Emeryville, Calif.–A property can see a significant increase in its revenue by outsourcing its call center and capturing more resident leads in the process. If this sounds like common sense to you, you might be part of a minority in the multifamily sector.
“It is definitely not common industry thought that a call center will lead to revenue increases,” Steve Lefkovits, operator of MultifamilyRevenue.com, and President of Joshua Tree which sponsors the website, tells MHN. “When more people come in as leads, there is a bigger pool to choose from and increasing rent is possible. It is a numbers game,” he says. Lefkovits also authored the recently released white paper documenting Archstone’s nine-month, 40-community test, which evaluated its multifamily revenue management. The test used The Rainmaker Group’s LRO (“LRO”) lease rent optimization system and professional prospect guest card creation utilizing Level One’s Central Leasing Office.
The results of the study showed that Archstone’s communities that used Level One’s call center and automated lease rate optimization from LRO generated 1.5 percent more revenue than test communities relying on self-management of inbound phone call leads.
“Archstone’s test of professional lead handling and guest card creation proved that increased lead volume can drive higher revenue per unit, even in a soft or declining market,” says Lefkovits. ”Archstone’s 1.5 percent revenue boost resulted from harvesting new leads from existing marketing sources and automatically feeding that prospect traffic to the LRO system. LRO moved rents in response to demand, increasing revenue per unit in the test properties.”
Lefkovits estimates that on a “typical” property, this kind of result would equate to an incremental $45,000 – $67,500 in annual net operating income. The Archstone trial compared 20 test properties with 7,200 units using Level One’s call center against an equal number of properties in a control group that did not use the call center Level One answered the phone 98-99 percent of the time, versus 50-60 percent of the time at the control properties.
Additional guest cards were captured, effectively increasing demand for the properties. LRO set rental rates based on scientific demand analysis in both the test and control groups. The 1.5 percent revenue increase in the test group was validated by an independent international consulting firm.
“The revenue increase was not from increased occupancy, it was from real-time visibility into the new, higher demand,” Lefkovits explains. It’s exciting that even a sophisticated company like Archstone can increase prospect leads and income by having 98-99 percent of their inbound sales calls answered.”
“There are several big property mananement firms that have separate call centers to handle rental leads, but the key is to use the calls as data to analyze demand,” says Lefkovits. “What’s new is also that this is the first time anyone has studied this so extensively.”