Improving the Multifamily Demand Funnel
Working the renter journey can be the key to more efficient conversions, higher occupancies, optimal rent growth and ultimately greater NOI.
By Morgan Dzak
The demand funnel, also known as the marketing funnel, can be a difficult concept to apply to strategic marketing efforts in the multifamily industry. But as challenging as it may be, mastery of the demand funnel and its intricacies can be the difference between proactive marketing efforts and blindly allocating advertising resources.
The easiest way to digest the demand funnel is by visualizing it as an upside down triangle: the top portion, the largest section, is the point at which marketers would advertise for a broad audience in the early stages of an apartment search, e.g. the Google search. Down the triangle toward the narrow tip is the point at which the prospective renter is ready to sign a lease. Everything in between the two points is where the renter should be engaged and nurtured toward signing a lease. The demand funnel is a system of different marketing avenues that exists within that upside down triangle. The avenues guide to either more qualified prospect leads, or to a dead end. Working the demand funnel and renter journey can be the key to more efficient conversions, higher occupancies, optimal rent growth, and ultimately greater NOI.
Here are a few best practices multifamily marketing teams can implement to measure marketing efforts more efficiently, and calculate the effectiveness of each source:
Understand where each source fits
Lead attribution reporting from vendors can either help or hurt the accuracy of your lead data. Unfortunately, most of the industry looks at that lead attribution and investment from a single-touch attribution standpoint versus multi-touch attribution. Single-touch doesn’t tell the entire story.
It’s important to capture those insights to dissect the point in the funnel where each source comes into play, and how much it’s driving prospects to take the next step in the apartment search to seek human interaction for more information. But we have to be careful not to come to false conclusions during this analysis. It would be easy to look at the number of leads attributed to each source and cut the under performing sources. But the demand funnel teaches us that even sources that seem to be ineffective in generating leads could play a vital role. Understanding the path to conversion is crucial in measuring source effectiveness. That’s why multi-touch attribution is so important.
“Examining the entire customer journey is essential to understanding the demand funnel,” said Cassie Khaing, senior brand manager at Mill Creek. “While it’s important to see where the lead was attributed to, based on first or last click, it is also important to delve into the combination of your property management data, and analytics to back track on that customer journey to determine which other factors played into the final decision to sign a lease.”
Tailor content based on prospects
If you can track the steps prospects are taking to get more information and identify where they fall out of the demand funnel, marketers can make adjustments to custom-tailor content to reach and engage the prospect, keeping them in the funnel longer.
“Since we have the ability to dial in to what the prospect connects with, we can effectively tailor all our marketing content, how copy is written, how photos are organized, to form that bond with the prospect,” said Morgan Porter, director of digital marketing at LMC.
Through web analytics and lead management programs, marketers have the ability to gain insight into what the prospect thinks. By distinguishing which types of content the prospect is engaging with—website copy, photos, videos, external links— and on which types of platforms—Google, ApartmentRatings.com, Facebook, Instagram—marketers have a better idea of how prospects initially find the community, and which content drives them to reach out to a leasing associate for more information.
Analytical data helps marketers understand where conversions are happening in the marketing and advertising channels. Knowledge of how prospects are engaging with your brand helps create that bond because of understanding.
Utilizing data research and observing who is renting your homes is an essential step to take before you actually start analyzing qualified leads.
“By evaluating our marketing data and partnering with a member of the operations team, we can compare our marketing data with trends they may be seeing at a community and market level,” Khaing said. “Sometimes they may see demand trends that may not yet have materialized in the data. I can utilize that additional knowledge to help drive qualified leads for specific apartment homes. Understanding the data helps me know where to drive sources and which sources to tweak to get those leads.”
Through cross-department communication, you are increasing your ability to achieve long-term, sustainable growth and remain competitive.
Implement lead management
These systems help to actively manage your funnel by tracking a community’s leads from their marketing source, through all stages of the sales cycle, to final conversion. More importantly, the powerful data provides insight into lead velocity, lead quality and conversion fallout and what marketing sources are most effective. Data-driven lead management enables true lead prioritization, based on critical variables like likelihood to close, and whether or not the floor plan preferences most align with upcoming vacancies.
“Not all leads are created equal,” said Dom Beveridge, executive vice president of demand generation for Rainmaker. “Associates need to ask the right questions when engaging with prospects. By doing so, they can prioritize their leads correctly, targeting the ones with the highest likelihood of conversion. Budgeting your marketing spends becomes easier because you’ve identified the sources that produce qualified leads likely to convert into residents.”
Lead prioritization empowers onsite staff to drive conversions. It can boost onsite leasing performance, advertising effectiveness and closing rates which translates into revenue.
View investments as long-term gains
Utilizing the demand funnel to drive budget is more than just looking at immediate ROI. Utilization of the demand funnel to track the renter journey and distribute budget finances will be more of a long-term benefit, than one with sudden results.
“You may have to look at your investments in the framework of a three-year sprint,” said Jennifer Anderson, director of B2B marketing at RentPath. “In year one, you have an initial investment, and the return will be relatively low as you build momentum. In year two, you begin to see that balance out a little more, and, in year three, you should not only start to see your investment pay off, but you shouldn’t have to invest as much in technology or marketing.”
The demand funnel helps multifamily marketers focus on how to get ahead of renter changes and variances in the landscape, as opposed to react to them.
Morgan Dzak is a content writer for LinnellTaylor Marketing, a Denver-based public relations agency.