The Great Giveaway
Soft markets come and go in this industry. In 26 years I've seen 4 or 5. The market we're suffering now is definitely the worst one. We know all of the reasons. We ask "where have all the residents gone and what can we do?" We remember that when the market was strong it felt like one million people looking for an apartment among the one thousand vacancies. That's a bit of an exaggeration of course, but that's what we remember.
Today it seems like there are one thousand people looking at our one million apartment inventory. The old law of supply and demand has us at it's mercy. Bankruptcies and foreclosures fill the news.
So what do we do? We're all seeking the magic answer. Each of us wants our share of the market. Quite frankly, we'd each like more than our share. But before we begin planning our strategies, we've got to remember what happened in the early 1970's when owners and managers panicked.
"There must be something wrong with our staffs," they cried. "Let's not try to train them to do better: let's fire them and start over. Let's hire used car salesmen and naked dancing girls to lease these vacancies. Let's give away color televisions, bicycles built for two, trips to Mexico, and two months free rent without a deposit. We won't even check their credit."
The end result of these great giveaways was that transients made a great living by moving around. With each move they made to a "two months free rent" apartment, they took televisions and bicycles. Plus, they spent lots of time in Acapulco.
Owners and managers sadly learned that doing a turnaround, leasing it free for two months, then doing the turnaround again, plus the expense of the giveaways, not only did nothing to aid the vacancy problem, but made it much more expensive.
Fortunately, many of those who were active in the industry in the early 1970's are much wiser from the bad experience. Those who weren't in the market at that time should talk to the "old timers" and learn about the problems encountered with the "let's make a deal" programs in the past.
Banners and ads stating "Two months free rent, no deposit, free ceiling fans, washer/dryers, trips and automobiles" actually scream "We are in trouble! We have a lot of vacancies." We don't have to tell the consumers that fact, they know it! They know to the extent that they walk in our office asking, "What are you giving away?" "What's your special?"
Just what is your answer to that question and to the challenges facing our industry today?
Examine the facts. Many a survey has shown that one of the major reasons people move is poor service and discourteous employees. The smallest incentive will move them if they are not totally happy where they are right now. Our employees must be fine tuned as never before if we wish to retain our current residents and lease to qualified prospects who enter our office.
If concessions are to be made, consider making them quietly and within the confines of your office. It works because the clientele you want in your communities want to play on a winning team, not one that displays a "We're in trouble" sign in the front window.
No, your advertising doesn't have to say "something free" to secure phone calls and traffic. A good ad will bring calls and traffic anyway. When they ask you what you're giving away, you'd better hope it is something far better and more exciting, or more profitable to your prospect, than what's being given away down the street.
If you're not openly offering a giveaway, then your answer will just have to be: "What we have to offer is only the finest apartment community in which you could possibly live. One where service can be counted on from caring and concerned personnel. One where you can be proud to live for years to come. And, most of all, one where you won't have temporary transient neighbors who moved here because they were desperate for a couple months free rent!
one of Multi-housing's foremost marketing and motivational speakers.
Questions or Comments? Email ComPortOne