“Dear Residents: We Love You So Much We’re Raising Your Rent!”
“Values determine our needs, but our needs determine our goals” – Earl Nightingale. Leasing today to a savvier, well informed prospect is challenging at best. But even more difficult is convincing our current residents that renewal increases are actually worth it.
How can we persuade them of the “added value” concept if we haven’t shown that value throughout their current lease term?
Value-added selling is significantly different than traditional selling. Traditionally our leasing teams sell the apartments, amenities, and community services, making that initial connection with the prospect. Compared to building a relationship between two people, this would be the “dating phase”, with all parties on their best behavior, looking good, speaking well of one another, and building trust.
However, once the “honeymoon” is over, now real life issues begin to emerge. Promises made during that initial relationship phase are put to the test. Miscommunications, lack of compassion, or negative responses to emotional situations can become a harsh reality. Clearly everyone is stressed these days but to our residents, the onsite staff doesn’t have that luxury of lack of patience for the resident, because as they say, “I pay a lot of money to live here!”
So what does our resident really want to offset this increase?
Our resident’s core beliefs are actually pretty simple. They expect a clean, well maintained, and safe place to live without fear of changes that decrease the value of their rent dollars. Day to day operations must include a conscious effort for “caring and improving” the property itself. In fact, sending out updates through newsletters or resident portals showing what we are actually doing all year long reminds residents that value is being added. Maybe entitle the series “Your Rent Dollars Hard at Work!” much like a city or state shows us where our hard earned tax dollars are being applied.
What are the differences between “traditional sales” and “value-added sales”?
Traditional initial sales attempts begin by determining the buyer’s needs and wants though conversational open ended questions such as, “Will you be needing a 2 bedroom and 2 bath?”
Value added salespeople seek to take the buyer’s needs to form a foundation of benefits and value the property has that fulfill those needs and wants. While traditional salespeople make deals, value added salespeople want to make a difference. The fundamental selling skill for traditional salespeople focuses on closing the sale, but the fundamental selling skill for value added salespeople is probing and listening.
A good example of value added selling is a hybrid car. The inherent value of a hybrid car is the same as a regular car. It moves a person from point A to point B. Its value adds can be seen in several different ways. The first is the obvious fuel savings. But there is also added value in less time spent at the gas station and the car’s ability to pollute the air less than a normal combustion engine. The value add in this instance is determined by the customer, and not the company selling the car.
How can we change our current resident retention plans to add more value?
Many companies are masters at changing up their programs to accommodate this process. “Make me a priority” is what our residents are saying. Some effective plans include:
- Good staff responsiveness – Do you always respond promptly to service requests? Are maintenance issues resolved quickly and satisfactorily to the residents? Are complaints handled properly, or are they forgotten? These are all important issues and people will remember how they are handled (or not handled) at renewal time.
- Maintaining the look and quality of the property – Obviously, your properties should be maintained, but residents that do become dissatisfied with their apartment home cite issues such as “the property went downhill.” This can mean anything from neglected landscaping, trash scattered throughout the property, or becoming careless about who you rent to. You residents think of their apartment as their home and coming home to suspicious characters hanging out in the parking lot, or trash blowing around will make a them seriously consider moving come renewal time.
- Keep them informed and involved – What’s going on in the community? A monthly newsletter, holiday wine & cheese parties, an annual property yard sale, all of these things help to create a feeling of community, and that can be potent.
- Consistency in staffing – While a change of staff cannot always be prevented, it’s important to maintain some consistency of onsite personnel. Residents often become very attached to the onsite staff so frequent staff turnover may not only affect property performance, but resident turnover as well.
- Partner with local companies to help retention – One such company is www.ApartmentLife.org. The CARES program is carried out by a CARES Team (a married couple, family, or “team of two”). Once recruited, each CARES Team is placed into apartment communities to live onsite and work with the management team to build community by doing things like welcoming new residents, planning social events, and CARE-ing in times of need. Their teams have been compared to campus RA’s, first responders, “Mom and Dad”, life of the party, and even the heartbeat of the community.
Where did we go wrong in our relationship?
Identifying those missed opportunities during the resident’s tenure is the key. It’s amazing that most people only remember the bad things that happen to them in a relationship instead of the good. On that premise, a property must begin by identifying those “moments of truth”; those times that heavily affect that relationship.
- Documenting every request (other than the normal service requests) or encounter the staff has with the resident is a start. A brief description of the “incident” and outcome gives the team a basis of historical data when and if the situation goes “south” quickly.
- How quickly the incident is handled has a huge impact on the balance of the outcome as well. If things are corrected in a timely manner, (same day if possible), it isn’t the fact that this all happened, but gains credibility in your on site team’s professionalism.
- Random satisfaction surveys during the year can be of significant help in testing the “waters” of satisfaction using KRA’s, meaning key result areas. Two leaders in our industry that focus on gathering information from the current resident and pushing the findings to your social media sites are www.Satisfacts.com and www.RentersVoice.com.
- Some important times would be…
- Shortly after move in or at least within those first 2 weeks
- After 30 days of occupancy
- After a service request, especially those that have had repeat calls
- After a dispute with another resident or staff member
- After the resident has given their Notice to Vacate as an “Exit Interview”
- Some important times would be…
How much increase is too much?
Validating the actual price increase in a particular market area can be tricky as typically the resident isn’t as versed as we are as to what the current market situation may be. Utilizing your competition market surveys to begin creating a realistic guideline helps to validate the increase. However, if your prices seem to be significantly higher, then testing the prices somewhere between what the market will bear and what your highest prices are. Sometimes gradually increasing with smaller amounts can be more palatable to not only your new prospects, but to your current residents at renewal time.
As a company, how do we change our training to incorporate this new approach to selling?
Reviewing, refocusing, and readjusting the company’s basic training concepts to focus on stronger sales skill levels that evoke more emphasis on flexibility to “think quickly on your feet” coupled with utilizing everything your property has to offer on all levels to sell that value. This concept actually begins at the hiring stage; really searching for those unique individuals with talent to not only understand this conceptual sales technique, but really connect with the customer on a whole new level of relationship selling. It’s more than just being a “nice and friendly” person when communicating real world value to our residents today. We need employees who can change the minds of our residents to accept the reasons why the rents are increasing, and STILL want to stay.
People don’t mind paying more for a product or service, but they sure won’t if they see no value in it! Value added selling actually starts at the beginning of the sale so that price becomes less of an issue at renewal time. Being proactive and “showing, not just telling” your residents about the values of living at your community, means you never have to say you’re sorry about higher prices.