Many can agree that customer loyalty is the cornerstone of a successful business. Depending on the industry of interest, acquiring a new customer can cost a company five to 25 times more than retaining an existing one. Furthermore, according to research done by Frederick Reichheld of Bain & Company, increasing customer retention rates by 5 percent increases profits by 25–95 percent.
In multifamily, we see it all the time: Improving the overall resident satisfaction leads to a longer customer life cycle, which contributes to lower turnover costs and inevitably adds to the bottom line.
As we move into the ninth year of the current real estate expansion cycle, however, many are now asking, “How much longer will it last? When will it end? Will history repeat itself?”
While experts debate the timeline and odds of a recession, our industry is riding high on growth. To better prepare for the next chapter of multifamily, the satisfaction of residents and overall customer loyalty should be rising to the top of the priority list.
While customer satisfaction is always important and a metric for ultimate long-term success in a community, it often goes unchecked when occupancy is still high, properties are stabilized and investors are seeing ROI. Today, property managers now run the risk of leaving money on the table when resident satisfaction dips due to operational deficiencies.
Think about it this way: As daily consumers, we often willingly pay more for a product or service when there is credibility or value attached to it. With credibility comes higher levels of trust and satisfaction. The same logic applies for communities. Residents are willing to stay put and perhaps pay a little bit more if credibility, trust and value are established both up front and during the lifecycle of the customer experience. The question then becomes, “how do we continue to build value in our communities?”
Reviews are not only the secret ingredient for online to onsite reputation management but are the key to building value, ensuring customer satisfaction and buffering your bottom line. Here’s why:
UNFILTERED INSIGHT + A DIRECT LINE OF COMMUNICATION TO CUSTOMERS
Everywhere we turn, companies are asking for feedback. As a result, we are all experiencing review fatigue. What’s the thinking behind the text, email and notification overload? It’s simple. The ROI on customer feedback is a treasure trove for companies as credible word-of-mouth advertising is a top source for revenue generation. According to the Harvard Business Review and Nielsen, nine in 10 buying decisions are made with peer recommendations and 92 percent of buyers trust referrals from people they know.
One could logically assume if customers are unhappy, then revenue suffers. BONUS: Besides buffering your bottom line, reviews can also boost your website’s SEO. Fresh content, such as a new user review, is always solid fodder for search engines.
UNDERSTANDING THREATS AND OPPORTUNITIES
Algorithms and ROI aside, property management professionals are in the business of caring for and managing the homes of countless individuals. We spend our time, talent and energy providing housing experiences that are both safe and enjoyable for residents.
As social media has become the chief source of online reviews, it is difficult for property managers to tackle the sheer number of reviews with multiple platforms since each market and property poses unique challenges. For example, over the last 12 months, the Fogelman Properties portfolio has received nearly 4,000 unique reviews. Many may wonder how we can possibly digest all the feedback presented in user reviews? Much less, how do we create an action plan to implement changes or address challenges?
In 2018, our team at Fogelman consolidated platforms and rolled out online reputation management services. We now streamline client reporting, post localized content and proactively listen and respond to customer feedback with the help of a centralized, social media, reputation and ad management marketing platform.
With the help of such tools and technology, reputation and social media managers can now dive deep into both the positive and negative keywords that customers are consistently using in their reviews. A sentiment analysis report then becomes an opportunity for marketers and operations to collaborate and implement changes that truly impact overall satisfaction. Sure, one resident complaining could be written off, but trends should never be ignored. Alternatively, with positive feedback, sentiment analysis now gives marketers a chance to highlight community strengths and message around opportunities.
The ability to compare community approval ratings to nearby competitors and dig into the content of resident reviews has also given us the opportunity to further enhance our individual approval ratings. For example, seeing an influx of reviews on bug or pest control helps us relay information to the onsite team, schedule services and then message about the professional services we provide.
Data is also used for planning capital community improvements or allocating future budgets. For example, teams can now make informed, data-driven decisions based on what customers are requesting with enhancements and in turn add value to assets. Backing up “wish list” projects with sentiment analysis data is music to the ears of clients and owners.
If customer loyalty is the endgame, then trust, value and credibility are the first play. Bottom line: If we aren’t listening to our customers, someone else will.
Jeremy Lawson is reputation manager for Fogelman Properties, a privately- owned multifamily investment and property management company.