Research Shows Mismatch Between Renters’ Searches and Reality

NAA’s Units Magazine has an interesting piece from Apartments.com about some research they’ve done on renters’ searches. Here’s an excerpt:

Searches on Apartments.com indicate renters are usually looking for a deal that may not exist, according to a new analysis of that search data. On average, the typical user searches for a maximum rent that is less than the actual average rent for a given area. In fact, there is roughly a 12 percent premium between average one-bedroom rents and the average maximum rent for which searchers on Apartments.com look. Searchers want the best price—and who can blame them?

Indeed, the more expensive an area is, the more searchers look for lower rental costs. Areas that have average rents between $2,000 and $2,500 have an average premium of real, over searched-for, rents of 22 percent. The premium for areas that average $1,000 to $1,500 is only 8 percent. No area that averages more than $2,500 in one-bedroom rents has renters searching for maximums above the market average.

Furthermore, the overshooting and undershooting of rents correlates to the percentage of income spent on rent. The more expensive an area as a share of income, the less likely a renter is to overshoot rents with their max search. Linear regression predicts that in areas where a renter pays about 25 percent of their income on rent, searchers will plug in a rent that is only 83 percent of the average. At about 11 percent of income spent on rent, they match their max search with the average (Note: These rent-to-income ratios purposely exclude any instance of affordable, discounted, or reimbursed housing).

You can read the full piece here.

Lease With Your Latte?

Wood Partners has been successful in marketing some of its communities at Starbucks’ in-store or drive-thru lines. Here’s a little about their program from an article in UNITS magazine:

We partner with Starbucks often and have great success with outreach events at Starbucks locations near our communities. One of our favorite ways to outreach at Starbucks and other local coffee shops is to have a pay-it-forward event, where we purchase coffee drinks for the prospects and distribute information about our community.

It creates feel-good experiences that are memorable for the patrons and at the same time, helps us to get the word out about our new communities. I can only imagine the word-of-mouth exposure that our communities receive when the recipients of a pay it forward coffee drink share the news with friends, family and colleagues.

We had a particularly successful partnership with a Starbucks location in Charlotte, N.C. The local Starbucks named a drink, the vanilla-flavored APV Latte, after our newly opened community, Alta Prosperity Village, and we were able to advertise the drink.

Starbucks provided our team with Starbucks gift cards, and we provided our prospects with a gift card after each tour. We have found Starbucks to be a great partner and that they are willing to work with us in most scenarios. The level and type of partnership vary by location.

Get more details by reading the full article.

Thompson Joins Carlisle Residential as Chief Marketing Officer

Carlisle Residential Properties announced this week that Kevin Thompson will be joining the company as Chief Marketing Officer. From an article in Multifamily Pro:

Carlisle Residential Properties, a leading apartment management and investment company throughout the Carolinas, announced today that it has hired Kevin Thompson as Chief Marketing Officer (CMO). Thompson, who joins the Company effective August 1st, will oversee all corporate and community-level Marketing, Branding, Communications, and Public Relations. Thompson will report directly to Matthew Rankin, Carlisle’s President and CEO.

Rankin stated, “We’re very pleased to welcome Kevin to our senior team. Our communications and marketing needs have steadily increased with our growing portfolio and strategic direction. Kevin, with his considerable experience both inside and outside the apartment industry, brings the strategic leadership we need to move to the next level in our Company’s development.”

…For the last six years, Thompson served as Senior Vice President of Marketing at Bell Partners, Inc. He is a member of the Zillow Advisory Board, Vice-Chairman of the National Multihousing Council’s Branding Subcommittee, and a frequent speaker and panelist at industry conferences.

CoStar Getting Aggressive With Apartments.com

Today’s Wall Street Journal has an article about how CoStar is investing aggressively to expand and improve Apartments.com. From the article:

Since acquiring the site early last year for $584.2 million, CoStar has spent about $80 million to update the technology and expand its scope, deploying thousands of researchers to visit and photograph 400,000 rental properties. It even charters airplanes to circle cities in search of leads on new construction.

The site was quietly relaunched last week. Next month, CoStar will unveil a $100 million marketing campaign featuring actor Jeff Goldblum as an eccentric Silicon Valley executive touting the new Apartments.com as a “game-changer.”

The stakes in the ILS sector are high and the competition is heating up:

At the same time, landlords are spending more to advertise their apartment buildings online. According to Kip Cassino of Borrell Associates Inc., which tracks ad spending, landlords will spend $1.5 billion online in 2015, up from $630 million last year.

Not surprisingly, the competition for those marketing dollars is growing. Apartments.com competes on the national level with Zillow Group Inc. and Craigslist Inc., as well as with dozens of local sites in major cities across the country. Seattle-based Zillow, a dominant player in listings for single-family homes through Zillow.com and Trulia.com, a recent acquisition, has been buying up rental-focused listing sites for several years. Purchases have included HotPads, PostLets, RentJuice and New York-focused StreetEasy.

The rest of the article contains some interesting numbers, including what kind of revenue CoStar expects to earn on its Apartments.com property in coming years, and it also focuses on the fragmented nature of the current ILS market. Interestingly, it doesn’t mention many of the players in the apartment market like Apartment Guide, Apartment Finder and ForRent, but does mention Zillow, Craigslist and Move.com. I expect we’ll hear from our friends at the Guide, the Finder and ForRent soon in response to this.

Asking for Bad Reviews

Tired of feeling like you’re being held hostage by ApartmentRatings.com and other ratings sites? You’re not alone, but do you have the guts to do what this pizza joint in California is doing?

Botto Bistro in Richmond is not very concerned about its Yelp rating. In fact, in an effort to undermine the reliability of its Yelp page, the five-year-old Italian restaurant is on a mission to be the worst-rated restaurant in the Bay Area.

To achieve this end, Botto Bistro is encouraging all of its customers to leave one-star Yelp reviews; it is even offering deals for anyone who pens a crummy review: 25% off any pizza and a chance to win a cooking class. (Hat-tip toRichmond Standard.)

Chefs and co-owners Davide Cerretini and Michele Massimo are veterans of the local dining scene, and say that their food is excellent and they run a busy restaurant. According to Cerretini, they simply grew tired of the constant advertising inquiries from Yelp and what he dubs “blackmailing” and review manipulation. (Sidenote: A judge recently ruled that Yelp has the power to manipulate reviews.)..

Cerretini says that business has increased since he began waging this campaign against Yelp, though he notes that it’s also attracted better customers who are more loyal and end up spending more. “We are getting not just customers, but new friends who they like this.”

This is pretty gutsy, but it also goes to show how important it is to build and maintain a strong relationship with your customers. Those efforts will do more to build your business than a bunch of five star ratings online ever will.

How is Tech Changing Your Customer Interaction Experience?

There’s an interesting piece making the social media rounds right now. It’s about a Craigslist post by the management of a New York City restaurant who were trying to determine why their service was so much slower in 2014 than it was in 2004 despite a simplified menu and increased staff. They were able to find security tapes from 2004 and compare them to their current security recordings and here’s part of what they found:

26 out of 45 customers spend an average of 3 minutes taking photos of the food.

14 out of 45 customers take pictures of each other with the food in front of them or as they are eating the food. This takes on average another 4 minutes as they must review and sometimes retake the photo.

9 out of 45 customers sent their food back to reheat. Obviously if they didn’t pause to do whatever on their phone the food wouldn’t have gotten cold.

27 out of 45 customers asked their waiter to take a group photo. 14 of those requested the waiter retake the photo as they were not pleased with the first photo. On average this entire process between the chit chatting and reviewing the photo taken added another 5 minutes and obviously caused the waiter not to be able to take care of other tables he/she was serving.

Given in most cases the customers are constantly busy on their phones it took an average of 20 minutes more from when they were done eating until they requested a check. Furthermore once the check was delivered it took 15 minutes longer than 10 years ago for them to pay and leave.

8 out of 45 customers bumped into other customers or in one case a waiter (texting while walking) as they were either walking in or out of the Restaurant. 

In the end the restaurant’s management found that in 2004 the average customer was with them for 1 hour and 5 minutes. In 2014 that time had increased to 1 hour and 55 minutes, an increase of about 77%. No wonder they were seeing slower service times and an increase in complaints about slow service.

In the apartment industry we spend a lot of time talking about how technology has changed many aspects of the business – the impact of mobile on the leasing process, how to respond to online reviews, etc. – but we haven’t talked a lot about how these new technologies are changing how we interact with customers on a daily basis. I’d love to hear from you about changes you’ve noticed in your daily interaction with your customers and prospects, and how that’s impacted how you do business. Feel free to email me with any stories or observations you have about the changes you’ve seen as a result of the boom in mobile tech.

Marketing by Truck

Cardinal Group Management came up with a creative way to market a student community:

Eddie Moreno, Portfolio Manager for Cardinal Group Management, says his team considered the idea last fall while brainstorming ways to introduce students at the University of Texas at San Antonio (UTSA) to Tetro Student Village, opening in Fall 2014. Branded bubble-gum tattoos were mentioned but the idea just didn’t stick. 

“We quickly came to conclusion that the student body’s familiarity with food trucks would be a key advantage in making the concept work,” Moreno says. 

The Tetro Truck was designed to include two 42-inch flat screen TVs, one mounted on the back wall and another on an articulating arm that swings out of the side bay door to stream the community’s various social media feeds. Each flat screen TV is synced and mirrored with an iPad that allows team members to conduct virtual tours, review the floor plans, site amenities, and ultimately walk a prospect through the application and lease process. 

In addition to on-campus appearances, Moreno says the truck is also driven to local retail centers and future residents’ homes or work places.

 

Years of Reviews Disappearing from Yahoo

Yahoo is an afterthought in many business’ online marketing mix, but it still generates a ton of traffic and Yahoo Local still wields a lot of influence on consumers. That’s why some small businesses are up in arms about developments since Yelp and Yahoo got together. From the Wall Street Journal:

A recent deal by Yelp Inc.  to provide business listings for Internet searches on Yahoo Inc. is getting bad reviews from some small-business owners, who say years of positive feedback from customers have vanished from Yahoo.

Colonial Hardwood Flooring of Lexington, Mass., amassed six years of mostly positive feedback on its Yahoo Local listing, says owner Dan Tringale. But several weeks ago, after Yahoo began posting reviews from Yelp, nearly 50 Yahoo reviews disappeared, he says.

Potential customers searching Yahoo won’t see a 2012 recommendation that Carla Fortmann confirms she and her husband wrote: “This floor is beautiful and it was very carefully done.” Nor will Yahoo searchers find a June 2012 review from Regina Sasso, of Wilmington, Mass., who says Colonial “provided a competitive quote and delivered meticulous service and work.”

Such praise has been replaced by a single, punctuation-challenged Yelp review, from the “Paul M” screen name, “Respected budget got difficult stain taken care of very attentive and house got an offer opening weekend.”…

Since mid-March, new reviews about a business posted on Yelp replace reviews that had been posted on Yahoo Local, the Web portal’s own consumer-review tool. Until a new Yelp review is posted, the Yahoo reviews remain. The listing changes apply for desktop, smartphone and tablet users, as well as for search results on Yahoo Maps.

 

Weathering Craig’s Changes

New policies at Craigslist have rocked apartment managers’ marketing world and Peter Schuh at Multifamily Insiders has some advice on how to react:

Yes, these annoying Craigslist changes are hear to stay. Yes, tracking is dead. No, there is not one weird trickthat will get your html back onto Craigslist.

But there are things that can be done. This is my second list of options. You’ll find the first list here

We’ve all heard the adage about Google: if you use a free service, then you are the product. Well, Craigslist is a free service, and the only difference in using it is that your business becomes a plaything of King Craig. That doesn’t mean we should abandon Craigslist, but we certainly cannot rely upon it either.

Satisfacts Survey Identifies Top 3 Lead Sources Used By Renters

According to this post on Property Management Insider the top three lead sources used by renters are:

3. Internet Listing Services (ILS)

2. Word of Mouth (without social media)

1. Apartment Signs/Driving By/Curbside Appeals

And a frightening paragraph for anyone still peddling news printed on dead trees:

While ratings and reviews are the talk of the industry (and rightly so, as they are becoming the “norm” in the rental decision), it’s important to ensure we don’t neglect some of the old standbys. Some options are quickly becoming obsolete (newspapers, for example, were only cited by 0.8%), but some of the basics still hold true. Ensure your signage is in great condition, is easy to read, and has your community phone number and/or web page listed. A prospect may drive or walk by this morning, look you up on the Internet when she gets home, and call for a tour by the afternoon. Make it easy for her.