Have Your Team Members Earned The Right To Wear This Badge?

When I first posed this question to myself I came up with a plethora of answers.  My prediction was cheap rent and great amenities would rank at the top of the expectations list.  These predictions were fueled by my knowledge of markets handing out concessions and developers putting in over-the-top amenity packages.  As I actually started my survey with residents, it became obvious that neither I nor the market had paid our Dionne Warwick Psychic Network dues, because our predictions were wrong.

During tours of A, B and C level assets I would meet prospective residents and existing residents and ask the question, "What are the three most important things you look for in an apartment community"?  While this informal survey was not based on thousands of residents, it was definitely based on more than a hundred.  Inevitably, no matter what the asset level, three answers always seemed to be at the top of the list:  1) safety, 2) cleanliness & 3) good customer service.

Having been subjected to the consistency of these answers, I could not help but draw the conclusion that these three items should become every owner and management team's guiding principles for running their business.  GIVE THE CUSTOMER WHAT THEY WANT!

While we cannot guarantee any one persons safety, we can certainly implement and maintain tools that assist in this endeavor.  I often tour assets with controlled access gates and magnetic sidewalk pedestrian gates.  It is not uncommon for these to not be in working order.  When staff is quizzed regarding their repair, it is typical to receive a response of, "The repair is not in the budget".  If we adopt safety as one of our guiding principles for our business, this is no longer optional.  It needs to be treated like a leaking roof that is damaging our asset until repaired.  These unrepaired items cause our residents and prospective residents to feel unsafe, therefore failing to meet their first expectation.  Many other variables can be managed to help our customers feel comfortable, such as;  burnt out exterior property lighting, broken down perimeter fencing, tall landscaping providing hiding spots, etc. 

Cleanliness can be one of the easiest guiding business principles to implement and maintain.  Initial investments may need to be made for such items as additional trash receptacles, power washers and grounds clean-up in order to meet this customer expectation.  The true challenge is motivating the management team to realize, this needs to be top priority.  Additionally, I find that management teams tend to ignore cleanliness related to seasonal amenities, such as swimming pools during off season.  Pool decks are still visible during tours and to the residents.  These areas need to be maintained daily and most importantly not become storage areas during the winter months.  One company I worked for went so far as to design small garbage bags displaying their logo and both maintenance and office employees looped them through their belts as part of their uniform program.  While on property they used the bags to pick up random trash.  They received great feedback from prospective residents and residents alike regarding this very visible effort to maintain the cleanliness of their communities.

Good customer service seems like such a basic and implied expectation, yet I totally relate to why this has made the top three on the importance list.  For years now I have witnessed customer service dwindle in every industry throughout our country.  I believe much of this is due to automation.  Our young people have not had the modeling of Tom, the customer service focused professional bank teller, due to ATM machines.  They have not had the customer service modeling of Esther the sweet grocery store clerk, due to self check-out.  They have not had the customer service focused attention of Francis the efficient smiling gas station attendant, due to self serve.  The list goes on forever.  Automation has made us a society of expediency.  This expediency has robbed us of the opportunity to develop a customer service focused relationship.  Instead it has sentenced us to a life with an auto responding voice messaging system.  It has replaced warm handshakes with pushing numbers on a phone key pad.  It has replaced once flexible decision making of humans, with rigid and limited phone options and responses.  It has made it nearly impossible to speak with an empathic person within the company, instead sending us to a third world customer service representatives that hides their disgust for our first world spoiled expectations as they deal with us.  None-the-less, we need to recommit ourselves with strong team dedication to provide consistent stellar customer service.

We need to think of this as an open book test.  There will be three questions and we have been provided with the three answers – safety, cleanliness and customer service.  As we take this test each day, it will require us to adjust budgets, realign focuses and train the young.  But, if we consistently use these three expectations as our guiding business principles, we will surely experience higher renewal rates and increased closing ratios – and that is the key to SUCCESS!

Is Your Corporate Cart Overloaded With Program Initatives?

The multi-family housing industry has become the perfect canvas for entrepreneurial vendors to paint on.  Once an industry technologically ignored by most program developers, it has now gained the magnetic focus of many.

New programs regarding advanced automated accounting, lead tracking, analytics, automated rent collection, automated leasing tools, social media management, video marketing, on-line learning, automated bill approval/pay systems, revenue management, lease expiration management, automated marketing updating, on-line resident screening, etc.  are now readily available in an infinite inventory.

These programs are endlessly presented to the top corporate decision makers and appear as new shiny toys  promising to increase revenue, decrease expenses and expedite management efforts.  And in fact, most could probably do just that.  Unfortunately, many companies are unable to prioritize their needs, understand the demands of implementation and follow through on utilizing the implemented tools effectively.  But, they continue to buy and implement new shiny toys, becoming hoarders of under utilized programs.

Much like the popular television reality TV show, "Buried Alive", industry leaders continue to buy.  The major difference is that the items purchased are typically stored at the property level.  Again, much like the television series, just as the family members dealing with their loved ones obsession for collecting grow frustrated, depressed and overwhelmed - so do our property level employees.

Learning new programs require a time investment.  This length of time is often dictated by the technological savvy of the property staff.  Additionally, one must typically calculate in both a financial and customer dedication loss due to errors made during the learning curve.  Most unfortunately we have to add in a decreased employee productivity factor.  Typically, learning the program falls on the shoulders of the community manager, causing them to take their eye off of the business at hand temporarily.  Once having mastered the program, they then have to take their eye off of the business at hand yet again, to teach their team members the program.  Once everyone has conquered the skill set and are functioning at optimum level (3 - 6 months), the next new shiny toy is announced.  And the frustrating game of chasing our implementation tail repeats.

As a trainer, I relate to the extremely justified levels of frustration and hopelessness that the property teams experience.  Without receiving additional help, adequate continued training/support or approval for overtime - these individuals are expected to maintain their productivity level while conquering this monumental often self educating implementation task.

At the corporate level, I am even more frustrated.  As I interview the initial decision makers, I often find that they are not consistently reviewing the reporting tools, and if they are, they are requesting the property level people to run/scan/email the reports to them.  ARE YOU KIDDING ME?  Do you have your assistant spoon feed you your damn coffee in the morning?  You wanted the technology, learn your log in, remember your password and retrieve your own reports!  The community people should not be distracted in their continued frustrated efforts to try to make you and your company successful while in a state of program implementation overload.

So, the questions is Cutting Edge or just Cutting?  Is your goal to pave the way for your competitors while cutting your staffs focus on the business at hand?   If it is cutting edge, it is not just the program you must invest in.  You must invest in substantial training and implementation man power in order to not distract your existing property management team's focus from the important business at hand.  And probably the hardest sacrifice, are you as a corporate executive ready to give up a huge chunk of time to be trained and consistently utilize the reporting tools that your investment provides?

My advice, stop the insanity of program hoarding, there will always be more shiny toys to look at tomorrow.  Take the time to identify the top two areas calling for improvement within your company.  Then start your research on programs that can help to improve those areas.  Make a commitment to your employees to implement no more than two programs a year.  And above all, do not make the implementation fall on the property based employees!  Invest in an implementation/training team.

Always keep your property team focused on the business at hand.  Remember, the reports you receive are a reflection of their focus.  Often, if the numbers are low, it is because we have distracted our teams focus.

As my mother always said, "The Fish Stinks From The Head Down"!

What's In A Greetiing? Everything!

Each day our office phones ring for a multitude of reasons.  Residents with service requests, prospective residents seeking rental information, corporate calling regarding reports and family wanting to know whats for dinner tonight.  All of these are extremely important people to us.  People to provide us with job security and people who we want to have job security for.  Yet, on a daily basis, we answer the phone as though it is a uneventful routine requirement.  It is uneventful, because we have allowed ourselves to forget our tone and energy will dictate how the conversation will continue.  That's right, if we pick up with low energy we will have a low energy conversation, if we pick up with a serious attitude the conversation will turn serious, if we pick up in a hurry the conversation will end quickly.  If our phone energy is negative we will contaminate the energy of the caller.  If we pick up with a positive high energy we will elevate the energy of the caller.

"Good morning, thank you for calling Just The Same Everywhere, how can I help you"?  Why do so many people insist on using this greeting?  It is so boring and insincere.  We all understand the rules of supply and demand, if there is infinite supply then the item is cheaper.  Well, there is a ton of this greeting in all industries throughout the United States.  It is a cheap and insincere greeting, one might say last years unwanted overstocked design that is now available at the local dollar store.  Yes, I called, and the local dollar store actually answered there phone that way.

You only have a few seconds to impact the energy of the conversation, so use those beginning seconds wisely.  Pick a sincere greeting like:  "I'm glad you've called Great Estates".  Pick a marketing greeting like:  "It's a Rental Round Up at Sonata Ranch".  Pick a fun greeting like:  "You've just reached Pennington Park, where residents are always cool by the pool and having fun in the sun".  Of course, pick an appropriate greeting that fits your asset and clientele - but just make sure it is different and catches their attention while setting an upbeat positive energy and tone.

Now the hard part, YOU.  It is easy to get caught up in the rat race of office demands.  Unexpected residents visiting, walk-in traffic, surprise reports due, vendor visits, unannounced inspections, etc.  Often we find ourselves picking up the phone on the fly, not giving it the attention deserved.  We have to step back, breathe, and remember - this is a potential commission or renewal calling, the very item that insures our success and employment.  The phone is like a courtesy alarm, reminding us that on the other end is opportunity, a destiny of success or failure that we are able to control.

Change is good, focus is good, success is good - so mix it up a little today, promote your phone to the top of you and your teams priority list and keep it there.  I guarantee, it will ring in continued great rewards!

Are Your Leasing Consultants Motivated? If Not, It Is Your Fault!

Leasing Consultants are an interesting breed.  They are a roller coaster of sales motivation, when they are up they are up, but when they are down ... it is the fault of the market or product.

"This is a bad market, our rents are way to high for everyone."

"I can't rent that unit because it has dark brown carpet in it."

Have you ever heard any of the above excuses?  Yet the interesting part is, if you check their guest cards you will find them in complete disorder with limited to no follow up documented.  If you ask to see their outreach log, you will find it empty.

Many people feel that these individuals are lazy and are just looking for excuses.  Well the fact of the matter is, they are financially bored.  The key to keeping a leasing team on track, motivated and successful is to consistently mix up the financial pay offs for them.

As soon as you put an additional $100 commission on that over priced apartment with ugly brown carpet it will be rented within a matter of hours.  Oddly enough, it has sat vacant for 90 days costing us well over $2400 - why did we not offer the bonus spiff?  Probably because we think it is their job and it shouldn't be required.  Well, fact of the matter is, the same program day in and day out is like eating mac and cheese every night for dinner, you just get tired of it and desire something new and different.

It does not always have to be as costly as $100.  It just has to be something new and exciting.  Please see examples below.

• Apartment Mystery Board - Put up a board with envelopes for each vacant unit, unit number on the front.  Inside the sealed envelopes have gift cards, cash, a free day off pass, etc.  When they rent an apartment and the applicant has been approved, they get to open the envelope and claim their prize.
• Rental Wheel of Fortune.  Again have sealed envelopes with letters in them that complete a mystery phrase.  Each envelope could have differing amounts of letters.  When they rent an apartment and the applicant is approved they get to choose an envelope.  Whoever solves the phrase gets a prize.  Everyone keeps trying for more letters even once the first puzzle is solved.  At the end of the month you have a super phrase that they can use their prior earned letters on to win a super prize.  Each person gets to put up one letter and try to guess. Then move to the next contestant.  When you run out of letters you have run out of guesses and are out of the game.
• Who Wants To Be A Commissionaire - Set up small sealed boxes on a table, one for each vacant apartment.  Each time someone rents an apartment and the applicant is approved, they are able to open the box and see their commission.  Commission amounts should range from their standard commission to higher commissions.
• Mystery Gifts - Buy items at your local Target such as CD's, candles, DVD's, T-shirts, etc. and wrap them up beautifully.  One gift for every vacant apartment.  When they rent the apartment and the applicant has been approved they get to choose a gift.

Remember, most of the time it is not the rental amount or the market ... it is the motivation of the sales team.  A great sales person can sell a drowning man a bucket of water if they are motivated.  It just requires some pre-planning and dedication on the managers part to keep them on the right sales path.

Enjoy your journey to the land of higher occupancy!



Social Media Overload

I once considered myself a semi tech savvy person, until the onset of social media.  I remember attending my first social media seminar and within minutes glazing over due to complete information overload.  I think in the beginning everyone was merging advertising venues like Craig's List into social media venues like Facebook.  No matter what, I was definitely overwhelmed and more importantly I was frustrated.  Everyone was presenting as though social media was the new cure for all apartment industry marketing and retention issues.  I continued to go to more social media trainings and in turn continued to grow more frustrated.

Just when you thought you couldn't become more overwhelmed, all of the print and online providers started hard selling you on their social media management tools.  Then new vendors came out of the woodwork offering total social media management services.  At this point, had someone come to me and offered up a mental management tool - I would have jumped on it!  Unfortunately I did not find this mental management tool booth at the NAA trade show.  Instead, I found yet another social media seminar with a pro and con panel that argued back and forth if it was worth the investment.  Yet again, I glazed over and walked out dazed and confused.

Ultimately I dove in, one site at a time and defined what they could do to benefit individual assets.  During this definition process I assigned sites into three categories;  1) Social Media, 2) Marketing, 3) Combo.  My operating thesis was that Social Media sites were designed to communicate and inform existing residents and build a sense of community.  Marketing sites were specifically designed to attract and lead new residents to my asset.  And Combo were sites that did a little bit of both.  Categorized examples can be seen below.

Social Media Sites

• Facebook - if used well, can help to promote resident events, neighborhood events, city events and deliver upbeat and informative communications to residents. 
• Twitter - again if used well and managed well can be a fun and great rolling communication within your resident base
• Blog Spot - well as you hopefully are experiencing, can be an entertaining and engaging way to inform and educate others while allowing them to comment on your blogs

Marketing Sites

• Craig's List - a great way to affordably advertise vacant apartment homes for rent
• Backpage - another great way to affordably advertise vacant apartment homes for rent
• Google Search - a great way to get your property pictures right on the Google search engine homepage and a link to your website.  Often times industry guides or industry .com sites put this info on for you, but it then links to their site, therefore showing them all of your competition.  You want to fully claim your search site and have it link to your asset and company website.

Combo

• Foursquare - This is a great application that allows you to engage your residents while also promoting your community.  Basically it is a game of check-in.  As you check-in to locations repeatedly, you earn badges and ultimately can become the mayor of that location.  You are able to offer specials such as stop in today and have your application fee waived or the first 20 residents to arrive at the pool get a free personal size pizza coupon from a local vendor.

Yes, there are a million more, but unlike all of the seminars I went to, I am choosing to only give you what I feel to be the most important ones.  Once you have conquered these, then you can move on to explore others.

Probably the biggest question asked is:  "How do you handle negative comments and postings?"  On many of the sites you do have the ability to approve, deny or remove postings.  This is something you select during your account set-up process.  On the ones that don't have this option, most companies have found that replying with an apologetic public response on the site and a new invitation to call and discuss the challenge is highly respected by the other readers.  The way I look at it is, at least you have the opportunity to respond, unlike ApartmentRatings.com .

The other challenge that should be duly noted is in regards to the posting teams.  Most of these sites require a great deal of writing skill, spelling skill, editing skill and above all written diplomacy.  I have found it harder to locate the perfect on-site employees for this job, than I have found managing the actual sites.

So, don't be afraid, just dive in one site at a time.  But beware, they do become addictive.

Gotta go, have another blog to write!

Blinded By The Concession Therefore Unable To See The Need For Revenue Management

I really am not for sure who is more blinded by the concessions; leasing, management or the prospective resident.  But what I do know is that the once declining economy caused the blindness, and we are preventing the now stabilized and slowly increasing economy from becoming the cure.

Let's start with concessions, then and now.  A year plus ago move-in and renewal concessions were needed to actually motivate paralyzed renters to stay or move.  Prospective residents could not bring themselves to even consider a community unless there was a substantial concession in place.  Most of these concessions ranged from one to three free months of rent.  Along with these concessions, companies were also dropping their market rents bringing their revenues to an all time low.

Today the motivation for offering concessions should be looked at differently.  Concessions should not be considered required as historically, but instead should be considered as a marketing attention grabber.  Many companies cannot fathom raising rents while offering concessions.Why not?  Will the "Rent Raiser Cops" come and arrest you?  Don't let concessions blind you from the continued need of revenue management.  Even as you continue to offer and decrease your concessions from one month to half a month, you can raise your rents $3, $9, $17 or $22 along the way. The concession today is merely to get your community to stand out in advertising, get the prospective residents attention and to motivate the initial inquiry call.  You know the old retail trick, mark up the sweater 20% and then have a 25% off sell, therefore only sacrificing 5%.

Provided you have a strong sales team in place, who energetically narrates your amenities and strongly believe in the product they represent ... then they can turn that concession generated inquiry into a higher rental amount lease.

Look at the statistics.  People are spending again, not at the original rate, but definitely spending.  Car sales are increasing, 2010 Christmas spending was way up compared to 2009 and the hospitality industry is reporting huge increases in restaurant food consumption and hotel overnights.

What makes the apartment industry impervious to these positive spending trends?  YOU and YOUR TEAM!  So, go out on an untraveled limb, keep your concession to grab their attention, but raise your rents behind the scenes.  Revenue Management is alive and well ... you just need to practice it a little differently.

Everyone Thinks They Are A Designer

I am sure this applies to many of my readers, though you hate to admit it.  There is a certain intoxicating rush that comes along with the opportunity to be in charge of creating a model or managing an interior designer.  The good news is we know exactly what we want, and we cannot wait to get it set up.  The before and after is the absolute most exciting part.  The bad news is, we may have a limited outlook of what goes into design.  Often these limitations have come from what our mothers taught us, what we have seen in others homes or on showroom floors and what we have purchased for our own homes.

Good apartment model design has a litany of key concepts that must be intertwined in the design in order to reach the full potential of your investment.

5 Things Not To Do When Executing Model Design

1. DO NOT go with the ordinary or traditional.  Your model should be extremely memorable and set you apart from your competitors.   This is not achieved by mimicking the traditional living rooms and bedrooms that you find in your own home, your parents home or many real estate for sale models.
2. DO NOT use earth tones.  Bright colors, unique furniture and interesting accessories are a must.  Touring a model should be a very memorable experience for your prospective resident.  Upon completion of the tour, when they ask you where to buy a specific item they viewed, it is a compliment and a sign of success.
3. DO NOT put hard to manage items in the model.  Sofas with tons of throw pillows to manage, glass top tables with finger prints to wipe off, puddling curtains on the floor to vacuum around, etc. need to be avoided.
4. DO NOT over design the models.  Keep the design streamline and closer to the minimalist end of the continuum.  This creates a larger vision of space, mobility within the apartment and visual cleanliness.
5. DO NOT use models as corporate suites.  It is inevitable that things will get damaged, dirty and worn.  A model is to be perfect.  If you cannot afford to maintain the model as a vacant unit, then abort the model concept and settle for mini-models you can transfer throughout vacants.

Models should be outside of the box.  They should reflect a hip unique view point on apartment living.  They should have hard to find items in them that become memorable conversation pieces. 

Let's face it, none of us are selling anything unique.  We have square footage, wall to wall tan carpet or ceramic, kitchens, baths, closets and balconies - typically very similar to our competitors.  Your model needs to reflect a vision of lifestyle that your potential renter has not considered.  This vision has to be so vivid that it permanently lodges in their mind.  While visiting your competitors, all they can think about is your model and the lifestyle it portrayed.  It should be MAGNETIC, drawing them back to you, eager to apply and make a deposit.

Here are some final hints to help you capitalize on your model.  The key, make them use all five of their senses.

Visual (Sight) - bright colors, cool lighting, unique furniture and unique accessories

Auditory (Hearing) - radios/music in all of the main living and sleeping areas

Tactile (Touch) - furniture, pillows, throws and accessories of touchable fabrics like chenille, velvet or suede

Gustatory (Taste) - candy, cookies and refreshments in the model

Olfactory (Smell) - room deodorizers, preferably vanilla, proven to be a calming scent

The Carpet Replacement Nightmare

As many of you know I have been in the apartment industry for over two decades.  I have been blessed to consult with and work for some of the most intelligent Principals, CEO's, COO's, CFO's, Presidents, Executive Vice Presidents and Vice Presidents in the industry.  And yet, every year at budget season they all seemed to be stumped with the past years overage on carpet replacement.  It is like the "Ninth Natural Wonder of the World" to them. 

1. Great Barrier Reef
2. Amazon Rain Forest
3. Grand Canyon
4. Sahara Desert
5. Galapagos Islands
6. Ngorongoro Crater
7. Halong Bay
8. Iguazu Falls
9. CARPET REPLACEMENT

Consistently each year I sit and listen for hours to these brilliant individuals discuss that yet once again, carpet replacement is over budget.  They sit there with wonder and dismay on their faces as they discuss the three to five year life expectancy, and how it is impossible based upon turnover that they should be over budget.

Within minutes the community manager and/or maintenance supervisor have tread marks on their bodies from having been thrown under the bus.  Then they move on to miraculous un-thought of concepts like patching and dying and they get excited by this new delusional world of answers.

I say to these brilliant executives, GET A DAMN GRIP!  Neither cheap or affordable apartment carpet  has nor ever will have a three to five year life span among the average renter.  Pull your community manager and maintenance supervisor from under the bus and replace them with either the vendor who sold you the life expectancy or yourself for believing the vendor year after year. 

Stop wasting valuable time analyzing what has been for years and start running the numbers on the long term pay-off of ceramic or porcelean tile.  This tile lasts for years, increases the value of your asset and often justifies an amenity rent increase for market rate assets.  But most importanly, it prevents you from being nominated for the "Most Likely to Beat a Dead Horse" award again this year!