In 2001, I was really fortunate to join the team at Rent.com. At its peak in 2006, Rent.com was the most efficient producer of leases in multifamily. I learned a lot from the entire team especially the co-founders, Scott Ingraham and Allan Hunter.
Scott and Allan were the leaders of Oasis Residential, a Las Vegas based REIT which sold to Camden in 1998. Rent.com was my first experience working for an Internet Listing Service (ILS). From Scott, Allan and COO Gina Anastasi, I learned a ton about how management companies mitigate exposure. Allan was very involved with Oasis’ advertising and saw the value to their brand. And despite being someone who constantly defended the need for ILS (and at the time, print) advertising, I will never forget the words he said to me after one management company cancelled Rent.com:
Todd, they may need your services today and genuinely like you and the company, but they will cancel you in a heartbeat if they can. If you work in the ILS space and truly want to be loved, go buy a dog.
So why this stroll down memory lane today? When Anyone Home launched into multifamily, we decided that each time we conducted a lease analysis for a customer we would homogenize and combine the data into a single file to produce benchmark results. With several hundred thousand units now live, we’ve reached an inflection point where critical mass has been achieved.
Being that it’s the holiday season, we want to be careful not to “call out” any specific source. And in truth, there is no such thing as a universally good or bad source. What looks high or low converting at the macro level changes at the micro level. When you remove an ad source from your arsenal, it should always be considered at the property level.
Having said that, there are some key points in this analysis:
- Your property website is the highest converting source. Let’s use that as the baseline.
- The graph above answers the question, “With your property website as the highest converting source and the baseline, how many leads do you need from lower converting sources to get the same number of leases?”
- Calls from your local line convert almost the same. You need 1.1 of those leads to get the same number of leases as 1.0 leads from your website.
- I bet 75% of you out there that use a contact center don’t have your local line forwarded! Yep – we heard that “Gulp!”
- Social media/reputations/ratings and SEO/SEM are pretty close as well at 1.2 followed by Craigslist at 1.8.
- Then it gets interesting – you need 2.5X more ILS leads to get the same number of leases as 1 of your website leads!
- Signage and syndication are far worse; however, their cost-per-lead is tiny and makes up for the low conversion numbers.
Moral of the story? ILS’s are an important part of your marketing mix and you likely cannot maintain favorable exposure without them; however, you can decrease your dependency on more expensive advertising by:
- Never missing a lead from your higher converting sources.
- Having a sophisticated nurturing campaign that enables you to take the right action, with the right prospect, at the right time.
Can you miss leads and not have a sophisticated method for dealing with those moving in more than 30 days? Sure. There’s millions of units across the country that do this. They just need to purchase leads that are far more expensive and require 2.5X the effort to maintain exposure.
*Analysis Notes: The conversion data is used by comparing leads that are 100% digitally tracked to the originating source with move-in data from the various property management software platforms. This analysis encompasses data from dozens of property management companies with hundreds of thousands of units.