What Renters Want: Providing a Great Multifamily Living Experience
Fulfilling the customer experience lifecycle critical to successful lease renewals in multifamily
Your residents and prospects want a pool, closet space, decent fitness facility and a business center. When looking for an apartment, they’d rather walk in unannounced than set an appointment, and you can bet that any negative reviews will get a closer look.
As for technology, package locker systems are way cool, and so are smart homes. Some would even pay $30-$50 more a month to have them. Leasing and making payments online is convenient, but most want to maintain personal interaction with the leasing agent and staff. Pets are the new amenity, and feeling safe and secure is critical. Seeing is believing; renting an apartment sight unseen isn’t always for everyone.
And, oh, it would be nice if property management occasionally asked what was on residents’ minds and acted upon it.
So said a panel of 17 residents from California and Nevada who created a buzz at one of the most popular sessions at July’s RealWorld in Las Vegas.
The panelists – from Millennials to Boomers – represented a diverse set of renters and properties. Their rents ranged from $638-$3,500 per month from one REIT and four property management companies. Forty-three percent found their apartment online, and most had spent six months or less in their unit. Twenty-three percent moved to apartments within the same city.
Their feedback was designed to give attendees and property management executives clues on how to better fulfill the renter lifecycle, the critical period from lease to renewal that can languish and push out a resident if property managers aren’t careful.
Property managers must understand importance of connecting with residents
Industry professionals say the timeline of the customer journey includes the apartment search, move-in, living in the community, renewing and moving out.
While renter needs vary, managing the total resident experience should be throughout the entire journey- their living experience from move-in to move-out. Property managers must understand the importance of connecting with residents throughout the lease process, not just at lease sign-up, to enhance lease renewal opportunities. And as fast as trends change in multifamily, properties must keep up to fulfill the customer experience.
Joanna Ellis, CEO of Ellis Partners in Management Solutions, says property managers are losing ground on fulfilling the ideal resident lifecycle. Industry data compiled in the first quarter of 2016 by Ellis Surveys shows a steep decline in maintaining a connection with residents in the last half of the cycle.
Ellis says that by connecting with residents they will pay more, stay longer and refer friends. Renewals go much easier, too.
“Understanding the customer experience is critical to our success,” she said. “When we think about customer journey, we go in search of info, looking for all types of tools and details to help us make a decision. As we do that, we may end that relationship. This is the same journey that our renters are going through. We have opportunity to touch the customer through the journey.”
It’s a particularly pertinent subject, considering the latest news from Kingsley & Associates and Multifamily Executive indicates that renewal intentions have reached an all-time low. More renters are thinking about shopping around rather than staying put − 51.4 percent of residents say they “probably would” or “definitely would” renew their lease, down almost a percent from 2015. Why? Dissatisfaction with rental rate and community management are the two leading factors.
While economics limit control of the former, the latter relates to the customer experience and ultimately is in the hands of the property management team.
At RealWorld, Ellis and four other multifamily professionals agreed that residents typically have a strong customer experience during the first three months of the lease agreement but the mood wanes when the honeymoon is over. The front office and residents often lose touch, which can drive away residents hit the property’s pocket book. JVM Realty Corp. COO Greg O’Berry says an unhappy resident costs his company about $1,300, factoring move-in and turn costs, as well as vacancy loss.
Strong first impression should continue throughout the cycle
Ellis says property managers should be at their best when prospects come calling, and it’s their customer to lose. Her research shows that 85 percent of those who visit a community are interested in renting, and 61 percent want to sign a lease in the next 30 days. Most are looking for a better location or are moving because of a personal circumstance.
The No. 3 reason residents look elsewhere, however, is they want a better customer experience. Translation: the community they are currently living at is dropping the baton.
According to Gartner, Inc., a leading information technology research and advisory company, customer experience is the new competitive battlefield. Consumers are typically well-versed about a product before they buy, and service is the cherry on top. Ellis says it’s the multifamily industry’s job to figure out how to convey that to their customers.
“It’s a highly competitive environment,” she said. “The customer has so many options and they’ve got information available right there at their fingertips. They already come equipped knowing the rents, pricing, amenities, etc. With that information, they are trying to confirm their decision whether to move forward. It’s going to come down to that customer experience.”
O’Berry says high-level customer experience takes hard work. The race to renewal is no sprint and has to not only jump to a good start but sustain the intensity throughout the entire cycle.
“We focus on the customer lifecycle, not just the move-in process,” he said. “Every touch point needs to be positive interaction. You build a sustainable trust with residents, through move-in, work orders. Every interaction has to be a positive one.”
The customer experience has to be personal, Ellis says. People are impulse buyers and emotion drives a lot of the decision making process.
“A lot of that comes from interactions, impressions we’re making with customer all throughout their journey,” she said.
Many resident panelists said apartment staff and communication weigh in their decision to renew. Some are motivated by financial incentives, but most said they won’t leave just to save $50 a month. Loyalty went out the window, however, when significant savings were involved as long as the community and amenities were comparable.
Freebies are nice, said one resident, but a strong community connection and a good relationship with the front office is enough to re-up a lease. One even said she accepted an increase in rent because of friendships with neighbors.
Customer feedback is valuable information
Kimberly Lang, Senior Vice President of Consumer Solutions at RealPage, said resident expectations have changed dramatically in recent years and many amenities are assumed to be included in the living experience and rent. While panelists were willing to pay extra for things like package service, streaming and smart home technology, most felt that service and some basic amenities like a good pool, plenty of closet space, fitness facility and business center should be part of the deal.
One panelists shared he expects online payment to be on the portals, but many expressed concern over security of their personal information and preferred to sign leases in the office. They weren’t opposed to completing documentation online but wanted to be face-to-face with staff when signing the dotted line to get a better feel for how they will be treated as a resident.
“I’d rather sign in the office and see how management supports me, if they have good customer service, that they are listening to my questions and concerns, and for what I’m looking for,” said one Baby Boomer. “It’s somebody I’m looking at and getting peace of mind, rather than a screen. I’d rather talk to a person.”
A younger renter said the trust in doing business online may be a generational preference, and that Millennials are more likely to lease online from start to finish than Baby Boomers. However, one man who looked about 30 years old said he would be reluctant to make a deal with a property without sitting in front of someone first.
One size does not fit all, Lang said, but more importantly the responses supported residents’ desire for strong customer service and relationships. Customer Service is very important in today’s world as technology and online services evolve. At the end of the day, we can’t lose the human touch of any solution or service, whether its online or in person. “People feel better when they can have that one-on-one contact at their fingertips and whenever it’s convenient for them. This is why customer service is so critical and must be boosted to support the busy and hectic lives we live today
Prometheus Real Estate Group Vice President of Marketing Stephanie Versin says it’s important to take the pulse of residents throughout their rent cycle in order to improve and maintain acceptable retention numbers. Prometheus surveys residents twice a year.
“Customer feedback is valuable to us,” Ellis echoed. “What you’re doing through that process is earning the respect of the customer. When you fall short, you’re not meeting expectations. It’s setting those realistic expectations with those customers.”
But getting resident feedback lacked at the resident panelists’ properties. Less than half raised their hands when asked if they’d filled out a survey where they lived. Some said they’d never gotten one, and another said he didn’t fill them out because it didn’t matter.
“I don’t think they look at them,” he said. “A waste of time.”
Not so, said another resident. She said having an opportunity to give feedback would improve communications with property management. Both sides would know where they stand with each other.
“Ask for feedback and take action,” O’Berry said. “If you don’t take action, it’s worse than not having surveyed them in the first place.”
Critical moment of interaction important to understanding the customer
That critical moment of interaction, O’Berry says, is so important to understanding the customer experience.
“Every time you have a touch point with a resident it’s an opportunity to meet or exceed their expectations or fall short,” he said. “The perfect customer experience, every time you have interaction, is they leave that knowing you met their expectations.”
And renewal day becomes a lot more enjoyable.