A Winning Stratgey for the Rent Increase Battle
By Rob Foellinger
It's not a pretty scene to watch. Into the manager's office marches the edgy resident, armed to the teeth with lots of excellent reasons why he believes his rent should not be increased. There sits the outgunned manager armed only with a renewal addendum and lots of excellent intentions.
The resident sits across the desk and waits in ambush as the manager finally musters the courage to sheepishly mention "The Number". Instantly, the manager's desktop is transformed into a battlefield and the objection bombs are falling like rain. The manager wishes she could dive for cover under her bomb-cratered desk, but knows she can only wait for the objection assault to end. When the resident finally runs out of ammunition, the manager tries valiantly to regain her composure and deal with as many of the objections as she can remember. But, the battle is really over, isn't it?
In this lopsided scenario, it is going to be incredibly difficult for the manager to convince this resident Rambo that his heartfelt (or, in many cases, completely bogus) objections and concerns are unfounded, that he should calmly accept the rent increase and reassume his role as a happy camper at your apartment community.
Oh, much to her credit, the manager may somehow persuade the resident to renew at the increased rent amount. But, unless she has managed to systematically defuse all the objection bombs, she's left with an alienated, resentful resident who returns to his higher-priced apartment as anything but a happy camper. Not good. Not good at all.
What this manager needs is a way to level the battlefield a bit. She needs a secret weapon of great power and stealth that will enable her to regain some control in these confrontations where the resident seemingly wields all the power.
Before I issue the weapon, let me briefly explain why managers always lose in the above scenario. First of all, the renewal of a lease is a very difficult form of sales presentation (no, it is not an administrative or clerical task!) and must be approached using specialized sales strategies. Why is it so difficult? Well, for starters, your resident has had a product demo that has lasted for months or years, he's had plenty of time to evaluate your ability to keep the promises you made during the initial sales presentation plus thousands of hours to dream up every conceivable reason why you should not raise his rent at renewal time.
These difficulties result in a major disruption of the flow of the renewal sales presentation, thereby making it much more difficult to re-sell the apartment to the resident at renewal time. You see, in the flow of a typical sales presentation, first, the product is discussed and demonstrated, next, objections are dealt with and then (and only then) the salesperson attempts to close the sale.
In contrast, during the renewal presentation scenario described above, when the manager mentions the amount of the rent increase, she is actually attempting to close the sale before she's had an opportunity to deal effectively with each of the resident's concerns. Her proverbial cart is squarely in front of her horse. And, as a result, her chances for success diminish greatly.
The secret weapon I promised you utilizes a type of psychological judo. It allows the manager to use the overwhelming power of the resident to flip the renewal sales presentation back into the proper order and enables her to deal with all objections, before she attempts to close the re-sale by bringing up the rent increase amount.
Here's how it works. You design what I call a "Preferred Guest Agenda" like the example provided. I recommend making the agenda resemble a restaurant menu and either laminate it or, preferably, display it in an actual menu holder. Why the menu format? Because people love menus. Now, imagine the battle scene described above, however this time around our manager is heavily-armed herself. In strides the resident, ready to begin dropping the usual objection bombs as soon as "The Number" is disclosed. After a bit of preliminary small talk, our wise manager whips out her "Preferred Guest Agenda" and hands it to the resident.
Then, the manager assures the somewhat surprised resident that she will be glad to cover all topics listed on the agenda that are of interest to the resident and will do so in any order the resident prefers. Her words are something like "This menu lists the usual topics discussed during a renewal meeting like this one. I'll be happy to cover everything you'd like to discuss on the agenda, and I'd like to start with the three or four topics that are most important to you. Why don't you pick three or four and let's get started?"
Guess which topic residents tend to mention first. Predictably, it is "What is my rent increase going to be?". Our manager writes the resident's first topic choice in her notepad, then says "O.K., what are the other three topics you want to discuss first?" As the resident makes his three additional topic choices, he will probably mention specific problems, concerns and objections he may have. Then, as each concern or objection is mentioned, our manager dutifully makes note of them.
Then she does something exceptionally cool. She looks at the list of topics the resident has chosen and, rather than falling into the trap of discussing the rent increase, she starts with the most serious objection or problem mentioned by the resident and addresses them all until every impediment to a successful lease renewal has been removed. Then, after the objection bombs have all been disarmed, she finally returns to the topic of the new rent amount and closes the re-sale.
This tactic is so remarkably effective because it enables the manager to restore the proper flow or sequence to the renewal presentation. Doing so substantially improves her chances of not only getting the renewal, but making certain the resident remains a very happy camper as well. And that is how the battle is won!
Rob Foellinger is President of MarkeTactics Consulting Group, 1-800-770-3201. He is an award-winning national speaker who has earned recognition as a marketing consultant, strategist and author as well as a master trainer in leasing, marketing and resident retention.
Rob Foellinger's Bio and list of his articles.
ComPortOne Home Page