Disclaimer: Local laws sometimes dictate resident referrals, so please review your local laws to determine whether this will work for you.

As I mentioned in my last blog, I find that ideas I hear about at the events like the NAA Education Conference result in spin-off ideas, and those ideas end up having spin-off ideas of their own.  So as I watched a great session about resident loyalty with Francis Chow, Donald Davidoff, Shellie Albosta, and Nicole Salmieri, I started digging into the idea of resident referral bonuses.  Resident referrals are a great source of leads, as  a referral from a friend can be vastly more powerful than seeing a typical ad about an apartment community.  Also, referred residents already know the existing resident, thus creating improved social groups at the community.  But today, I want to dig into how we actually distribute these resident referral bonuses, and if there are some unique ways to get even more out of them!

1) Targeting Quality Residents.  Even though we have the same acceptance criteria for all of our residents, it is safe to say that we still have "good" residents and "bad" residents, and yet we often treat all of these residents the same way when it comes to referral bonuses.  If we consider that residents are going to refer people who are similar to them, then our bad residents are more likely to refer more bad residents while our good residents are more likely to refer more good residents.  So rather than an across the board resident referral amount for all residents, have that amount be tied to good and bad behaviors by the resident.  For example, for every month they pay on time, their resident referral bonus goes up by $10.  Every time they renew, their referral bonus goes up.  Every time they socialize at a community event, their renewal bonus goes up.  Maybe if they receive a receive a lease violation from management about litter/balcony cleanliness, or noise, their renewal bonus goes down.  That means, over time, the good residents who have the most favorable criteria will receive more incentive to refer their friends than the bad residents!

2) Referral Bonuses Over Time.  We often give a lump payment for a referral bonus, but there is potentially a better way!  Instead of paying out one time, give the resident $10 off their rent as long as the referred resident stays at the community!  Fast forward a year, and not only does the referring resident want their friend to stay because they like them, but they actually have a financial benefit to them staying.  They become your external sales team!  The cost is not obscene either, with it being only $240 over two years, and if it works to renew them for a 3rd, 4th, etc year, it will be well worth the investment!  Potentially,  you could have someone who attempts to build their own pool of residents, getting a nice chunk off of their rent every month.

What do you all think?  Have you tried any unique ways to offer resident referral bonuses?