase in prospect traffic or rentals. After all, many states offer the chance to win a million or more dollars with the purchase of a one-dollar lottery ticket. These contests are public and highly regulated. Why would someone wish to participate in your contest?
Finding Prospects: Other Sources
Besides drive-by traffic and advertising, there are several other sources for prospects.
Apartment Locator Services. Firms have been established in many communities to assist prospects who are searching for apartments. These firms are usually grouped separately in the yellow pages or in the classified section of the newspaper and they are commonly called apartment locators or apartment finders. Apartment locators offer their services to the prospect by providing a central source for rental listings. The fee, however, is paid by the owner of the apartment complex that gains the Prospect as a resident (and the fee is typically a percentage of the first month’s rent). In a way, this is very similar to a home sale in which the real estate broker appears to be helping the buyer, but is in fact the agent of the seller. Apartment locator services are not offered in every community and the quality of these firms varies. The fact that service availability differs from one community to another is obvious to me when I teach property management courses and some of my students are unfamiliar with these services. I explain the value of apartment locator services as follows:
• Time saving. Blindly following apartment advertisements can waste a great deal of time. Ads typically reveal all of the benefits and none of the drawbacks of advertised apartments; advertising copy can be very deceiving. A quality locator service will take the time to learn each prospect’s criteria for an apartment and will qualify the customer according to price, location, unit availability, etc. Current in formation about those apartment complexes that meet the prospect’s requirements is shared to narrow the search and save the prospect time. Some locator services even have videos and exterior and interior color pictures on computer so that they can give the prospect a presentation of available units.
• Identifying special needs. A number of would-be renters have unusual requirements. Perhaps a prospect has a large dog and has been turned down again and again. Maybe the prospect has a very large family and is experiencing difficulty finding an affordable unit that has enough room. Possibly the prospect requires a short-term lease because he or she is building a house and construction has been delayed.
• Relocation assistance. Apartment locator services are most popular among prospects who are relocating from one place to another and have little knowledge of their new community. A locator is often in the best position to provide unbiased assistance in finding just the right accommodations. Corporations with transferees will commonly engage a locator service to help their employees find new living quarters.
When quality services are available, many managers of small apartments will depend on apartment locators to market their properties. Larger companies should use locator services only to supplement their own rental efforts. The trouble begins when the property manager becomes dependent on the locator service and exerts less effort to attract prospects.
Resident Referrals. Probably no one is a better prospect than the person who walks into the rental information center after being referred by one of your good residents. This prospect is probably the same caliber as the present resident. Moreover, the prospect usually has seen the resident’s apartment, likes the development, and is ready to rent. The resident has already done the job of informing and exciting the prospect. Such a prospect is much more desirable than one referred by a locator service or one who merely drives by.
To let residents know that you welcome and reward referrals, periodically send the residents a letter or flyer announcing this. To qualify, the resident must personally bring in and introduce the prospect, so there’s no question of whether a proper referral has been made. You don’t want a situation in which a prospect comes in alone and rents an apartment, and then later a resident claims to have referred that prospect. A personal introduction eliminates this possibility. When the prospect signs the lease, the resident who made the referral gets a bonus.
The bonus can take many different forms. The current trend is to make the reward a very nice improvement to the apartment—possibly a new appliance or a special decorator treatment. Townhouse developments sometimes offer to plant a fair-sized tree in the yard outside the referring person’s unit or to add some special landscaping as a reward. Many complexes offer the same reward to both the referring party and the new resident. This makes it much easier for a person to refer someone, knowing that both parties benefit.
It should be noted that when rewards are offered, particularly cash rewards, the greatest proliferation of renewal prospects will come from some of your least desirable residents. Hence, you may want to examine the present caliber of your residents. Assume you have just finished up grading your property and you want to attract a new and better grade of resident to replace some of the less-desirable current residents. You offer your existing residents a generous referral program—one month’s free rent. Your offer is really directed to the new residents who have been carefully screened. Unfortunately, top-quality residents are usually very slow to recommend their friends, particularly when they are being paid to do so. The less-desirable residents do not seem to be guided by this principle, and you soon begin to receive a stream of referrals of similar caliber. Your development, hanging at a balance point, begins to shift toward the less-desirable resident, and the investment starts to slip backward. This problem only seems to occur when the referral prize is cash or a cash equivalent. The solution: Make the reward an improvement to the apartment.
Be aware that some states have regulations that may limit the use of resident referrals. The restrictions may relate directly to state licensing requirements and can prohibit the distribution of cash awards for referrals.
Housing Directors. Included here are housing directors and personnel managers of nearby corporations, hospitals, military bases, and colleges who seek housing for people transferring into the area. Contacts with these people usually are dominated by full-service real estate firms that offer a variety of services, including home sales and mortgage financing in addition to apartments to rent.
If the location of your development is within easy driving distance of a major employer, it certainly would pay to call upon the housing or personnel director and establish a relationship. Your cause will be dramatically improved if you can point to some of their employees who are currently your residents. Don’t expect instant results. You should plan to make regular calls, say every two months, to drop off literature and renew acquai1 Be sure to inquire about affiliate companies as well as firms that supply or support them. The personnel director will often have advance word of relocations, expansions, or special assignments involving other firms that provide associated services.
You might consider establishing a “preferred employer program” in which you offer special benefits to the employees of select companies. Typically, these include: no security deposit (or a greatly reduced security deposit), discounts up to 10 percent, and the right to cancel without penalty in the event of a company transfer. If you decide to initiate such a pro gram, seek the cooperation of the personnel department to help you pro mote the plan. It will be your job to prepare the printed materials and posters, but you will need the company’s help in distributing these materials. If you choose to go this route, it is really important that you make a full promotional effort. If you don’t, you may find that you have returned security deposits and lowered rents of existing residents who are employed by that firm, without gaining any new ones.
Waiting List. Unless an apartment becomes available within a day or two after a prospect signs a waiting list, fewer than 1 percent of the names on such a list ever remain likely prospects. They’ll look elsewhere. The primary advantage in maintaining a waiting list is to add to status appeal. People want what is in demand and hard to get. Word of this will get around, and this will increase interest and traffic.
Follow-up List. This is a list of people who say they’ll be back, but never show. The chances of converting these people to renters is very slim. Once they’ve left your rental information center, they lose interest. If you couldn’t reach an agreement with them while they were on the premises, it will be difficult to rekindle their interest over the telephone. A good many will resent your call. Out of the one hundred prospects you call, twenty may agree to visit again, twelve may actually appear, and three or four may sign. During periods of slow traffic, however, it may be worth while to spend time on follow-up to gain this additional traffic and the added rental results.
Rent-up Specialists. In many markets there are firms that will take over the leasing function for your property. Usually they arrive with a team of well-trained leasing specialists who know the techniques of renting and, in particular, the art of asking for a commitment. The fee typically covers their out-of-pocket costs plus a commission for every rental they produce. Most firms will tolerate your existing staff, but they almost never share customers or their knowledge of renting techniques. These firms and their staffs must produce or they won’t he in business long. Most representatives of these firms are much more effective than the typical rental agent because they have had better training and they are closely supervised.
Employing such a firm might sound like just the ticket. You can hire one of these leasing specialists, fill your property quickly, terminate the relationship, and handle the slower-paced renewals with your own staff. There are, however, some drawbacks to be considered. The cost of this service is high. Often in very soft markets the rental progress is not much better than what you were accomplishing on your own. Also, when you utilize outsiders you are not developing an experienced staff of your own. The most damaging side effect, however, is the high turnover rate of the residents attracted in one of these rental campaigns. I’ve seen countless examples in which more than 80 percent of the residents who rented under these programs were no longer living in the same apartment after a period of one year. The leasing specialists counter with the argument that they were successful in attracting renters and if there is any blame for an undue rate of move-outs it should be directed at the quality of management. Whatever the cause, apartments lease faster with leasing specialists, but the turnover rate increases as well.
When applied to a merchandising campaign, public relations (PR) refers to publicity used to call attention to a development, establish its image and theme, and keep it in the news. Public relations is much more than merchandising. It includes policy-making, product design, personal relations with prospects and residents, complaint handling, and community relations. It involves finding opportunities for you and your property to make a good impression; it is positive image-building. Because our focus is on merchandising the product and attracting prospects, we’ll look only at the merchandising role of public relations.
The power of public relations is in its believability. People often believe what they read in the newspaper or hear from a friend, but claims made in an ad are regarded with some skepticism. For public relations to have this believability, it must be divorced from advertising. If people know that a newspaper regularly trades off editorial space in exchange for advertising, they view the publicity as advertising and discount it accordingly.
To a great extent, the success of a PR program for an apartment development depends on the manager’s ability to produce stories and photo opportunities for local newspapers, as well as radio and television stations. This is no job for an amateur. Just as property managers shouldn’t design a development’s symbol and graphics (unless they are professional designers), they shouldn’t dabble in PR either (unless they are PR professionals). To be effective you should have the best talent available.
Public relations and publicity campaigns aren’t free. True, newspapers don’t charge you when they mention your development in an article, hut someone must be paid to create the publicity that led to your inclusion in that article. If you try to save money in this area, you’ll wind up getting few or no results.
Once the right PR talent has been hired, make it clear that you want publicity to build traffic, not to tickle someone’s ego. You want publicity that focuses on the development and its features and appears in news papers where the public can see it. Ego-building publicity focuses on the developer, manager, and owner and is restricted to real estate news corners or trade publications that the general public doesn’t even read.
Beyond local publicity, a PR counselor may be able to interest a national magazine in doing a story about your development. While these magazines reach a far larger audience than the target market, the prestige will boost the image of the apartment development. In addition, reprints of national magazine stories can be distributed as information pieces in the rental information center and included in direct mail campaigns.
CONVERTING PROSPECTS TO RESIDENTS
During this discussion of marketing, I have spent considerable time dealing with areas that do not involve direct contact with the customer. The reason for this is that the final stage of marketing, actual contact with prospects, will undoubtedly he the least controllable part of the rental effort. It is to be hoped that the product and atmosphere that have been created will “carry the day.” The reason for this is simple. Preparing the product is the culmination of months and often years of planning, thought, and revisions by highly trained experts. Choosing and decorating models, creating ads, outfitting rental centers, and preparing colorful collateral materials, are also the product of specialists working at a measured pace with a care fully planned goal in mind. When the customer finally appears, either by telephone or in person, the controllable portion of the marketing program decreases. The apartment manager must now have impromptu interaction with the real star, the customer.
Customers come in about every size, shape, mood, and background. They’re driven by endless wants, needs, limitations, and abilities. The property’s staff must match each customer’s needs to the rental community using knowledge of the area, the product, alternate choices, and basic selling techniques. That’s tough. An advantage does exist, however. When you hear from a potential renter, that person has indicated a possible de sire for a change in his or her housing arrangements. At least there has been some “sorting” done. Imagine how much more difficult apartment marketing would be if it was necessary to start from scratch as is often the case with people who sell encyclopedias or life insurance. They must search out an audience, plant the idea of need for their product, and then proceed to fill the need with their particular product. On the other hand, we in the apartment management business deal with a product of necessity, housing—and more often than not, our customers come to us.
The apartment-hunting process is time consuming because of the distances between rental communities and the number of options that are usually available to a prospective renter. The telephone is often used to save time during the initial scouting efforts. The prospect has usually established a set of criteria that arises from his or her particular situation. This list includes requirements as well as desires and frequently reflects a “stretch” in actual needs. This is no different from the way people shop for automobiles. The car-shopping process starts with gathering information about the latest features; it includes a plan to avoid the problems inherent in inexpensive models, and extends to ultimate resale values. After a period of some investigation, a decision will be made, but the criteria and expectations will probably he compromised. The brutal reality of affordability will eventually play its role in the decision. Similarly, the point at which the rental prospect’s call is fielded will determine the degree of compromise in his or her original wants and needs. For example, if this is the caller’s first weekend or two in the rental market, he or she will stick pretty close to the mental or written criteria list. After all, his or her demands are justified and buoyed by all of the specials detailed in the classified ads. It will be some time before the customer actually gets a handle on the market and begins to sort out priorities.
Recognizing this, leasing agents must adjust their approach accordingly and try not to become depressed when a caller hangs up or demands apartment packages that are unrealistic. Chances are that the prospect has not left his or her living room and the realities of the market are yet to be learned. It’s tempting to start selling the product during those exploratory phone calls. While that will certainly make the leasing agent feel better, it will not do very much to help the rental effort. The telephone is a valuable tool, but its primary advantage is the help it provides in securing appointments.
The Telephone Inquiry
When the telephone rings and it’s a rental prospect, understand that the prospect wants to shorten the shopping time by garnering as much information as possible about the property. The prospect will want an ample apartment with a long list of amenities, all at a very special price. The staff member on the phone wants to make an appointment for the prospect to come and see the value package offered by the rental community. To do this, it is necessary to engage in a conversation that answers some, but not all, of the prospect’s questions while at the same time probing for the answers to certain critical questions to help in qualifying the prospect. The following topics represent the information that the leasing agent should get from the prospect (though not necessarily in the order stated) as well as the appropriate follow-up activities.
• Introduction. When taking calls, the leasing agent should ask for the prospect’s name, and he or she should he given the agent’s name. The prospect might be hesitant about giving his or her name or, more importantly, telephone number or address, until he or she can determine a certain level of interest. One shouldn’t dwell on the caller’s identification and present whereabouts at the point that the exchange of names takes place.
• Requirements and needs. At this point, the question to be asked is, “How might I help you find your next home?” Remember, the response the prospect provides will rarely describe what the prospect will actually accept, so the property should not he disqualified just because there isn’t an exact “fit.” Rather than allowing the prospect to ask all of the questions, the leasing agent should begin an ex change that will reveal the caller’s requirements and needs. If the prospect is asking all the questions, the leasing agent should first answer that inquiry and follow up with a series of his or her own questions to begin the qualifying process.
• Timing and situation. The rental agent can often break up a prospect’s recitation of needs by asking about the prospect’s intended moving date or interjecting a question about what prompted the need for ‘a move. The answers to these questions will usually be honest and will help to ‘flesh out” a profile of this particular prospect. This information will become very valuable as the rental process advances.
• Budget. The leasing agent should ask the caller for an acceptable rental range, knowing that the estimate will probably he conservative. Prospects do not want to miss any bargains or specials, and they want to pressure the leasing person to come up with the very best deal. Actually, the prospect’s strategy is reasonable, and it is probably much the same approach you would take.
• How to contact the prospect. If there is even a semblance of a “fit,” the leasing agent should learn how to contact the caller. At first, it is important to establish a rapport and begin an exchange of information with the caller. If it appears that the leasing agent can help the caller find a new home in your property, the questions “Where can you be contacted during the day?” or, “Is it better to contact you during work hours or at home?” can be fit into the conversation. These inquiries might work better as part of the appointment process that follows. It is natural to ask for a phone number when people make appointments in case an emergency would force a postponement.
• The appointment. All that anyone can do on the telephone is “sell an appointment.” Renting an apartment simply cannot be done by phone. In order to get almost anything today, you must ask for it. This certainly includes getting rental prospects out to visit the property. Skilled rental agents often ask for an appointment using a com pound question: “Is one day of the week better than another and, is there a time of day that works better for you?” With the answer to one or both of these questions, the rental agent can suggest a specific time and day for an appointment. If the prospect avoids making a specific appointment, it’s a good idea to ask for a general appointment. In other words, get the caller to commit to coming out on a particular weekend or one evening during a given week. An effective way to get a commitment from a prospect is to promise to set aside the necessary time to familiarize him or her with the general rental market as well as all that your rental community has to offer. A willingness to share time and knowledge often produces a corresponding commitment.
• Directions to the property. After making an appointment, the leasing agent should confirm that the prospect knows how to get to the complex. The agent should ask where the prospect will be coming from and summarize the appropriate directions.
• Re-introduction. At the end of the call, the leasing agent should state his or her name again. Many callers will have forgotten the name of the person at the other end of the line, but will not admit to this memory lapse and ask for the name. Again, a rental prospect is much more likely to keep an appointment if he or she knows the agent’s name.
• Record information. Leasing personnel must develop the discipline to record the information gathered during a telephone inquiry. Maintain a set of cards, either blank or printed, on which to record the information derived from telephone inquiries. If the recording process begins while the prospect is on the telephone, the problems and delays associated with completing a registration card during the prospect’s visit won’t become an issue; the leasing agent can get right to the business of helping the prospect find a suitable home.
This brings up the issue of one of the disadvantages of paying leasing people a salary rather than a commission. Leasing people who are paid only if they play a role in producing renters will record and register everyone they meet. These people are simply not going to take the chance that a person with whom they have worked on the telephone might arrive at the office without knowing the leasing agent’s name. Leasing agents paid on a salary will often do a credit able job of “talking-in” a prospect, but will not record the information that was learned about the prospect during the telephone inquiry. This omission is worse than starting over. One of the forces that motivated the prospect’s arrival at the property had to do with a feeling or relationship that developed during the telephone conversation. If the leasing agent fails to record the information obtained during a telephone conversation with a prospect, the relationship is reset to zero when that customer walks through the door.
Preparing for the Visit
When the door opens and a rental prospect walks in, the “selling” job is almost half over. Why? Because his or her very presence indicates that a number of milestones have been reached. The neighborhood must be acceptable, or the prospect would not have visited. The prospect must find the property’s appearance and condition to be favorable, or he or she would be saving time by going elsewhere. Obviously, the prospect hasn’t heard anything negative about the reputation of the complex and its manager, or again, he or she would not have bothered to visit. What remains to be discovered by the prospect is the specific unit’s appearance, avail ability, price, the atmosphere of the community, and the leasing agent’s dedication to solving housing problems. Assuming you have done your homework in preparing the product and putting the available units into marketable condition, a great deal depends on the relationship between leasing agent and client.
Seller or Helper
After working with a great many leasing people, certain trends have be come evident to me. Those agents who consistently achieve the greatest results present themselves more as helpers than as sellers. Their approach is to find Out why the prospect wants a different place to live, identify any special needs and restrictions, and then make an effort to meet the established requirements.
Take a minute to think about the merchants you have dealt with who take the extra time and interest to see that you choose the right product, style, or size. In addition to assisting your initial purchase, these sales people sometimes go one step further by helping you select coordinating items or accessories. This has become so rare an event in today’s high-speed world, one is amazed and flattered by any interest or concern. Some novices may call this kind of approach high-pressure selling; hut if the customer doesn’t feel pressured, how can that he? A true salesperson who becomes involved in helping the customer satisfy a need or desire will always perform better than one who simply offers a product or service without putting forth any helpful sales effort.
It is not uncommon for top rental agents to suggest competing rental communities when the units in their complex do not match the prospect’s requirements. These agents don’t stop helping a client when the fit isn’t there; they get on the telephone and make some calls. The prospect’s knowledge of the neighborhood is no match for that of the professional leasing agent; the leasing person’s assistance can save this prospect many hours of fruitless apartment hunting. Taking the time to help a prospect locate housing that will satisfy his or her current needs will pay dividends in the future. First of all, the prospect will probably tell others about the way he or she was treated and helped. This may not he the last time that he or she will need housing; next time one of your units may fit the bill. Also, the competitors you call will be grateful for the referrals and that may earn you referrals in return. The goodwill generated from this action is immeasurable. I have seen leasing people disciplined and even dismissed because they sent prospects to competing developments. Their superiors just didn’t understand that when the apartment doesn’t “fit,” the agent’s relationship to the prospect will be destroyed if attempts are made to force the issue.
Knowing the Product
Leasing agents can’t be much help if they have limited knowledge of both the property they are renting and the neighborhood in which it is situated. It often appears that the more information that is given to the leasing agent at the time of initial employment, the less that person seems to learn about the property. When details are available in neat packages, information doesn’t always register in a person’s memory bank. The best results are usually obtained when rental agents are challenged to prepare their own data base about the property and neighborhood. Let that person measure and record room sizes, ceiling heights, square footage of cabinet space, and lineal footage of closets; assess the attributes and limitations of the various unit types; and judge which ones will rent most easily. Rental people must know the property from their own thorough study, not merely as a result of their many tours with rental prospects.
The same is true of knowing the neighborhood. The agent must actually ride the bus downtown and to the shopping areas. Agents should walk into the schools and inquire about the grade levels, school district boundaries, school bus routes, etc. They need to know about the businesses, churches, organizations, and local government. As we said at the beginning of this section, agents must also visit competitors. If they aren’t allowed time for this orientation, the rental results will be limited to what can be achieved by a desk-bound clerk.
Product and neighborhood information will be used throughout the presentation, much of which will take place during a tour of the property. The routes and the features to be included in a particular tour will vary with each customer, but the agent must plan for a number of combinations well in advance.
Ideally, the leasing agent hopes to have the opportunity to pause a moment with the prospect, become acquainted, and determine his or her needs. Unfortunately, many prospects are hurried at first because they want to assure themselves that there is a “possible fit” before taking the full tour and hearing the sales pitch. Prospects come to view apartment units, not recreational facilities and support amenities. It’s sometimes difficult to slow the process sufficiently to allow prospects to feel the sense of the community. Respect the prospect’s sense of urgency: The leasing agent cannot afford to waste time searching for keys or deciding what units are available. That work must take place daily, before the doors are opened for business.
There should be few surprises during the course of the prospect tours, and the surprises encountered should be truly beyond the realm of the leasing agent’s control. Each agent should make a habit of walking the grounds and following the various routes available for showing the property to a prospect. This includes recreational facilities, parking areas, laundry rooms, sidewalks, steps and landings, model units and, of course, the units that are for rent. Obviously, the apartments should be in market- ready condition. This bit of advice has that textbook sound. Few people will argue with the premise that a preliminary tour should be made each day; but almost no one puts this into practice.
Sometimes the available apartment is still occupied and this requires even more advance planning. Usually, the best plan is to meet with the current resident and explain the need for his or her cooperation when the apartment is shown to potential renters. A great many renters feel that this is an imposition and some may have to be reminded that the lease clearly provides for this situation. Residents would much prefer that you wait until after they have moved to begin your re-leasing process. More time should be taken to qualify prospects when the tout involves occupied units. With luck, a match will he found after just a few showings, and residents can be spared further intrusions. The more advance notice, the better the reception will be. Choose reasonable hours to call for permission to show an apartment, and do your best not to schedule showings during a child’s nap time or during meal times.
What happens in the case of an existing resident who is a poor house keeper, or one who has proved to be unsatisfactory—perhaps even subject to an eviction suit? You have to forget showing that apartment. If the housekeeping is terrible, it will surely offend a quality prospect. If there is even a hint of odor, do not show the apartment to a prospective renter. Wait, clean it thoroughly, air it Out, and allow time to eliminate the problem. Granted, taking an apartment out of the income stream is expensive; but it must be understood that quality residents simply will not choose an unpleasant apartment. When good prospects see a completely unacceptable unit, they are not likely to rent anything in the same development. If you are successful in leasing such an apartment before its problems are corrected, the chances are excellent that the incoming resident will present an even greater problem than the previous one.
If you have them, show model units first. This accomplishes two things. Prospects are anxious to find out what the units look like. Showing the models satisfies that need and gives the agent some time to promote the amenity package and get better acquainted with the prospect before deciding which available units should be shown. Usually, the choice should be limited to two units, so it is essential that the agent determine the prospect’s needs quickly. The agent shouldn’t be carrying a long list of avail able units or a handful of keys because this would indicate a number of vacant units. People want what is in demand; the leasing agent probably won’t improve the occupancy level with the prospect who learns that there is considerable inventory. Of the two apartments to be shown, the best should be saved for last; the first apartment is often a trial. The prospect’s reaction to it will signal what to show next. A third unit should be shown only when the agent learns of additional criteria during the first two showings. In most cases confusion will set in after two showings, making it difficult for the prospect to come to a decision. When prospects go away to think over different options, they rarely return. Also, revealing the availability of several units weakens your bargaining position and undermines the apartment’s appeal.
Showing an apartment demands a blend of enthusiasm, feature demonstration, and the ability to allow the prospect some freedom to look around. Virtually everyone can identify the primary rooms, so statements such as “this is the kitchen” either insult the prospect or guarantee that he or she won’t listen to additional comments. Prospective residents usually appreciate an agent who directs attention to energy-saving furnaces, insulated windows, frost-free refrigerators, or self-cleaning ovens. Reports about easy maintenance and creative room uses will also be appreciated. People aren’t interested in knowing the total area of an apartment, but room dimensions are always of interest. If a prospect begins to point out features on his or her own, the agent should take note and slow down the presentation. Prospects can sell themselves on apartments more effectively than a leasing agent could ever hope to. This frequently occurs when one person does the scouting and returns with the other decision maker in a semifinal round of looking. Listen carefully, and the prospects will identify their favorite features as well as their reservations.
If there is printed material available to hand out, brochure sets should be prepared in advance and be ready to hand to the customer. There are mixed feelings about the timing of handing out materials. Some agents want customers to have the material in hand, so they can refer to it or make notes about features, unit numbers, rent, etc. Others believe brochures distract the prospect and eliminate the reason to return to the rental center after viewing the units.
When customers walk in the door, you are going to need a method of recording their names and particulars. It’s standard to use a printed guest card with spaces for information about the prospect and his or her needs. You may also want to record how the prospect learned about the development (advertising, drive-by, direct mail campaign, etc.) because this enables you to track the success of your promotional efforts. You have to determine who completes these cards and when it should be done. In some cases the card is completed by the agent shortly after the initial introductions. The true pros never go through the formality of filling out the guest card, though they may jot down information as they talk. It is not uncommon for the agent to delay completing the card until the prospect leaves. This requires much more concentration on the part of the agent, but it makes the sales presentation smoother and eliminates the interruption of completing such a form.
Walking Through a Prospect Arrival
Now that we have addressed the different aspects of dealing with a prospect, let’s consider what happens when one walks through the door.
Presentation. The entry of the rental prospect triggers an opportunity to demonstrate your rental community. The leasing agent must be quick to act and ready to learn the answers to a number of very important questions.
Introductions. Unlike introductions over the telephone, the exchange of introductions during a visit to the rental center must be handled immediately and completely. The longer one delays getting the customer’s name, the more awkward it becomes, If the prospect’s name is difficult to say, or is not pronounced clearly, the leasing agent must take the time to learn the name and know its spelling. A person with a difficult name is no doubt accustomed to helping others learn his or her name and will take the necessary time to do so. While the importance of knowing and using a prospect’s name may seem too rudimentary in a discussion directed to ward professional leasing people, you should know that many surveys re veal that leasing agents do not learn the prospect’s name until after the application is completed. It is difficult to demonstrate a sincere interest in the prospect and his or her housing Situation on a nameless basis.
Ready or Looking? A question that must he asked very early in the presentation process is, “When are you planning to move?” or “How quickly do you want to relocate from your present address?” There are prospects who need housing within a matter of weeks, and then there are those who have many months to go on a lease. Everyone who has taken the time to walk through your door deserves courteous treatment. Knowing the approximate timetable benefits you as well as your prospects.
Early in the presentation, the leasing agent should ask the prospects if they are ready to make a commitment if the right apartment comes along. If the answer is “yes,” the leasing agent will know how to handle the response when he or she asks the prospects for the order—which in the rental apartment business is a deposit and a completed application. When the leasing agent asks for the order and the prospects resist, the agent al ready knows that the need exists; the problem is that the benefits demonstrated thus far have missed the mark in some way. On the other hand, if the answer to the question about commitment is “no” because the prospects won’t need an apartment until next spring, there is little reason to even ask for the order. In this case, the leasing agent should be helpful and polite, but the fact that a decision will not be made immediately makes the approach somewhat different.
Budget. The leasing agent should ask about the prospect’s price range in the first few moments of the presentation. If the answer is $450 and your units start at $600, that issue should be dealt with immediately. The longer the matter of price is delayed, the more difficult it is for the prospect to admit that an apartment is beyond his or her means. People recognize that the leasing agent’s time is valuable and that he or she is putting forth a lot of effort to help them find suitable housing. If the presentation proceeds too far, prospects who simply cannot afford the product have a difficult time admitting they are not rental candidates. When the price issue is delayed too long, the prospect often listens to the whole presentation and begs off with a statement like: “I am very interested, but I just need some time to look at what other properties have to offer.” Too many of these responses, and the leasing agent’s confidence level begins to erode.
If the prospect’s budget falls within, say, 20 percent of your published rent, it usually pays for the leasing agent to continue with the full marketing effort, Most people are conservative when announcing their budget limitations and the leasing agent may be able to help with a little creative structuring. When prospects can’t afford your apartments, the leasing agent should steer them to neighboring complexes that are within their means. As I said earlier, a leasing agent should do more than steer—he or she should ask the customers for permission to make some calls to help them find quality rental housing at a price they can afford. This will take some tact, because today people are very sensitive about their inability to afford something other people consider basic.
Motivating Force. Moving is expensive, time-consuming, tiring, and unpleasant. So, when someone arrives at your door looking for an apartment, you can believe that there is an important force at work. It is critical that the leasing agent know and understand the reasons for the move and the major benefits being sought. It is not enough to know that the customer wants or needs a change in living quarters. In workshops with experienced leasing agents, I have counted more than 200 possible reasons for moving. The sales approach one takes with a prospect who is about to be married is very different from the method employed when a person is beginning divorce proceedings. A couple hoping for a home of their own some day won’t have the same “hot buttons” as a retired couple who just sold their large house. The leasing agent’s job is to demonstrate the benefits of an apartment. Knowing the motivating force behind a move enables the agent to emphasize those benefits that should be of interest to the customer.
Urgency. The leasing agent’s approach must have a sense of urgency. A change in housing is a big—sometimes painful—decision, one that can be easily postponed if there aren’t sufficient reasons or benefits to justify the move. When there is just one available apartment, the level of urgency is obvious and can be very effective. When there is a “desperation banner” hanging on the side of the building and the newspapers are loaded with ads offering every possible incentive, it is far more difficult to convey such a sense of urgency. In fact, this is one of the primary reasons I recommend spending money to give each of your apartments its own personality. Then, even though there are other apartments available, the apartment being shown is special.
Surprise. As the relationship between the leasing agent and the customer develops, the agent should be thinking about announcing some kind of personalized “surprise.” For example, let’s say that the prospect has indicated that he or she hates to waste anything, especially money. A skilled agent may respond by explaining the benefits of the energy-efficient heating plant. Later in the presentation, the agent might add the surprise of an unusually high “R” rating (a measure of heat loss) of wall and ceiling insulation. Maybe the agent surprises the customer by offering to provide some wallpaper or allow the prospect to move in a few days early. There are dozens of possible surprises. These should be planned in advance and introduced at the moment the prospect is deciding whether to sign or keep looking.
Questions and Objections. If a prospect begins asking questions and raising objections, this is a positive sign. Questions and objections are often used as a ploy to avoid making a decision. They signal that the prospect wants to say “yes” but can’t quite make a decision. Most people display hesitancy when faced with major decisions such as choosing housing, automobiles, and expensive clothing. Most rental agents misinterpret objections as negative reactions. This is not usually the case. An uninterested prospect simply listens to your presentation without comments, objections, or interruptions. When prospects take the time to spell out objections, they are interested but they need help.
Most rental agents can recite all their competitor’s special features and all the negative aspects of their own property. This results from absorbing prospect objections. Rental agents must learn the most fundamental principle of marketing: People need help in making decisions. When objections and questions are raised, the prospect is ready. Knowledge of the prospect, the neighborhood, and the competition will all come into play. The ability to overcome objections and to answer the prospect’s questions depends on product knowledge. The better prepared you are, the easier the task. Each case will be somewhat different, and experimentation is necessary. In time, experience will help point the way. Remember, all objections do not have to be overcome. Often prospects express objections to create a smoke screen that postpones decision-making.
Closing. The two most frequent reasons for a disappointing leasing performance are: the condition of the apartment being shown and the failure on the part of the leasing agent to ask for the order. I mentioned earlier that success in getting an appointment depends on a willingness to ask for one. The same principle applies to the conclusion of the leasing agent’s presentation. A customer has walked in the door, driven by a need for a change in housing accommodations; the leasing agent acts as an assistant in solving the prospect’s housing problems. The leasing agent has qualified the prospect in terms of the immediacy of the prospect’s needs, bud get parameters, and the benefits to be gained by the move. Assuming our product is worthy of the prospect’s consideration, shouldn’t the leasing agent ask him or her to join the community? If the prospect is hesitant, is it because the agent has failed to answer a question or satisfy an objection? Will the prospect volunteer or identify the reason behind his or her reluctance, or must the agent initiate a probe? Unfortunately, many leasing people complete their tour of the models and an apartment or two and, if the customer doesn’t say “I’ll take it,” the presentation is over. This stems from a lack of training and the fear of rejection.
The best way to help a novice k agent is to have him or her go out and visit new housing developments to witness the selling pros at work. Have the leasing agent record the “close attempts” and the words and phrases that are used. Equipped with a dozen or so of these techniques, the agent should be able to convert what he or she has learned to the business of renting apartments.
There is a period of nervousness that affects most leasing people when asking for the order, hut it cannot he avoided if the person is to be successful. Sooner or later, the agent is going to strike the right relation ship with the prospect and summon the courage to ask for a deposit and commitment—and the customer’s answer is going to be, “yes.” The best time to make a deal is immediately after completing another—thus the pattern of success begins.
The main message here is that the leasing agent must ask for the order. The apartment unit will not “rent itself.”
Deposit. Making a commitment to rent and placing a deposit are closely related. If the customer says yes to the “close question,” but departs with out leaving a deposit, little has been accomplished. The amount of the deposit is not particularly important, although a substantial figure certainly demonstrates a strong degree of commitment. A chronic deficiency revealed in the results of many shopper surveys is the fact that the customer wasn’t asked for a deposit. That means that the prospect remains just that, a prospect. The prospect may come back and rent; or he or she might very well make one more stop and he “steered” to a better deal. When a person puts down a deposit, there is an element of closure or finality.
When it is difficult to get a commitment from a prospect because the rent is too high or the prospect wants a series of improvements, many experienced leasing agents will ask for a deposit and an application, making acceptance contingent upon the prospect getting his or her “deal.” This accomplishes some important things. First, the prospect goes home and discontinues apartment hunting for the moment. That means he or she is not going to be lost to a competing property—at least today. Also, if the prospect will entertain the idea of putting down a deposit, it indicates serious interest. If the prospect brings up objections, yet refuses to write a deposit check that is refundable if his or her terms aren’t met, the prospect may just be looking for a way to say goodbye. Finally, once a person has put down a deposit on an apartment or, for that matter, almost any other commodity, there is a sense of relief that comes with making a decision. The prospect begins to “live” the advantages and benefits of the new apartment even though it is necessary to wait for the acceptance of his or her terms. After a few days, a compromise between the offer on the table and a middle-ground counteroffer is much more likely to be achieved.
New Appointment. When it becomes obvious to a skilled leasing agent that the customers are not going to make an immediate decision, the agent should do his or her best to make another appointment for the prospects to come out again. The prospects might say that they want time to visit some other developments for comparison purposes or that they want a friend or relative to have a chance to see the unit. The agent should then try to fix a specific time or at least a day for the return visit.
Here are some suggestions for assessing your progress.
When times are tough and renting slows down, the standard industry cry is for more prospect traffic. If the number of people calling or walking through the door can he increased, it would appear that the odds of get ting more rentals must naturally improve. Remember, when the call for more traffic goes out, the “market winds are still” and that is the very reason for concern. It’s tempting to offer specials or free rent or to undertake a major promotional campaign. This approach has to produce more people on the phone and at your door or the program will be discontinued very quickly. The problem lies in the quality of the people who are attracted by such methods. These promotional efforts are acceptable in merchandising appliances, automobiles, and electronic gear, but they haven’t proved successful in directing a person to where he or she is going to live. When traffic slows, take stock of each point in the marketing program. A new sign message often helps. You can almost count on the fact that your advertising has become stale. Scrap what you have and work on a new approach. Don’t lose your image by adopting a shock approach or getting caught up in give-away mania. Most importantly, check the product. In the property management business, aging properties are said to “have whiskers.” Remember, most people who choose not to rent in your property believe that they can get more for their rent money somewhere else. That doesn’t mean that these prospects want lower rent; it says they believe that they can find a property that receives better care and maintenance for the same money. If you have money for trips, gifts, or free rent, try spending it to give the units special personalities. Finally, review the basics of renting. Did the leasing agent ask for an appointment? Did he or she know the motivating force behind the move? Can the agent list the benefits that each prospect is after? Did he or she attempt to close and ask for the order? In soft market periods, it may be very difficult to get more people through the door each week without a fire sale approach, but you can become much more effective with the traffic that you have. After all, if traffic is slow, you should have plenty of time to work on sales presentations.
Prospects Who Become Residents: Conversion Ratio
Many owners and some market analysts choose to dwell on the conversion ratio between the number of presentations that are made and the number of new residents gained. Over a long period of time such a ratio can prove beneficial in spotting a problem or sorting out ineffective leasing agents, but it should be used with caution. New properties have a much higher ratio of “lookers to renters.” It’s common to record as many as ten lookers for every deal made in a new, high-profile development. In a property that has stabilized, the conversion ratio will be something more like five or six prospects for each lease signed. The secret to interpreting these ratios lies in not advertising them. Some owners and supervisory managers announce their opinion of the proper conversion ratio. Then, when the leasing agents learn the magic number, they quickly adjust the weekly traffic figures to generate the desired ratio. Work with the conversion ratio, use it as a tool, but do not force it. If you are achieving a rental for every three or four people who walk through the door, study the competition and your rent levels—the chances are good that your rents are too low. If, on the other hand, you only rent a single apartment for every nine or ten showings, it is a pretty good bet that the property has some serious flaws. Either would indicate the need for some major changes.
Most rental agents dislike the use of shoppers. Let your rental agents know in advance that you plan to use shoppers to spot mistakes for the sake of correcting them, not to punish anyone.
As a matter of fact, it’s a smart idea to use shoppers even if rental agents are converting prospects to residents at a ratio of five- or six-to one. A shopper might discover that if the agents were doing everything they are supposed to do, they would be converting at an even better ratio. In that case, the rents may be too low and you can raise them safely. Have your development shopped two or three times a year, just to make sure agents are doing their best.
The shoppers might be young couples who look like prospects. If they have a baby or small child with them, so much the better. Have them dress casually and act like prospects; your shoppers should always match your resident profile. Also have two or three teams of shoppers who can visit the development on the same day but at different times. The reason for this is that it will help to substantiate the existence of selling patterns that need attention or correction. This will also help to counteract the denials that can be expected when a rental agent is confronted with a negative report. If the same report is made by more than one shopper, the agent has little argument.
The shopper should note the date and time of the visit, and the name of the rental agent. The shopper’s report should be a strict narrative with no subjective comments. You will be amazed at what the shopper’s report can reveal. Here are some actual examples. In one case, shoppers were denied their request for a tour of the models. In another case, a rental agent walked around without shoes; and in yet another, the rental information center was closed during the middle of the day.
Be sure to review the written report individually and privately with your rental agents so each understands what is being done—both correctly and incorrectly. Don’t let the agent adopt a defensive or negative posture. Explain what was wrong and point out the correct techniques.
After you are satisfied that the rental staff is doing a good job, have the staff set their own performance goals. Ask them how many apartments they would like to rent this month. Chances are the .staff will set a high goal, much higher than you’d set for them. Then ask them to say just how many they actually expect to rent. The new figure will be somewhat lower than what they would like to rent, because you are asking for a specific commitment. The staff will usually meet their own commitments. If they fall be low that figure, help them analyze their performance to find out why.
To improve the productivity of your rental staff, consider incentives other than money. Truly, money is one of the least powerful motivators when used as a bonus or extra inducement. Contests that involve the spirit of competition are much better to spur high achievement. By publishing results and awarding prizes, much can be done to improve performance. Remember, all people fear being last even more than they want to be first.
A Final Check
If, after doing all of the above, you’re still not happy with the traffic and conversion rate, check every link in the rental chain step-by-step— policies, rents, product preparation, merchandising, or even the product itself. If you find something that can he improved, change this item with out changing anything else. Then change other elements one at a time until the desired results are achieved. Remember, the weakest link is usually the rental staff. Product preparation is next in line. Concentrate on these two aspects, and most marketing problems will be solved.