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.

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”?

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.

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.

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?