NAA SPECIAL REPORT: How Apartment Companies Make Buying Decisions

By Keat Foong, Executive Editor

San Diego—Product and services procurement decisions are made at different company levels depending on the organizational structure of the apartment companies, said panelists at the National Apartment Association 2013 Education Conference and Exposition held in San Diego this week.

Speaking at the session “Selling to Different Ownership Entities,” speakers provided advice to products and services suppliers regarding how to successfully approach, and obtain business from, apartment companies.

As vendors enter into discussions with apartment companies, it is very important that they first understand the buying, authorization and approval structure of the company they are speaking to, said Kurt Sullivan, vice president, property management, at Douglas Allred Co. Sullivan. It is often immediately apparent during discussions whether the supplier is informed about the company he or she is approaching.

Moderator Susan E. Weston, principal of Susan Weston Co., outlined the various ownership structures that could affect the product procurement processes of the apartment company: Owner/managers, who are investor-owners; REITs, who are third-party managers; LLPS and corporations, who have institutional clients; or private owners who are involved in joint ventures. Often, finding out who to approach could be as simple as asking over the telephone or researching the website.

Speakers agreed that very often the C-suite executives do not make the buying decisions. Suppliers often assume that “if they start at the top, they are exposed to all levels of the company,” said Joe Greenblatt, president and CEO of Sunrise Management. “The reality is that I do not have time to dig into every product and service. I am probably the worst guy to speak to.”

If they have been selected by top management, Greenblatt also advised that suppliers should not “swagger into the property” with the attitude that “you have to work with me now.” “That’s brutal,” he said.

There are various reasons apartment companies do not favor a “top down” approach to product and services procurement. One reason is that there is “a lot more work on our end,” explained Melise Balastrieri, vice president, property management, of MG Properties. The top executives will have to meet with the regional manager to secure their support for the decision, obtain feedback from the site level, and incorporate that feedback into the rollout of the product. If there is “influence from the site [in the buying decision], that makes for a much easier rollout for us,” said Balastrieri.

Among the most effective ways for vendors to “get their foot in the door” is to offer free trials. Sullivan described an instance in which a cleaning services provider promised to improve results in one mall that was particularly challenging, and the contract was eventually extended to all malls in the portfolio because the service was performed so well. Balastrieri said that 30- or 60-day trials in some cases worked very well.

Balastrieri also said that email was an effective way to reach her, and that one of the most outstanding ways a supplier caught her attention was to email a point-by-point comparison of the product she was using versus the product they offered. The vendor provided a list regarding how “they do this, and [our product] does that,” she said. “First know what your potential client is using, and then understand how [your product] is better,” she advised.