Tuesday, March 31, 2009

The Price is Right...or Is It?

Rock bottom pricing. Lower prices. Going out of business. 4 months free. Buy one - get one free. Big discounts. Bargains galore. All signs I have physically seen in the last 24 hours.
Question is, are any of them working? How do we competitively price product in a market like this? Should we be fighting for every penny or slashing rates? Steering a smooth course can be challenging at best.

Some things to consider when establishing price points at your community/portfolio:

Should you lower the price? Do you want to be seen as a discounter?
Consumers don’t care what your “real” price is. The price and the value is what they write the check for. Period. Lowering your price could threaten your brand value, as discounted brands are assumed to be lower in quality. In addition, current residents, your most valued customers, may find themselves paying more for their apartments than an individual walking in off the street. They will resent you, and explore other options, unless an equally competitive offer is made to them to stay. If, for example, the client received one month free at move in, but the current concession is two months, it would make sense to at least offer an additional month free. From the client’s perspective, that is only fair – particularly as they are being wooed by the concession down the street.

Look at your product from your target market’s point of view.
Do a thorough and physical, competition assessment. (Sorry, but the market survey is not going to tell you what you need to know. People pay for and determine value based on the experience received. What kind of experience is being offered at the competitor capturing the leases you should have? Get out and find out.) How are they really pricing their product? Is there a sense of urgency to buy? Is the discount on specific floor plans or an all? Look at it from the consumer’s standpoint – who is offering the best value from their perspective?

Can you prove you are a better value?
Are you better than your competition? Really? If so, how, and how can you tangibly share this with the consumer to build product value? You cannot, for example, say, “We have the best service of all our competitors.” How do you know? Not to mention, everybody says that. You have to prove it. Show the client stats and resident testimonials and be sure to introduce them to other members of the team. Prominently display a resident events calendar in the lobby. Find some residents that would be willing to share their positive experiences and turn the client on to them. Prove it.

Are you panicking?
Exposure is creeping up and conversion rates are down. The end of the month is approaching. Before slashing prices and yelling, “The sky is falling!” do a marketing and traffic assessment. Are you getting enough traffic? Is the product primo? What are they looking for? Is follow up that is relevant to the consumer being consistently executed?

People care about price, but they also care about savings.
Show renters how your community will help them weather the recession. If, for example, you have a tricked out fitness center, don’t forget to share the savings offered in not having to purchase a gym membership. Don’t assume the client understands this inherently. Show them, visually and verbally. Value is built in the details.

Change the way you share the price.
Don’t sell by offering a range of pricing, or by stating, “Our prices start at $$$”.
The client automatically will latch on to the lowest price and will expect to negotiate down from that point. Rather, determine which floor plan best meets the clients needs and work price offerings from there.

Cheap is not the only thing.
Although the “price buyer” declares it is all about who has the lowest price – that is probably not his only motivation.
If it were, he probably wouldn’t be in your neighborhood looking for apartments. He would be at the cheapest place in the entire metro area. You can always find cheaper if cheap is what you’re really looking for. The client that is price point sensitive is just looking for the best value. Show them why you are just that, and don’t be afraid to lose the client, if it really is about nothing but price.

Retrain salespeople.
What worked effectively last year, likely won’t work today. Provide support and solutions to your sales team and be as flexible as possible with pricing and policy guidelines. Listen to their views, and ask them for solutions. You may be surprised how little they may need to start moving product.

Monday, March 30, 2009

Decompression Zone

Have you noticed that salespeople are really “on it” these days? I enter a retail establishment and within seconds an exceedingly pleasant individual is asking how they might help me purchase something. In their efforts to show an eagerness to assist, they make me a little nervous. “Get back!” I want to say, “I don’t even know if I am going to muster up the courage to actually purchase something – give me a minute!” Turns out a minute may be exactly what I need.

A recent Business Week article reported that shoppers use the space just inside an establishment’s doors as a “decompression zone”. They will not notice signs placed in this area, rather, they will take in the total picture, (sights, smells, sounds), and assimilate themselves to being in the store. Then they will naturally turn right and head further into the establishment. Consumers respond best when approached approximately one minute after entering.

The next time a client enters your office, don’t pounce. Give them just a minute, and let them decompress. You might find it provides you a competitive edge.

When is the Last Time...

In today’s market, attention to the little things can have an enormous impact on occupancy and morale. To get you started…

Salespeople
When is the last time you

Asked your supervisor to come along on a tour and offer honest feedback?

Cleaned the model from top to bottom?

Changed up your presentation by taking a new path or trying different questions?

Told your manager which unit you could get $10 more for?

Reminded yourself you are a great salesperson?

Got current with follow up?

Stayed late or opened the doors early for a client?

Said “thank you” for the support and coaching you receive?

Managers
When is the last time you

Determined pricing by actually visiting competitors to gauge customer experience rather than analyzing a piece of paper?

Spent a day leasing apartments?

Asked an accusatory question like, “Why didn’t you get that lease?”

Determined goals with your people, rather than for them.

Reinforced and praised your salespeople when you catch them consistently doing follow up?

Said, “thank you”?

Friday, March 20, 2009

A Supervisor’s Most Important Tool

During a recent sales program, I asked the group to identify a time when they were surprised and delighted with someone’s follow through. I assumed they would share customer service stories where they were made to feel special, or where a wrong had been made right. As usual with my audiences, they surprised me. The majority of people who shared, told stories in which their supervisors followed through with them, by either thanking them for service rendered, or publicly recognizing them throughout their region or company.

The power of a thank you is profound, valued and remembered, particularly when given by a senior team member. Commit this year to doubling your thank you efforts. The impact to your team will be significant.

Your mother was right...don't forget your thank you's.

Branding Tug of War

Recently we were guiding a client (who shall remain nameless to protect the innocent) through a "mild" rebranding of their organization when we hit an unexpected snag. The kind of air pocket we only hit once or twice a year, but are surprised when we do. Within the heart of this company was a tug of war between the C-level executive team and the Operational leadership. Or, as they lay in bed at night trying to get to sleep, those who count dollar signs to get to sleep, and those who count vacate notices and open work requests.

Branding is a complicated, nebulous thing to begin with, and this post only scratches the surface. (let's meet for a beer for some stories) But in multifamily, this a critical lesson that has been well documented.

There are Stakeholder brand considerations, and there are End User brand considerations. Stakeholder brands are inherently B2B, and must convey return on investment, management acumen and capitalization. End user brands on the other hand are B2C, or customer facing. In asset management, we differentiate these brands with amenities, resident service, commitment to sustainable living, and other more "soft" attributes.

Which is more important? Neither. They're equally important. And we can represent both in a logo design or brand positioning statement. Which should win the branding tug of war? Easy. The End User brand. Here's why;

1. NOI is ultimately tied to the success of the End User brand more than the Stakeholder brand; and savvy owners know this.
2. Residents and prospective residents could care less about your strategic compass or mahogany conference table. They care how fast you'll fix their broken garbage disposal.
3. If your brand and identity look like you're a financial services company, you create a disconnect for your customer. Think: Wall Street.

Our clients who recognize this have higher occupancies, happier employees and set goals based on retention and overall satisfaction. The business goals always follow. As stakeholders, what do these clients do differently than the one who inspired this blog post?

They let the resident win.

Monday, March 16, 2009

Where's Your Pleather?

Trendcentral reported this week that pleather shoes are back, and better yet, being sold as “vegan/cruelty free” specialty items. Pleather! Talk about finding a way to make a mundane product with a cheap reputation hip and chic again. Give a product a trend-friendly spin, and voila’ – people have a reason to buy it again.

Think about your community or portfolio. What is right in front of you that with a twist, could add value to your offerings? Perhaps you have a vacant plot of dirt. A little elbow grease and topsoil could result in a community garden – very hip to today’s recessionista crowd. Maybe you have an old community but you have a lot of land. Pace it out and create a walking area complete with distance markers. Conference room void of conferences? Abandon that purpose and turn it into a CYO (Create Your Own) room. Offer classes in do-it-yourself fare and show people how to create with less. Don’t like that idea? Offer classes in money management or resume building. The point is, think about what resonates with your residents during these times and respond. In the process, you will build value.

Get together with your team today and ask yourselves, “Where is the pleather in our community?” Then redefine it.

Monday, March 9, 2009

What's The Good News?

Time for Some Good News.

Last week, Brian Williams, anchor of NBC’s Nightly News, acknowledged that he has been delivering depressing news to a depressed audience and sent out a call to the viewers to share some good news to report. In two days he received thousands of responses, more than they could ever cover live on air. He heard about a man who keeps a full tank of gas in his trunk and gives it to people who are in need, asking only that they do the same for somebody else. One woman goes up to strangers on the street and gives them money.

It's time to start turning some of this pessimism to optimism.
What's the good news?

Friday, March 6, 2009

Frugal Fix

This idea definitely won’t blow your budget. If your community is starting to show wear and tear, but your budget doesn’t include new doors, cabinets or floors, the Sharpie touch up permanent marker is for you. A few seconds and a few strokes with this permanent marker will get things looking like new. At $3.00 for three, in light, medium and dark wood colors, it’s a recessionista’s friend.

One word of caution – don’t try to color the whole cabinet…some things really do need to be replaced.
http://www.sharpie.com/enUS/Product/Sharpie_Touch-Up_Permanent_Marker.html

Thursday, March 5, 2009

I Fell Off the Wagon...and Lucky Got His Job Back

(For those of you that have not been following recent posts, I canceled my long time newspaper subscription a few weeks back. See Lucky Lost His Job Today for detail)

I couldn’t do it. I missed my newspaper too much.

Every morning I looked out my window to see, if by chance one had accidentally been left. Lucky stood next to me and howled. I perused the paper online, but never seemed able to get into articles over my breakfast the way I had been able to with the physical paper. I felt as though I was up to date on the headlines, but clueless in regard to the actual subject matter. I found myself squinting a lot to decipher articles found online. My comfort and my convenience had been compromised.

On Saturday, my husband took me to breakfast and I couldn’t believe the person I turned into when the vending machine ate my last dollar and did not produce my beloved paper. Then the Rocky Mountain News went out of business. I called and renewed my subscription.

I once had the good fortune to listen to Craig Newmark, founder of Craig’s List comment on what makes newspapers special. He believed there was a definite niche for the paper because the reader values the comfort and reflection opportunities the venue provides. It offers a time to step away and focus solely on in-depth content, whether at the breakfast table, on a subway commute, or even the restroom. I valued that experience more than I realized. The paper can be duplicated on line with the same information, but the experience of reading the physical paper, cannot. That is why it is my belief that newspapers will survive. It was for the experience I was missing, more so than the actual content, that I renewed my subscription.

Keep in mind, that your residents can get similar physical product anywhere. What they really value, and what they buy and will pay more for, is the experience your community provides.

Lucky has his job back. Every morning he retrieves the paper. I tried to go cold turkey and fell off the wagon, but I’ve got no regrets. I’ve got my experience back.

Monday, March 2, 2009

Part 1 "Where's my two dollars!"

Generations

"Kaleigh," I asked my 16-year-old, text-calloused daughter this weekend, "what do you think about the newspaper going out of business?"

"What newspaper?"

"The Rocky Mountain News. It's going out of business."

"Oh. Can I have money for Chipotle?"

Kaleigh, a 3.9 GPA Honor Role student and yearbook editor, lacks the emotional attachment of the local, front wave boomers struggling to overcome the shock since it was announced the Rocky Mountain News was closing. The nationally acclaimed Rocky knelt to its sister by, The Denver Post, last Thursday. And Denver isn't the only city. The demise of the print news is well documented across the country.

This isn't (or shouldn't be) a surprise. Nosediving ad revenue, struggling journalist identity and generational evolution all contributed to a decision grounded in the balance sheet. The evolutionary forces involved here could not be stopped as there was a gray generational cut off point coming at some point.

Reaction in Denver can be generalized by age group:

50+ crowd has the most to say, and can show you copies of the RMN they've kept in trunks, providing a timeline of their lives.

40+ crowd thinning, but recognizing the business reality.

30+ readers less affected, and able to let go.

20+ it would have happened here no matter how much this generation's grandparents would have held on.

16+ "what newspaper?"

And to those born after 1995, the newspaper is what we put under our art project so we don't make a mess.

Hand Jive

Recognizing when a client is ready to walk away from the bargaining table, in contrast to when they are open to negotiation can be paramount to leasing success. Richard Newman, a professional body language coach offers the following tips in the March issue of Forbes: Putting hands palm down is a sign that someone means business. When haggling over price, for instance, Newman says “palms down” is often a clear, nonverbal signal that a potential buyer intends to walk away. By contrast, when someone keeps his or her hands open and palms up, it suggests he or she is open to negotiation

The next time you find yourself negotiating a renewal, or trying to seal a deal, watch the hands.