Resident Retention: The Good/Bad and the Social Media Factor!
Lee Resource Inc. found that for every customer complaint, there are 26 other customers who have remained silent. But silence is not golden! When you consider that customers who are not talking to you are most likely talking about you across multiple communities on the Internet and it’s apparent how important proactively pursuing customer thought and opinion are to your business.
“Lee Resource Inc. found that for every customer complaint, there are 26 other customers who have remained silent.”
Your customer’s experience is the sum total of every interaction they have with you, whether in person, by phone, or over the Internet. As there has been a push in recent years to examine customer buying behavior, a strong correlation was found between customer purchasing decisions and how delighted they were with their provider. 86% of consumers quit doing business with a company because of a bad customer experience (Harris Interactive).
For the multifamily industry, resident retention is a vital aspect of profitability. Make ready costs are extensive when units turn over, so to keep a resident in their home offers extensive savings. According to Peppers and Rogers, 81% of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition.
But how do we manage the processes of resident retention?
It starts with communicating with the customer – and we’re not talking about a generic newsletter or that 90-day notice of an impending rent increase. Sure, one way communication is necessary, but it’s real dialogue – receiving valuable feedback from the customer – that leads to productive paths for increasing the likelihood that resident will stay at your community for a very long time.
Nobody likes moving – albeit sometimes a move is necessary and the reason is beyond our control. That means it’s a practical impossibility to expect a resident retention rate of 100%. You can’t grow resident retention rates overnight or exponentially in a matter of a typical lease cycle. But you can find areas of opportunity at the property level that marginally over time will improve profitability.
“42% of companies who embark on a mission of creating a great customer experience do so in order to increase customer retention.”
Every customer-facing employee makes a difference in how your customer perceives their experience at your community. Do you ask new residents about their move-in experience after they have had a little time to get settled? If they experience a maintenance problem, do you follow up by inquiring as to their opinion of the interaction? 42% of companies who embark on a mission of creating a great customer experience do so in order to increase customer retention.
You have to start somewhere by finding out how your customer feels about you – are you meeting their needs, providing a high value, and offering excellent service? Would they recommend your community to someone they know? Once you gather specific data about encounters with your staff and service team, identify which experiences have the highest correlation to their buying decision – whether they plan to renew their lease or not! – then you can define the areas to be addressed that will make the biggest impact to your bottom line.
Social media is now a way of life; it can work for or against you and like it or not, the bottom line is your profitability capacity will be measured by your ability to effectively extract and manage feedback from your customers.
With the Ellis Partners Resident Feedback Survey program, we help property management companies seek out and listen to the Voice of the Customer; analyze strongest points of correlation to lease renewal; and outline plans of action to increase retention, because greater lease renewal rate leads to higher total customer lifetime value and profits.