The apartment industry is one that generally resists disruption. There are many reasons for this. Ours is a large industry with highly expensive products that are a significant risk for our customers. Ownership is also often understandably cautious, given the costs of maintaining large multifamily communities. When you have cautious consumers and cautious owners, you get a slow-moving industry.
There are benefits to moving slowly, of course, but there are also risks. The person who moves slowly won’t suffer from being a guinea pig with a new marketing experiment or business strategy.
But a business that refuses to evolve or adapt also runs the risk of missing out on a lot by failing to recognize opportunities for growth. There is also the significant risk of being overtaken by competitors who begin using new technology sooner and gain a major competitive advantage over late adapters.
Unfortunately, it is difficult to recognize the problems that this risk aversion can cause until it’s too late. A regional manager, owner, or marketing director is going with the flow and then one day they notice something: Maybe it’s slipping vacancy numbers in a community that has always been solid. Maybe they hear that a competitor down the street is raising rent rates.
The point is something happens and the decision maker has to shift from comfortably coasting along with methods that have been around for ages to suddenly trying new strategies to maintain the community's current status. Depending on how bad the situation is, they may be making that shift really fast. And you remember what we said above about the industry? We move slow because we’re hard to turn? This leader is about to be reminded of that fact in a painful way.
When It's Too Late to Shift
This is what’s going to happen: Let’s say you’ve been coasting along with a bunch of ILS listings, an old website you bought four years ago, and a community page on your corporate site.
You’ve just realized that you had a bunch of people move out and leasing has been slower than expected--your vacancy is going to dip a few points this month and if the same thing happens next month, you may dip down into the low 80s.
Now you have a bunch of things to figure out:
- Why is leasing slowing down?
- Is it an issue with a lack of good leads?
- Then you need a method for attracting better leads, which probably means giving leads more information about your property before they call.
- Or is your leasing staff not converting leads at the same rate that they used to?
- If that is the problem, then you need to figure out if it’s something simple, like the leasing staff being lazy, or something more complicated--maybe leads are coming in colder than they used to and converting them has gotten more difficult.
- Or is your overall lead volume down?
- If this is happening, then you probably have more basic problems related to your presence online. In other words, people simply cannot find your community.
Depending on what your problem is and what the solutions need to be, you may have a number of new marketing tasks to take on:
- You may need to relaunch your community website.
- This will mean development work by a programmer, design work from a designer, and you’ll also be needing photos and video from a photographer.
- You may also need to figure out hosting and a domain name, depending on your specific situation.
- You may have an OK website, but need to add some content to make it more useful:
- This will require work from a photographer.
- You may need to look into using Google AdWords or some other paid marketing strategy to reach more or better prospects.
- This will require an ad budget and someone who knows how to manage AdWords campaigns.
- You may need to start posting on Craigslist again.
- You’ll need copywriting for this as well as photos for the ads.
- Your website and content may be fine, but there may be some technical problem killing you on search engines.
- You’ll need to work with an SEO professional to do an audit of your website to determine what is causing the problem.
All of these tasks will require a lot of time to do correctly, can become quite expensive, and require specific sorts of skill that more traditional management companies often do not have in abundance. You’re left, then, with a business used to moving slowly and turning rarely and a to-do list that requires fast action and tech savvy. It’s a nightmare scenario, but one that happens more than we’d like to think in the multifamily industry.
Over the next few weeks, we’re going to talk about how to avoid this fate. If you learn to recognize the hidden costs to doing traditional marketing, you can identify problems and make corrections before the crisis moment hits.
The reality is that a crisis doesn’t just materialize out of thin air; it comes from a bunch of smaller mini-crises that go unnoticed. This means that if you can learn to recognize the mini-crisis, you can develop a plan and respond to it before the full crisis arrives. And when you are able to resolve these mini crises successfully, you’re not just averting long-term crisis. You’re creating a new marketing system for your company, tailored to help your communities continue to thrive, even as marketing trends and, most importantly, industry trends shift.