Marketing for the new age!

My how things have changed over the past twenty years related to marketing.  We have gone from a day when newspaper and magazine publications were the primary mediums to an age of technology and electronic marketing taking center stage.  Today we update postings on Craigslist several times a day, rely on outside sources to insure we get clicks on internet sites, and have more choices as to where to spend our marketing dollars than ever before.  Now magazine publication web sites and Internet locations specifically directed at getting our communities in the eye of our prospects are our primary source.  We are also faced with sites where residents can have what they "feel" is a bad experience at the management office at 9:00 AM, and by 9:15 have something negative posted for millions of people to see.  Our industry has gone from research by a site team about market conditions being the primary determining factor on rents and leasing, to computer programs that can change rents several times a day based on leasing trends and market data from external sources.  

Talk about hitting a moving target, and you talk about what is happening in our business today and how fast technology is changing how we manage and lead our teams.  This raises questions related to how much staffing do we need to balance the marketing and leasing tasks, how do we use and obtain market analysis data, where do we place our limited advertising dollars, how do we manage our time with keeping Internet information updated, and are we depending so much on technology we forget we deal with people both in our office and those that come through the door?  So many questions and so many answers we can be faced with. 

Since we have already identified everything is changing at a rapid pace, one of the first areas we need to address is flexibility.  Do our team members have the ability to multi-task in addition to being able to absorb and use the technology that is out there?  A great example of this is with Craigslist, and how it has evolved.  Then we have the use of YouTube, Google, apartment rating site monitoring, and of course Facebook and Twitter.  Several recent discussions on Multifamily Insiders opened up these formats and how to use them.  This next brings us to sites like this which now should be monitored as information and training platforms related to effective and efficient electronic medium use.  Keeping up with these trends and new information can mean the difference between staying ahead or with the curve or being re-active and behind the curve.   Here we should have someone from the site or training department within a company monitoring this information and passing it on and helping our site teams understand the efficacy as well as changes to help them exceed and excel.  Are site teams using resources to help them manage their time such as calendar reminders and sharing data between management company sites both in and outside of a market?   My research is showing we are not using these tools or sharing technology information and tools effectively or efficiently to maximize Net Operating Income and occupancy.  

This past week I was asked to evaluate two communities as part of a job interview process.  I did the phone shop, site visit, and property evaluation with some results that showed not everyone is using the tools available to us.  This included providing a copy of a copy of a leasing brochure versus a PDF copy being printed that had been cleaned up for professionalism.  I am guessing they maybe just ran out of original professional color brochures, which is a whole other topic raising many other questions.  I received follow-up from only one site leasing person on the phone.   The other leasing person I never heard from, even though they had both my  phone number and email address.  Did I get lost in the shuffle?  Were they not organized or using easily accessible tools so follow-up was less of a burden?  Was there no leadership checking on visitor follow-up because they were too busy doing other things?   Another interview took me to reviewing a company and their marketing.  When going to their site pages on Apartments.com, there was a "management" section where your the link to your company web site can provide valuable information for someone reviewing who they are choosing to live with for their next home.  If you clicked on this link it said, "Object has moved here," with the "here" being in blue showing it was available to take you to another link.  Unfortunately this link came back with an error message, and I am sure from a prospect situation would cause frustration.  Remember, we expect everything in the "techno world" to be right and easily accessible.  How long had this link not been working, and who was responsible for checking it?  Now don't get me wrong in assuming I haven't missed things like this in my career because I have.  Guess what I am saying is the complex environment is ever changing and we constantly have to be evaluating and checking our marketing.  Some of you may have heard the following quote:

This is a story about four people named EVERYBODY, SOMEBODY, ANYBODY and NOBODY. There was an important job to be done and EVERYBODY was sure that SOMEBODY would do it. ANYBODY could have done it, but NOBODY did it. SOMEBODY got angry about that because it was EVERYBODY'S job. EVERYBODY thought that ANYBODY could do it but NOBODY realized that EVERYBODY wouldn't do it. It ended up that EVERYBODY blamed SOMEBODY when NOBODY did what ANYBODY could have done!

 

These and other questions all relate to the marketing and leasing aspects of how "complex" our business has become. I will say this again and again,  this is not rocket science and it all boils down to one area...leadership.  This is why we as leaders must insure we understand this new age of marketing, and how we must develop others we work with to be the best at what we can be.  Hold on tight, as we already have identified the ride has probably just begun!

How to difuse the emotional bomb - Conflict Resoluation

Face it, the property management industry is faced with many challenges related to potential conflicts.  In no other business can we touch so many emotional issues than in property management.  Whether it be finances, pets, homes, cars, employees, children, fair housing, personal property, etc., we have so many opportunities where conflict can be a part of our lives.  Our industry is unique in this regard as well as challenging.

How we handle and address these challenges and how the members of our teams handle them is critical in so many ways.  We tell employees when we hire them how wonderful our organization is, what fantastic benefits we have, what opportunities are waiting, however, we fail to warn or train/condition them for the conflict they will most likely be faced with.  Companies and associations teach fair housing, marketing, financial analysis, budgeting, risk management, and other topics, but few provide tools to address conflict related to residents and employees.

The first rule when dealing with emotional issues is the most important.  To control the emotions of others when dealing with conflict, you first must learn to control your own.  Getting in a "pissing match" with a resident, employee, or applicant will do nothing more than amplify the situation and make things worse.  I am being blunt about this first rule, because more times than not I see team members getting emotional themselves with dealing with conflict they are faced with.  We have all had the resident fly into our office like a ten year old on a sugar high, spitting fire out of every orifice of their body.   If you have not...you will.  I know most managers have also had to deal with employee issues where "going postal" was a though in the back of their mind.  I'm sure the US Post office hates that term, however, we'll use it for now.  There are several things we can do to diffuse conflict, if nothing else but reduce the circumstances that can result from an unfavorable situation.

Rule 1:  See above.  Keep your emotions in check.  The more you are in control, the more you can control the situation.  Once you lose internal control, you lose control of the chance of a favorable outcome.

Rule 2:  If possible, take the situation to a favorable environment.  This means out of other employee or public view, and into a private setting.  Last thing you need is a resident screaming at you while a prospect is coming in the door.

Rule 3:  If you feel threatened, don't address the conflict alone.  There are times when having someone else with you as a witness or if you feel threatened is needed.  If you are not comfortable or you are being threatened, do not go into a room by yourself.  This goes for both men and women and address the situation not the issue.

Rule 4:  Don't address the other person (employee or resident) from behind a desk.  The desk is a barrier and will be seen a such.  I know, you may feel you need this for your protection and if you do...see Rule 3 above.

Rule 5:  Set the groundwork for the discussion.  "Mrs. Smith, I can see you are emotional about this situation and understand your concern.  Before we have an open dialogue, I will respectfully ask that we both remain professional and address the facts and keep emotions in check.  Can we do that?"  This sets the stage for taking emotions down a notch in many cases and lets the other person know you are understanding about their feelings that are in play.  Most of the time after stating this I see the other person lean back in the chair, take a breath, and think about what they are doing. 

Rule 6:  Take notes.  I always let them know I am doing this, even though it may be obvious.  "Mr. Jones, so I can properly document your concerns and have an understanding of the situation, I will be taking notes.  I trust you will allow me to do that."  This again is a great tool for further taking the emotions in check, as they see you "documenting" what is being said.  It also is a great sign you are paying attention to them and their concerns.

Rule 7:  Allow them to talk, and provide the "dramatic pause" before responding.  One of the worse things you can do in a conflict situation is to talk over the other person.  It tells them you are not listening, and in many cases no matter what is said gives them the feeling you are not open as a mediator.  Pause after they have apparently finished a statement, and in some cases they may be just getting started.  You may also find this pause brings out additional information you would not have gotten had it not been there. 

Rule 8:  Look them in the eyes, shut off your phone, turn off your computer, and ask the people in the front office to allow for a few minutes to not be interrupted.  Looking at your computer screen, checking your email, starring at your Blackberry, all are signs to them you are not giving them the attention they feel they deserve.  I usually say, "So you can have my undivided attention, please give me a moment to turn off my computer screen and silence my phone."  This also seems to bring the tension level down and show you are attentive.

Rule 9:  After completing the session, go back over your notes and in particular their concerns with them.  This shows you did pay attention and document the conversation.  "Mrs Davis.  So we can make sure we have an understanding of your concerns let me re-state from our notes what has been presented."  You will also notice no where in that statement did I use the word "I."  It was "we" and "our," as referenced in the above statement.

Rule 10:  The response or answer and how and when to present.  There are times, even though you know the answer is no, you may want to delay your answer until a later time.  Serious situations sometimes demand immediate responses, and some times delayed responses.  If there are questions that you could not answer or to show you are open in your findings, don't respond at that time.  Failure to show you are "carefully" looking at all the details and being fair in your analysis may bring on further conflict.  "Mr. Thompson, I have additional details I need to further investigate so we may be fair and professional in making the correct resoluation.  Will you allow time to insure I have all the facts correct and fully check the information for a fair resolution?  Can I get back to you by tomorrow morning?"  This again tends to diffuse the situation and further lower the tension levels.  Just make sure you get back to them as promised.  On the other hand if the answer is and will be "no,"  don't tell them no!  What?  Are you saying don't give them an answer?  No, I am saying you need to find a way to say "no," without saying no.  As an example:  "Mr. Goodfellow, after reviewing all of the information removing the late fee considering your rent was late is not an option we have."  Here I have said "no," without saying  "no."  If they have also used the "fairness" issues in their discussion, turn this back to them.  "You have stated you want fairness in your comments.  Mrs. Happy, would you agree that it would be unfair for me to do something for another resident I could not do for you?" 

Rule 11:  Don't dismiss them, walk them out.  They are not in school and you are not their parent.  Offer to shake their hand, even if they do not offer theirs.  Be professional, and show that you can be professional even after taking all that has been handed to you by the employee or the resident.

Train your staff how to deal with conflict and review how you deal with it as well.  When interviewing I ask employees the good, the bad, and the ugly questions.  "Tammy, we all know customer service is important and not in all cases do we deal with happy people.  If a resident comes flying in the office upset and somewhat out of control, how are you going to handle it?"  This tells me how they would handle, and if they have been trained to deal with these types of situations.  I have met managers in the business for twenty years, yet they not only will do everything to avoid conflict but don't know how to handle it.  It is our responsibility to insure they have the tools necessary, even then faced with bad situations including conflict.  Be a leader!

Financial Conditioning

Earlier today I was responding to a post on MultifamilyInsiders.com related to increasing rents, adding services, and dealing with "unhappy campers."  In the discussion I thought about how we as an industry have not done a very good job of conditioning and educating our managers and teams related to the financial aspects which are key to success.  While the issue was more targeted to dealing with residents unhappy about change (new services and being charge for them), there were underlying parts of this challenge encouraging me to update my blog.

First, we must do a better job of helping our leadership and management teams understand the financial aspects of our business.  While some companies and regional managers do a good job, I believe we have overall failed to capitalize on key information which can make them more effective in reaching goals and objectives.  Ask a room full of property managers what NOI means, how it is associated with a properties value, and how do you use it in calculations, and I guarantee you there will be some seasoned managers that struggle with the answer.  Remember that increasing revenue or income is only part of measuring our success, and other factors must be considered when looking at NOI and the bottom line.  As an example, in the situation discussed on the site a property was in a market that was doing well and able to increase rents with great occupancy.  Occupancy was around 95%, and they were raising rents anywhere from $40 to $100.  They were facing an additional increase of $18 per apartment while introducing a trash at the door pickup service.  As a result, a group of around forty residents had presented a petition related to the increase and new service.  Naturally, they were not "happy campers" and wanted to voice their opinion.

So, where does this take us?  It takes us to the financial equations and what is called the equilibrium or balance point between income, occupancy, expenses, and what is tolerable based on perceived services from a resident standpoint.  Naturally market conditions will also play a factor and need to be analyzed and monitored.  Basically, where is the cost benefit of an action that has a potential to increase revenue and is not an expense burden?   If my property decides to raise rent by $80 at renewal and the average turnover for the community has been 60%, where is it cost effective for me to drive higher rents versus the offset expenses related to turnover?  Remember that raising rents by $80 per month will generate $960 in new revenue based on a twelve month lease.  To justify or find the benefit to this approach I have to look at what my costs would be if the resident did not renew including painting, cleaning, carpet cleaning, maintenance services, marketing, vacancy loss, etc.  Then there is the incidental costs which can include carpet replacement, appliance upgrades, etc., which might have to be considered.  An example of this would be a resident that has lived in an apartment for four years and if they moved out possibly would require carpet replacement to adequately market the unit.  If they renewed  however, we might get another year or two out of the carpet.  If turnover increases from the baseline and my cost to turn an apartment including hard and soft costs is $2,000 (current national average is over $3,000), now I am trying to justify an increase in revenue of $960 for a cost of $2,000.

Balancing this is not taught, and if it is not taught it is not used as beneficial information.  Another key factor is the use today of lease rent optimizers.  Some programs are revenue driven, some are occupancy driven.  Not sure if any of them factor in turnover expenses, however, that will be a question I ask in an email I will get out tomorrow.    If not, this is a situation that may have exposure to the bottom line.  It may increase revenue or occupancy, but have a reverse impact on Net Operating Income and Cash Flow.  Educating our teams at the sites on the impact and effect on the bottom line is easily taught.  It's like Newton's Law, "for every action there is an equal or opposite reaction."  The decisions we make have consequences, and in some cases we believe they are progress when in fact they can have the opposite effect.  Condition your teams, so they understand this theory and they will have reach new goals for the future.