AIM Special Report: Building Renter Trust
Today’s renters are experienced online shoppers. So they expect to find all the information they need up front.
Although legislation has increased surrounding fee transparency, a significant number of renters don’t feel like they’re receiving enough pricing information. Yet in today’s world of online shopping, when consumers are accustomed to getting all the details they need upfront, pricing’s what they most want to know about.
During the panel “Criticism to Credibility: Building Renter Trust Through Transparency” at this year’s Apartment Innovation and Marketing Conference, Carla Alicea, director of research and performance at SatisFacts, and Laurel Zacher, founder & CEO of LZ Strategic, discussed the ramifications for resident conversion and retention, along with preferred sources of information on apartment availability and desirability.
A SatisFacts study of 60 renters selected randomly among those who had searched for an apartment in the past three years, rented at a community with 50 or more units and found the total price to be different than advertised, a surprisingly large number did not learn the total monthly leasing price until late in the process, Alicea noted. While the largest percentage found out after touring the community, 18 percent got the complete pricing information after submitting their application, and more than a third didn’t realize the full cost before signing the lease: 27 percent while signing and 7 percent after moving in.
READ MORE FROM THE EVENT: AIM 2025 Conference Coverage
Yet for two-thirds of participants the additional cost was more than $100 a month, with a range of $20 to $450 and the average at $160 (this does not include optional fees, which are less critical to advertise). “There’s an opportunity here,” she observed, and it can impact the relationship you have with your renters. “The later they find out about the fees, the less trust they have and the angrier they are.”
The result, she said, was that in 60 percent of cases the prospect began the process but couldn’t afford to close the deal even though they loved the unit—meaning time wasted with a large number of unqualified prospects. Another 43 percent of the time they went ahead and signed but knew going in they wouldn’t be able to renew. And in only 10 percent of cases they had no surprises and felt comfortable with their decision, making them good prospects for renewal (percentages total more than 100 because respondents looked at multiple possibilities).
The disadvantage is even greater if your competitors are providing full pricing transparency up front and you’re not, Zacher said. It also makes it more difficult for you to compare your performance against theirs. “They’re forcing us to do it, but we should do it,” she observed.
Star power
Signing prospects that move in with a bad taste already in their mouth is not going to help your reputation, either. And Internet shopping means reviews count for a lot these days. In fact, prospects are likely to put more emphasis on what’s been written about your community than the number of stars you average. Specifically, Alicea said, they filter for most recent and negative reviews.
A negative review is still salvageable if you respond to it appropriately, since prospects are more likely to believe your professional response than the review itself. For that reason, you should remain public in how you address it rather than taking the discussion offline. And be sure to include at least one source that’s a verified reviewer, since that carries weight, too.
Too many positive reviews raises suspicions, too, so review gating or use of review suppression is ill advised, Alicea said. In fact, in its most recent biennial study of 4,833 renters, SatisFacts found that 22 percent of renters termed reviews inflated relative to their own experience at the community. That doesn’t mean you shouldn’t encourage residents to submit their positive reviews, just don’t eliminate the negative ones. And educate the positive reviewers to tell more of a story, with a minimum of three sentences on each topic, Alicea advised.
While improving service and quality is the best way to meet expectations, it’s unreasonable to strive for a five-star rating. The minimum rating to attract renters is 3.82, Alicea said, while 4.5 stars or more can raise expectations beyond a maintainable level—not to mention the cost of delivering it. A 3.82 will in many instances create less friction, Zacher said. On the other hand, if your rating average drops below 2.5 stars, it’s a strong sign you need to adjust the quality of service you’re providing.
