Boosting your Marketing Results with Business Intelligence
It’s safe to say that most property managers still rely on relatively basic metrics when evaluating their marketing spend.
Some look no further than cost per lead – even though lead quality can differ hugely between sources. Cost per application gives you a little more information, but what if the applicants are sub-standard and mostly wasting your leasing staff’s time?
Cost per lease is more useful; at least you can link your lead sources to actual signed leases and real dollars.
All of these numbers are surely helpful, and a whole lot better than skipping ROI analysis altogether (yes, many still do!). But nowadays, easy-to-use business analysis (BI) tools serve up eye-opening stats that tell you a lot more accurately where to direct your marketing dollars at any given time.
Let’s look at a simple example. Renters who stay longer are worth more to you. When someone moves out, there’s both the turn cost and vacancy loss to consider. This cost is typically high enough, in fact, that it’s worth skewing your marketing spend towards sources that generate renters who tend to stay a long time.
But do some lead sources actually generate more loyal renters than others? Surprisingly, the answer is yes, and the dashboard of a good BI tool shows you quite clearly the winners and losers in this regard.
What you’re looking for is the “lifetime value of a customer” – what they’re worth to you over the long haul, and not just how much it costs you to get them in the door. To understand this value, you have to factor in how much you save in turn and vacancy loss when they stay with you longer.
Here’s another example of BI at work. Your need to fill units ebbs and flows with changing numbers of move-outs and new leases. If you’re smart, you’re planning ahead to keep vacancy low. But how do you match lead sources to your vacancy projections? BI tells you which sources generate prospects who tend to move in quickly vs. those who take their time shopping for apartments. So if those vacancies will be upon you soon, you can pump up the lead source with the quick-decision renters.
But can BI help you adjust your marketing to move a certain type of inventory? Well, everyone knows you don’t try to lease up an A-class property by spending money on a lead source that produces low-income prospects – and you don’t need BI for that. But what about number of bedrooms? If you’ve got a property with a load of three-bedrooms coming open in the near future, wouldn’t it be great to know which lead source turns up an unusually high number of people who want lots of space? BI tells you that.
SOURCE: “Bedroom Type by Ad Source” widget/chart, from the Marketing Dashboard
Though there is overlap, BI is not the same as revenue management, another technology that is quickly separating the winners from the losers in our business. The core function of revenue management, price optimization, helps you determine the exact right price to charge for any given unit on any given day based on criteria such as occupancy, type of inventory available, your competition’s pricing and upcoming move-outs.
BI can be effectively applied to all sorts of property management decision-making, and we’ll be looking at others in future blog articles. But the marketing function is a great one to start with, if you’re not already exploiting this exciting technology! Learn more about how BI can benefit your business.