(Excerpted from Multifamily Marketing in the Internet Age, by John Helm)
The Internet has become the most trusted and effective method for renters to find information on rental properties.
With nearly 70% of U.S. households using the internet and leading managers reporting over 50% of their lead and lease activity coming from online sources, it is essential for any multifamily owner or manager to develop a comprehensive online marketing strategy.
Components of a Good Strategy
With all of the options open to a multifamily marketing professional today, how do owner/managers craft an online strategy that ensures they are spending their advertising dollars in the most effective manner?
The best strategies will have the following elements:
Comprehensive systems and processes to track all types of spending, including, most importantly, new types of spending.
A full accounting of current marketing expenditures and how that spending is broken down in terms of acquisition costs, both for leads and leases.
A strategy for the allocation of the new planned spending and plans for testing.
Online Marketing Products
For most management companies, Internet Listing Services (ILS) remain one of the more cost-effective ways to acquire leads and leases. The industry now has several pricing models, and an effective strategy uses the ILS’s that work best for a given portfolio’s or property’s situation.
An Apartment Marketing Site, or AMS, may not be the first site renters use in their apartment search, and thus may not be the most cost-effective way to find renters, but renters increasingly use them later in their search process, and they make a very effective closing tool.
Tracking and Accounting for Current Spending
The decisions on where to spend advertising dollars will be only as good as the underlying data used to make those decisions. Leasing office and call center personnel must ask prospects how they found the property and, if the prospect doesn’t know or remember, to list unknown rather than guess or, worse, list a source because of the incentives it offers.
In fact, one management company CEO reported that six months after he cut a certain advertising source at the corporate level, specific properties were still attributing leases to that cut source because they were so conditioned from the perks and incentives they had been offered.
We cannot emphasize enough the importance of gathering accurate lead data. Inaccurate data can lead to false conclusions on the efficacy of certain types of advertising, resulting in the waste of thousands of dollars per property in misallocated spending.
In order to determine the efficacy of its spending, a company should accurately track the following data:
Dollars spent monthly by source
Leads sent monthly by source
Leases signed monthly by source
Close rate by source
Cost of lead
Cost of lease
Developing Your Online Strategy
Online advertising is very much like direct marketing, and good online marketers focus only on the numbers, ignoring concepts such as brand building. This approach works well for the multifamily industry, since except for the largest REITs, spending online marketing dollars on brand building is too expensive.
Some advertising sources are fixed and some are variable. For example, an advertising-based ILS may charge $400 a month for a listing and generate on average 1.5 leases a month, resulting in a per-lease cost of $267. However, if the property is near occupancy, or it does not need advertising year-round, a variable source that costs $325 per lease” but can be turned on or off at will” may be a better option.
The key to marketing your listings online is based on the ease with which you can immediately analyze reliable data to see where leads and leases are being generated. Every apartment building is different and there is no one formulaic method or model that will work for each company. The trick is to have the tools and information on hand that will allow for continual and diligent improvement of your own formula.
Submitted by MyNewPlace.com, an online marketplace for apartment rentals, featuring a free-to-use apartment finder and a database of over six million listings. To learn more about how to optimize your Internet listing service, visit www.mynewplace.com.
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