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Dec. 4, 2012

Critical Ingredient

By Keat Foong, Executive Editor 

What strategies are the most effective in retaining residents? MHN interviewed some of the leading property management companies and found that there is no way to avoid having to furnish good old fashioned “block and tackle” (great customer service) if managers want to maximize the number of residents who decide to renew their leases. Making sure residents don’t move out of the community requires work—there’s no way around that.If superlative customer service is the key to great resident retention, apartment managers affirm that such service consists of providing: a warm welcome, friendly and caring attention, speedy maintenance request responses, conscientious follow-up, and a great sense of belonging for residents. These are some of the specific tried-and-true apartment customer service actions that remain indispensable.All the same, it is important also to realize the mindset that underlies the emphasis on service. “What strategies work is probably the third question, not the first or second. The first question should be: Are the owner and manager 100 percent committed to customer satisfaction?” says Jonathan Holtzman, chairman and CEO of Village Green Cos. There is a direct correlation between customer satisfaction and a low turnover rate, comments Holtzman. There is no question, he says, that consumer research firms in the apartment industry will agree that the level of customer satisfaction plays a major part in determining whether the resident stays put or moves out.

Holtzman takes some of his lessons in delivering good customer service from well-run companies in the hospitality business—organizations like Southwest Airlines, Lexus, Disney and Four Seasons hotels. In fact, Holtzman says he considers the apartment business today a hospitality business.

The “customer is right,” he adds. For example, in restaurants, if a meal is not cooked correctly, it is sent back. And if a hotel room is not suitable, another one is substituted. “Residents should be treated as they are in the hospitality business.”

Deliver personal attention 

One of the key components of great customer service is personal attention—direct contact supplied by staff members. One way to shower personal attention on residents is to reach out to them personally on a regular basis even if the resident has no need to approach the management office. “Throughout the lease term, it is critical to keep in touch,” and not just 30 days before lease renewal, says Heidi Jehlicka, marketing director of Dominium. The onsite staff needs to leave voice messages for the resident saying, “Hi, I am the property manager. Please let me know if there is anything you need. If your work orders are not done to your satisfaction, please call me.” In fact, “this call needs to happen at least three times in a 12 month lease,” says Jehlicka.

Every property manager knows that quick response time—within a day for maintenance work orders—plays a central role in avoiding situations in which the resident moves out as a result of lack of satisfaction. However, follow-up is another critical way that personal attention and superlative customer service are delivered. The completion of maintenance work orders always requires follow-up by the staff to ensure satisfaction, whether by a call or a visit, notes Julie Manthey, vice president of operations at Western National Property Management. According to Manthey, such actions are critical in retaining residents. Staff follow up is key to achieving good resident retention numbers, agrees Jehlicka.

A sense of belonging

Another major component of any resident retention strategy is to create a sense of community for residents. Property managers try to cultivate opportunities for the development of friendships in the community, as residents tend to stay longer in apartment properties in which they have established relationships. Establishing opportunities for residents to develop friendships is so central to resident retention that Holtzman regards it as second in importance only to a commitment to customer satisfaction. “If the apartment property becomes a community, the renter has a higher likelihood of renewing the lease,” says Holtzman.

Surveys show that residents are 30 percent more likely to renew in a community in which they know someone, says Manthey. And Holtzman adds that research reveals that a majority of young people would rather take a lower-quality apartment community or location if they can live with their friends. To create a sense of community, Village Green designates an outgoing, sociable resident who is already living in a community as an organizer and promoter of community events. In return, they receive discounted or free rent. In a similar project, Western National is currently testing a service supplied by Apartment Life called CARES, which brings teams of married couples, families or single adults to apartment properties to “build community and serve residents.” Members of the CARES team live in an apartment for free and organize monthly social functions, such as cooking classes, movie nights or fundraising events, and interact with the residents. The events create a sense of following, comments  Manthey, allowing the residents to get to know their neighbors and make friends. The program allows residents to “establish friendships at the communities so they feel they are a part of it,” says Manthey.

The impeccable welcome

One point experienced property managers know is easily overlooked is that resident retention begins from day one. “From our experience being in the business for a number of years, resident retention starts from the time the resident walks in the door and moves in. It does not begin half way into the lease. It is generally in the first 30 days that people make up their minds whether to renew or not,” says Western National’s Manthey. “Ultimately, the team needs to focus from the beginning in meeting the needs of the resident, not after the resident moves in.”

“From the time someone decides you are the place they want to call home, resident retention starts then and there,” agrees Dominium’s Jehlicka. Great customer service delivery at the time of move-in consists of several actions. For example, the resident manager, assistant manager and a member of the maintenance team need to greet and introduce themselves to the resident at that time. At Dominium, the on-site manager will personally walk through the move-in checklist with the resident to examine the quality of the apartment make-ready, says Jehlicka. The maintenance technician also should make an initial Day One contact.

The property staff should walk the new resident through the entire move-in process, agrees Manthey. Often, the person who moves them in is the person the resident most remembers, Manthey points out. Additionally, it is vital that the baton is passed from the leasing agent to the property manager or assistant manager once the resident has moved in. “It is important that the assistant manager or property manager is also involved in the welcome, and not just the leasing agent,” says Manthey.

Quality of the community 

Not least, whether the resident likes the apartment property will also factor into his or her decision to move out or stay. The community cannot change its location and its overall building structure, but there are other aspects about the community, especially in amenities, that fall under the powers of the management company or property owner to modify.

For Holtzman, the third-most effective resident  retention strategy is to consistently improve the apartment community and unit based on the resident’s desires. “When they renew their lease, it has to be like renting the apartment to them all over again. If there are things in the apartment that they want, you give it to them,” says Holtzman. “If in the common area you have PCs and they want Apple, you give it to them. If they want treadmills in the fitness center, you give it to them.”

For Holtzman, the resident manager—not the leasing agent, not the assistant manager—should meet with renters at lease renewal, at either the apartment or business office. The manager then discusses with the residents what they like and do not like about the apartment community. Providing carpet shampooing, wood floors and fireplace mantles are all worthwhile, considering the rent could be worth $24,000 over two years, Holtzman suggests.

“Everyone expects good [service],” Jehlicka says. “If we do not deliver great customer service, we will not succeed in this business or any other business.”

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