Is Turnover Killing Your Profits?

Is Renter Turnover Killing Your Profits?
By Drew DeMasters

Author of Landlord Marketing Secrets

You probably agree that almost nothing is worse than having an empty rental property. Two kinds of costs can hit hard: real costs (like utilities, taxes, maintenance, and cleaning) and opportunity costs (like lost rental income and higher risk of crime).

In this business, we call it the “occupancy rate”. But that’s kind of a cold, impersonal statistic. We can’t really tackle the problem until we stop thinking at the property-unit level and start thinking at the customer level – each of your individual renters who occupy your properties. Here’s a three-point plan to reduce renter turnover.

1. Customer satisfaction.
   Do you really know your renters? You should. How they found you, why they chose to rent from you, if they are satisfied with their experience, if they will recommend others to your properties.

   Answers to these questions are valuable insight you can act on to learn more about who your renters are. But most importantly, it gives you the chance to understand why customers might be leaving you and if there’s anything you can do to prevent it. (there always is, by the way) It’s often because of loud or annoying neighbors, petty crime, or a slow response to maintenance needs. These are things that push your renters to the breaking point, and rightly so.

   So, how do you know if your renters are satisfied? Ask them. Send out a short 5 or 10 question survey to request feedback. And when they give you feedback, share what you learn with your renters. They will appreciate your effort to know them better. Chances are, they’ve never been asked before by their landlord. And you will definitely learn something.

2. Show the value (meet customer needs).
   What makes you different from every other landlord or apartment manager in the market? There has to be something, why else are you in business? Consider what your “competitive advantage” or “unique selling proposition” is. If I am looking for a place to rent, what would tell me about your rental units? Why should I consider renting with you?

   To convince me to rent from you, you need to show me what sets you apart from the dozen other places I looked at this week.

   But to keep me renting with you month after month, year after year, it takes more. You have to show me the value. In other words, you have to keep earning my business.

   So, what are you doing to make your renters stay with you? Send a monthly community newsletter with helpful living tips, recipes, entertainment options, etc. Remind your renters of the benefits you offer: gym, swimming pool, covered parking, convenient location, mail pick-up, etc. Create reasons to interact and engage with your renters. Plan a seasonal party or BBQ. Organize a ping-pong or volleyball tournament. Dream up safe neighborhood activities and events for your renters’ kids. Think outside of the box, and you will begin to see your renters returning the favor through their continued loyalty.

3. Reward your best customers.
   And speaking of loyalty, say “thank you” to your best, most long-term renters. Do something really special to make them feel important. Why? Because they are your biggest advocates. Your future growth as a landlord rests squarely on the shoulders of your best renters.

   And remember how much they are worth to you. Calculate the profits you’ve made over the lifetime of each your best renters. It’s thousands or even tens of thousands of dollars.

   Now imagine one of those best renters moving out. That’s a huge loss you don’t want to see! So, minimize your risk by earning the continued loyalty of your best renters.

Drew DeMasters is a landlord and marketing strategist. His new book Landlord Marketing Secrets is available at www.landlordmarketingsecrets.com
He can be reached at ddemasters@landlordmarketingsecrets.com

Pre-published version of "Landlord Marketing Secrets" now available!

The pre-published version of my new book "Landlord Marketing Secrets" is now available through MrLandlord.com at this link -- http://www.mrlandlord.com/mllshop/clearance.html

The published version should be released in September.

Share of voice

So, a term I learned a few years back is "share of voice." The closest thing I can think of to compare it to is market share. If there are 10 apartment buildings in your town, and you own 1 of them, your market share is 10%. Most of us get that concept.

But what is your share of voice? That's different entirely. Share of voice is a measure of all your marketing efforts, relative to everything else going on in the market at the same time.

Think of a big Thanksgiving dinner with all of your family sitting, eating, and clanging dishes around the table. Conversations are taking place in front of you, on both sides of you, and all the way at the other of the end of the table. Everybody is talking at once, including Uncle Larry.

But then he gets into one of his war stories, his voice getting louder and louder as it goes. Soon, other conversations are dying down as people can't ignore him any more. But Uncle Larry is on a tear, seemingly oblivious that he now has most of the dinner table as spectators.

When many conversations are happening, everyone has a small share of voice - including Uncle Larry. But as others resume eating, and he gets louder, his share of voice becomes too much to ignore. He then dominates the entire dinner conversation.

As landlords and business owners, we need to be like Uncle Larry. With only a small share of your market, many of your marketing efforts may be like leaves in the wind. And it's hard to get noticed, let alone influence anybody to buy. Just open up an Apartment Guide magazine - hundreds of competitors all clamoring for attention: same features, same look, same everything. This is no way to market yourself.

And the irony is that the smaller your market share, the greater your share of voice must be to breakthrough and grab the attention of your target audience. Conversely if you're the big player in your industry, you may be able to spend less putting your message and offer out there because everybody already knows about you.

Think of new ways you can increase your own share of voice in your market and see the results start to pay off like never before!

Just ask

Here's something I'm learning lately. If you want something, ask for it. If your logic is sound, chances are good you will get it.

These days, I'm submitting the manuscript of my new book to CEOs, company founders, and national experts on landlording and project management. And I have yet to be rejected. Every single person I've asked so far is happy (some even eager) to give a testimonial or review of the book.

Now, I fully expect this streak to end. Maybe even with the next person I ask, but here's one thing I'm sure of - chances are good as long as I put in simple terms why I've written the book and how it will help landlords turn their businesses around. As many of my testimonials are landlords themselves, it's really encouraging to me to see an early appetite for the material. Particularly by some of the giants in the industry.

Also, it's proof of something I learned in a writing class once: the only one who can sell my book is me. No one else can do it for me. This is even true of asking for testimonials and reviews.

So here's what I'm happy to announce:

Scheduled release for 1st run of 2,000 copies is August 31st, 2010.
The selling price will be $19.95 (plus $3 shipping and handling for delivery).
It will only be available on my landing page being built at http://www.landlordmarketingsecrets.com/
With every purchase, I will be offering my FREE report "10 Tips Every Landlord Must Know."

That's the state of the union. It feels like I'm at the 24th mile marker of a marathon run; it's exciting to see this journey transition to a whole new phase.

A phase where I prove again that I can create the best multi-channel marketing strategy that ever existed. I've done it dozens of time for clients, but this time it's personal. My own money's on the line. And there's hardly anything more motivating than that!

Update on book

I'm making good progress with the book lately. List of recent successes -
* Have gotten usage permissions from most of my quoted sources
* Have purchased the domain name. Now researching what the look and functionality of the site will be.
* Beginning to envision and enlist some help in creating concepts for cover art (thanks Dave!) and other illustrations
* Am doing a final line-by-line re-write of the entire book currently. This is actually kinda fun!
* Most of all . . . having fun dreaming up the best multi-channel marketing plan I've ever created to promote the book.
* Finally, learned something very timely today about the dual-impact of two things: 1) good SEO for the site and 2) the overlap effect that blogging and SEO have on driving awareness and traffic to the site

Integrated vs. Multichannel Marketing

This title doesn't make any sense. But the point is that integrated and multi-channel marketing are not the same thing. However, today they are used almost interchangably. And the biggest culprits are advertising agencies and marketing companies. I know because I've worked on the agency side for over 10 years . . . for many they are little more than buzzwords. Everybody wants to be integrated, whatever they perceive that to mean.

Well, here's the difference. To be integrated means to project the same, consistent, unified message throughout your communications. Whether your message is "value", "quality", "speed", "convenience", etc., integration speaks to the common thread that runs throughout your marketing efforts.

With this definition, you can probably see how the word "multi-channel" is clearly different. Multi-channel means simply to utilize various sources, methods, tactics, or technologies to reach your target audience. In marketing speak, it is using the various channels available like direct mail, email, websites, paid and organic (SEO) search, banner ads, social media, TV, radio, call centers, mobile messaging, out-of-home advertising like billboards, point-of-sale (POS) displays, street teams, and the list goes on.

This is why the the phrase "integrated, multi-channel marketing" is perfect but either term without the other is incomplete. Integrated, multi-channel marketing is the second most powerful strategy in all of direct marketing. But don't take my word for it. Test and prove it for yourself in your own business.

More in future posts on what the #1 most powerful strategy is.

Transaction or Interaction?

Have you heard somebody say “if I had a quarter for every time X happened, I’d be rich”? Well, if you had a quarter for every separate interaction that you have with your clients, you’d be even richer!

The point is that in business, our customers interact with us a whole lot more than they transact with us. That is, they spend much more time visiting our store, browsing our website, talking to our sales people, and researching our products/services than they do actually buying. The point-of-sale itself, is just a brief moment by comparison. Yet, when it comes to marketing, that’s really what we spend at least 90% of our energy on – trying to drive and stimulate that all-important transaction. Some research suggests that consumers spend an average of 3 days comparison-shopping and researching prior to making an actual purchase. And the amount of time spent prior to purchase increases for higher-ticket items. We’ll do our homework carefully before buying a car, a house, even a nice jacket. But for a candy bar or pair of jeans, we’ll spend much less time in the pre-purchase phase.

So, here’s the dilemma. Why are marketers spending all of their time and focus on the customer transaction, if that represents only 5-10% of the time that the customer is spending with their brands? Because that’s when the money changes hands, that’s our livelihood, our bread-and-butter. But shouldn’t we care as well in all of that up-front planning, pre-purchase research, and comparison-shopping as the buying customer is? We should. It’s really the incubation period of a new customer relationship. It’s when you are top-of-mind, squarely within the customer’s consideration set, and are best positioned to “close the deal.”