Multifamily operators have a lot on their plate – and that doesn’t include the latest “fire” that needs immediate attention. The thought of taking time to develop and track lead management KPIs (key performance indicators) is overwhelming. Yet, hundreds of millions of dollars are spent on lead generation each year. And if you don’t know exactly where your leads are coming from, and how they are moving through the leasing pipeline, money is being wasted. Knowing exactly how your communities are performing financially is a must-have in your business.
While establishing multifamily lead management KPIs may not be on your daily to-do list, the ability to accurately obtain and assess lead management data through KPIs will help you assess actions and performance that can:
- Reduce costs
- Increase visibility into what impacts your bottom line
- Help you evaluate progress toward your operational goals
All great ideas – but where do you start? And what are the most important/valuable KPIs for your business? The following steps will help you develop and track your lead management KPIs, ensuring successful community performance.
1. Review your operational goals
Before you jump into establishing KPIs for your multifamily operation, take a step back and consider what you’d like your outcomes to be. What are the goals that have already been established in your business plan, and how can they be achieved? Are you interested in increasing the amount of leads generated? Reducing the amount of time units are vacant? Increasing the number of 2-bedroom rentals each month? Or improving the ROI of your marketing investments?
Keep in mind that not all multifamily communities are created equal. KPIs that work best for one company may not work best for yours. One of the single most important steps in developing lead management KPIs is to analyze your overall portfolio, review strategic objectives and then establish data-based KPIs to track your progress (or lack of progress) in completing these objectives.
2. Identify the most important KPIs for your business
You’ve reviewed your operational objectives, determined what your end results should be…but how can you measure the information available to effectively show outcomes? The following KPIs provide a strong base for generating results, and provide clarity and control over the lead management process.
- Total count of leads – the number of leads received on a daily, weekly, monthly basis
- Total count of qualified leads – the number of leads that have the greatest potential to become prospects or residents
- Lead-to-tour ratio - the number of prospects that became a lead compared to the number of prospects that took a tour
- Tour-to-Lease ratio - the number of prospects that signed a lease compared to the number of prospects that took a tour
- Lead-to-lease ratio - the number of prospects that became leads compared to the number of prospects that signed a lease
- Cost per lead - direct costs associated with lead generation
- Cost per lease - direct costs associated with each new lease
- Lead generation channel - the type of marketing that’s driving the most traffic, and more importantly, how this traffic converts from a lead to a showing and then to a lease
Review and analyze each of the above KPI’s, and work with your property managers, leasing associates and contact center staff to determine which KPIs will help you reach your goals.
3. Communicate the process and the results
Developing KPIs is essential for your business success; but before you dive in, speak with the key players within your organization to not only gain their strategic input, but to ensure they are working towards the same goal. Communicating information that is succinct and relevant, and explaining why this data is so important will confirm that your contact centers, leasing associates and property managers are working toward the same improvements.
Measuring the results of your KPIs will give you insight into the areas having the most impact so you can determine where to focus your efforts. Leverage your current CRM or invest in an advanced multifamily CRM that will generate real-time data, allowing you to make smart business decisions regarding each community almost immediately.
Effective lead management helps turn qualified leads into prospects, and prospects into leases. KPIs can create transparency throughout the entire lead management process giving you the ability to reduce costs, evaluate best strategies and optimize revenue generation.