There are a lot of reasons why I’ve chosen to rent as the same place for almost 2 years now. But one of the biggest reasons is mutual trust. I know I can count on management and vice versa. They’ve obtained my loyalty and I’ve continued to extend my lease.
Customer loyalty holds huge potential value for apartment communities. With average customer turnover estimated around 55 to 62% in our industry, according to Jen Piccotti with SatisFacts Research, resident retention and renewals are a substantial profitability factor.
Loyalty happens when a customer chooses your product over another for reasons other than market demand (i.e. price and availability). But here’s the challenge: Technology makes it easier than ever for people to research alternatives. If things go sour with my current management, in less than a minute I can pull up pages upon pages of new housing options within the same 12-mile radius.
So how do we overcome some of the fickle unrest that arises from the increased volume and availability of online information? In terms of cultivating customer loyalty, I see three main avenues:
1. Tangible Rewards: Who can begin to count the overwhelming abundance of retail membership and punch cards that occupy our wallets? That’s a loyalty that’s expressly provided in exchange for tangible rewards, such as discounts and prizes. In the multifamily industry, this could be lease renewal incentives, or even referral bonuses. There isn’t anything inherently wrong with this method of customer loyalty. People like it, and it works. But it only goes so far as concrete rewards and promos it employs. You’re essentially buying your residents loyalty, so don’t expect their sentiments to be either authentic or enduring.
2. Engagement: At the opposite side of our spectrum of authenticity is loyalty that’s born from the experience you provide. You engage your customer with a unique experience, and they self-identify with your product, attaching themselves to your identity to some extent. Clothing brands do this. Coffee shops do this. Even charities and nonprofits do this if they’re smart. If your community has managed to forge and establish any sort of unique appeal or vibe … “pet-friendly” … “affluent” … “family-centered” … “green” … then it’s possible your residents harbor a loyalty to the community because they’re engaged with the environment you create and image you portray.
Side note: At the intersection of rewards and engagement, you’ll find gamification—the use of virtual points and ranking systems to drive user behavior. Some in the industry have brought this concept to their resident portals to encourage online engagement.
3. Trust: Even if apartment communities are unable to accomplish that self-identifying experience and engagement among residents, every property has the opportunity to create trust, and in turn, loyalty. Peoples’ homes are inherently personal, so you can imagine our impact in supplying housing that is stable, safe, dependable, and predictable. As I said earlier, that’s one of the big reasons I continue to renew. There’s a comfort and familiarity there. But with any community, this is heavily dependent on maintaining service levels. Service details can be tedious and messy, but it can be the difference between a loyal renewal or sudden move-out.