The Ellis Shopping Report Performance Comparison: A Multifamily Industry Benchmark Executive Summary Third Quarter 2012
How Emotions Influence a Customer’s Decision to Rent
Welcome to Ellis’ Third Quarter 2012 Quarterly Shopping Report Performance Comparison – otherwise known as the “Ellis Benchmark”. As many of you know, the Ellis Benchmark program began in 2000 and has continued to evolve to support our vision and commitment to the growing needs of you – our customer and the multi-family industry. The focus of this quarter’s letter is “How Emotions Influence a Customer’s Decision to Rent”. But let us begin with an understanding of the market climate today.
♦ MARKET CLIMATE UPDATE
- The rental apartment vacancy rate declined to 4.6% during the third quarter from 4.7% in the second, according to Reis, a real estate research firm. That is the smallest quarterly improvement in the vacancy rate since the sector started recovering in early 2010.
- Rents increased 0.8% in the third quarter to an average of $1,090 a month, according to Reis, which tracks trends in 79 markets. That is slower than the 1.1% increase in the second quarter but strong compared with historical averages.
- As reported by the Commerce Department, housing starts rose 2.3% to a seasonally adjusted annual rate of 750,000 homes, which is lower than the 765,000 home rate economists predicted yet it is still almost 30% higher than figures in August 2011.
- The unemployment rate edged down to 7.8% in September of 2012, the U.S. Bureau of Labor Statistics reported. Employment increased in health care and in transportation and warehousing but changed little in most other major industries.
- Gallup’s U.S. underemployment, as measured without seasonal adjustment, was 16.5% in September. The September reading reflects more than a half point drop since the end of August and a nearly two point improvement from the 18.3% measured in September 2011.
♦ ELLIS QUARTERLY SHOPPING REPORT PERFORMANCE COMPARISON: A MULTIFAMILY INDUSTRY “BENCHMARK”
For years, our shopping customers continued to ask, “How do my on-site leasing professionals compare to those in similar companies?” As previously shared, we created the Ellis Shopping Report Performance Comparison in 2000 to answer that question. Known as the “Ellis Benchmark”, our quarterly report allows comparison of a company’s leasing performance to other national and regional operators. By measuring the affirmative answers to ten leading and universal performance questions common to all telephone/on-site mystery shopping reports, we rank participating companies on a weighted and equal basis.
Results of our 3rd Quarter 2012 quarterly performance comparison
♦ ELLIS BENCHMARK QUARTERLY PERFORMANCE TRENDING
The overall average in the Third Quarter 2012 was 91% based on 4,031 shops. The high company average remained the same as compared to a year ago, while the low company average increased by 3%. The top five finishers this quarter had an impressive average score of 97.3%, an indicator that performance remains strong and consistent.
The Ellis Shopping Report Performance Comparison: Third Quarter 2012
♦ TOP-RANKED PARTICIPATING COMPANIES
1st Place – Western National Property Management – 99% (4.81 standard deviation)
“Care. Compassion. Accountability. Those words are the Western National mantra and are exhibited each and every day we come together as a team. Congratulations to the Team Who Cares…I am so proud of all of you!”
–Laura Khouri, President
2nd Place – Legacy Partners – 97% (7.16 standard deviation)
“It has been Legacy Partners’ goal for over 4 decades to provide the best service to our clients and residents. At Legacy Partners, we choose team members that exemplify this goal. I would like to congratulate all of our teams for their hard work to assure Legacy Partners’ placement in the Benchmark.”
–Andrew Littorno, Marketing and Training Director
3rd Place – Gables Residential Services – 97% (7.64 standard deviation)
“The commitment throughout the entire company to have the best sales team in the industry is certainly reflected in our continued Top 5 success. I am proud to be part of a team that consistently performs above and beyond. Congratulations to our associates; you should be very proud of your continued outstanding performance.”
–Jennifer Antos, Vice President, Learning & Development
4th Place – Carmel Partners – 97% (8.03 standard deviation)
“To stay in the Top 5 consistently takes an extreme amount of focus, commitment and attention to the details. We congratulate all of our associates who have so diligently taken it upon themselves to achieve such a high score. This is truly a team accomplishment and we can all share in the results with great pride. We look forward to maintaining this benchmark of performance and continuing to improve on those small areas of opportunity just like a world class athlete would continue to hone their skills. Well done and many thanks!”
–Parke Pettegrew, Vice President – Training and Compliance
5th Place – Windsor Property Management Company / GID – 96% (8.04 standard deviation)
“Windsor is so excited about ranking in the Ellis Top 5! Our associates have been working hard and are focusing on raising the level of not only customer service, but customer satisfaction. The teams are committed to going the extra mile, and the company is committed to providing the teams with the resources they need to succeed. This is an outstanding achievement and we are proud of all of our dedicated associates – congratulations!”
–Melanie O’Brien, Vice President of Training
♦ PERFORMANCE IMPROVEMENT TOPIC: HOW EMOTIONS INFLUENCE A CUSTOMER’S DECISION TO RENT
When searching for an apartment, today’s customers often turn to online resources and their social networks to collect information. A survey conducted by The Nielsen Company1 revealed that consumers rely greatly on the reviews of their peers when making purchasing decisions, with nearly 60% of online shoppers saying they consulted reviews prior to purchasing and 40% claiming that they would not even purchase without seeking reviews about the product online first. These are powerful numbers!
The apartment search is influenced by and deeply rooted in emotions. While your potential residents might follow their heart, conduct all their mental research, and go with their gut on the final decision, at the final hour they can be thrown off by a negative customer experience or a negative review from their social network. The fact is that the ball is always moving, and the process of searching for an apartment can leave apartment seekers confused and sometimes heavy hearted.
CONSIDER THESE…
The Memorable First Experience2
We all know that you never get a second chance to make a first impression. When it comes to your potential residents you can bet that if you make a great impression, they will be more likely to lease with you over your competitor.
The challenge for companies today is to be aware of their presence and where first impressions can take place. Your future residents are connecting with you on the internet (home, work, mobile), the telephone, email, texting, and face-to-face. Potential residents you have never met are forming opinions about your community at the click of a mouse via your online presence and these other areas. Their opinions determine how their friends and family form a first impression of your community too. Scary! Their expectations and how they form their opinions differ in each area.
- Face-to-face. When it comes to face-to-face, 93% of how you are judged is based on non-verbal cues, your appearance and body language. Only 7% is influenced by the words that you speak.
- Telephone. 70% of how you are perceived is based on your tone of voice and 30% on your words.
- Online. The look of your homepage, how often your community appears in a web browser, and what they find on social media on you all impact the experience. Yes, you are constantly being judged online. Even your findability online can be a factor and a point of frustration. The key is to be proactive and go where they go, read what they read, and experience what they experience.
- It is important to understand the impact that all three areas have on the customer’s first impression of your community. A business relationship starts or ends with the very first impression.
The Relationship Comes Before the Sale3
There is a big difference between a customer leasing an apartment from you and you leasing an apartment to them. Today, the whole concept of “selling” needs to be approached in a different way. The first decision a customer makes is about the person, not the apartment, and let us face it, consumers are suspicious. If you aggressively try to lease them an apartment, they will resist. The more a customer understands who you are, what you do, and how you can help them, the more they will trust you. Building relationships with customers can result in a slew of ambassadors; they begin leasing from you and so do their friends and family.
Today’s potential resident wants a sincere, friendly, credible, and passionate leasing professional on their side – someone who cares more about others’ needs than their leasing bonus. Your current and future residents can be your greatest marketing tools. When the relationship comes before the sale, your customers often do the best word of mouth marketing job and for free.
ALL Touch Points Matter4
The customer experience encompasses every touch point that a future resident may encounter. This can create quite a challenge for companies because there are many communication channels that can impact the experience. Consistent messaging across all channels and touch points is integral to successful customer experience and vital to company success. When a person drives by your community, visits your website, views a YouTube video, receives a reply via email, visits you in person, etc., they should be having a seamless experience. The look and feel, message, pricing, and the voice of the company should be consistent. Consistent customer experiences do not happen by chance; they are deliberate!
- Reduce Employee Turnover. Training is one of the most cost effective ways to ensure consistent customer experiences and reduce employee turnover. Investing in employees is not only securing their individual success but also investing in the long term success of your company. Tenured employees are familiar with all of the touch points, what customers are saying and how their community is perceived – at least we hope they are. High employee turnover at a community can have a negative impact on customer experience.
- Survey Your Current and Future Residents. You can monitor customer behavior and garner target audience sentiment by using survey systems, asking residents directly for feedback, and monitoring review sites. The key to acquiring useful feedback is to solicit customer responses on each individual communication channel, then respond and take action. Afraid of negative feedback? A Harris5 survey concluded that if companies address negative reviews and feedback head on, the customer often deletes the negative review AND sometimes even posts a positive one! Of the customers who received a response from a company after posting negative feedback about their shopping experience, 33% turned around and posted a positive review and 34% deleted the original negative review.
At the end of the day, creating a great memorable first impression, building relationships, and creating a consistent customer experience across all channels, can positively feed into a customer’s emotions and assist them in the decision process. The team at Ellis and the strategic partnership with Renter’s Voice quickly identify for our customers the opportunities that impact the overall customer experience.
Great Customer Service
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Great Customer Experience
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Great Product
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Great Organic WORD OF MOUTH Marketing
We thank you for your participation and feedback, which help make this report informative and a reliable resource. We hope you will find Ellis, Partners in Management Solutions to be not only the finest source for mystery shopping, resident surveys, and ratings and reviews, but also a training resource for your organization. Additional support and information can be found on our website, www.epmsoldsite.wpengine.com.
Joanna Ellis, CAPS
Chief Executive Officer