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Jul 28
2009
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Cost per Lead - Cost per Rental Application - Cost per Lease
Posted by: Sergio Navarrete on Jul 28, 2009 01:00 |
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Name Your Price!
I tried posting this as a discussion as well, but I would like to reach a broader audience.
This question is for all multi-unit leasing agents, property managers, apartment operators and apartment owners.
If you were to think of a price per pre-qualified lead, per pre-qualified rental application, and price per lease that would be acceptable. A price for each of these that would allow you to make the decision on the spot.
NOTE- Pre-qualified = a potential renter interested in YOUR apartment.
Here is an example:
- Price per tenant lead: $20.00
- Price per rental application: $50.00
- Price per lease: $100.00
What is a price for each one of these that would make you say: "That is a great deal! I will take it!"
Thank you all for your input,
Apartment Marketing, Tenant Leads, Rental Applications
Sergio Navarrete
Hits: 1519
Comments (10)
Price per lease would be at move in.
Price per application would be per application delivered, but I would be interested to see what a "great deal" price per approved application would be.
I hope to see some feedback
Thank you all,
Sergio Navarrete
Apartment Marketing Solutions
Price per application would be per application delivered, but I would be interested to see what a "great deal" price per approved application would be.
I hope to see some feedback
Thank you all,
Sergio Navarrete
Apartment Marketing Solutions
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This is an interesting and important discussion, Sergio. I think the answers cahnge relative to the specific market, the specific market conditions and where the leads are coming from. There is also the question of how you arrive at the number; advertising, (cost per lead) + leasing commission + application fee +, etc.
I have a client who is paying $200 per lead and is happy. They close at any average of 45% (these are qualified leads).
I have a client who is paying $200 per lead and is happy. They close at any average of 45% (these are qualified leads).
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There is one way to achieve $100 per lead but it isn't easy...
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@Kim You have a client paying $200 per lead!!! That's outrageous!
@Sergio I use Rent.com as the benchmark and work all the other numbers around that model. $389 per lease is the maximum I want to pay whether it be leads that get me to the lease or applicants. A $100 cost per lease model sounds very low, but would be very attractive to me. I don't think anyone will care for the applicant model, but who knows. I don't care for the lead model as it's even more challenging to monitor than the per lease model. With that model there needs to be a maximum or cap to the potential expense for many to take on a lead model.
@Sergio I use Rent.com as the benchmark and work all the other numbers around that model. $389 per lease is the maximum I want to pay whether it be leads that get me to the lease or applicants. A $100 cost per lease model sounds very low, but would be very attractive to me. I don't think anyone will care for the applicant model, but who knows. I don't care for the lead model as it's even more challenging to monitor than the per lease model. With that model there needs to be a maximum or cap to the potential expense for many to take on a lead model.
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Hey everyone,
Thank you for your responses,
I have considered dropping a survey into this post.
Is that allowed?
Do you think that would be helpful?
After a few weeks I would publish the results on this blog.
What do you think about that idea?
Also getting back to the discussion,
How would $10.00 per prequalified lead sound?
How would $20.00 per prequalified application sound?
Are these the deal of the century? Are they too low? Or too high?
Thank you for your responses,
I have considered dropping a survey into this post.
Is that allowed?
Do you think that would be helpful?
After a few weeks I would publish the results on this blog.
What do you think about that idea?
Also getting back to the discussion,
How would $10.00 per prequalified lead sound?
How would $20.00 per prequalified application sound?
Are these the deal of the century? Are they too low? Or too high?
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Yes, I agree with Mark. I've been informally asking my clients this same question for about a year. Most come back with "rent.com charges me $389 per move-in (sometimes lower)"
The cost-per-lead or cost-per-application seems foreign to the multifamily industry.
What if our marketing brings in 10 eager, qualified apartment hunters walking through your leasing center but your model stinks like cheese and your rents are outrageous. Or, even worse, your short-staffed and have one brand new leasing agent trying to field 3 walk-ins at the same time.
In this situation, with a pay-per-move-in model, the marketer gets nothing.
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The pay-per-lead model is ambiguous. What's a "lead" - a walk-in? A phone call? An email? To what degree are they qualified?
We have a few clients who pay $25 per walk-in lead plus a nominal charge - about $200 per week. This price point works okay, but there is still a grey area on what a "lead" is. Is a walk-in lead someone who walks in, takes a brochure and leaves?
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We've been flirting with a $125 per application charge - whether the applicant is approved or not. Once again, this has a $200 per week base fee as well.
We would track applications through a incentive (similar to rent.com) and have the applicant report their leases directly to us. I'd love to get some feedback on this pay-per-application pricing structure!
The cost-per-lead or cost-per-application seems foreign to the multifamily industry.
What if our marketing brings in 10 eager, qualified apartment hunters walking through your leasing center but your model stinks like cheese and your rents are outrageous. Or, even worse, your short-staffed and have one brand new leasing agent trying to field 3 walk-ins at the same time.
In this situation, with a pay-per-move-in model, the marketer gets nothing.
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The pay-per-lead model is ambiguous. What's a "lead" - a walk-in? A phone call? An email? To what degree are they qualified?
We have a few clients who pay $25 per walk-in lead plus a nominal charge - about $200 per week. This price point works okay, but there is still a grey area on what a "lead" is. Is a walk-in lead someone who walks in, takes a brochure and leaves?
--
We've been flirting with a $125 per application charge - whether the applicant is approved or not. Once again, this has a $200 per week base fee as well.
We would track applications through a incentive (similar to rent.com) and have the applicant report their leases directly to us. I'd love to get some feedback on this pay-per-application pricing structure!
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Mark,
I agree. I am encouraging them to pursue other avenues.
Sergio,
I think that $200 as a cost per lease is reasonable. An advertsing model that delivers pre-qualified leads is a good one. The correlation between lead and lease is a critical calculation to evaluate the advertsing source. Some sources consistently deliver qualified leads that convert at a higher ratio. Leasing commissions should be figured in as part of the cost of a leads and a lease,(if you pay commisions).
I consider application fees part of the cost of operations and agree that they should be separate.
Kim
I agree. I am encouraging them to pursue other avenues.
Sergio,
I think that $200 as a cost per lease is reasonable. An advertsing model that delivers pre-qualified leads is a good one. The correlation between lead and lease is a critical calculation to evaluate the advertsing source. Some sources consistently deliver qualified leads that convert at a higher ratio. Leasing commissions should be figured in as part of the cost of a leads and a lease,(if you pay commisions).
I consider application fees part of the cost of operations and agree that they should be separate.
Kim
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Thank you for your comments, I am glad that this discussion is going so well. Keep on posting as I will actively answer questions if you have them.
The way we track leads are those people who call in or email the apartment property. These leads are easily quantified and qualified as being A) Interested in moving to that specific area, and B) Interested in that specific property.
From what I can see so far is that many apartment managers pay a pretty hefty bill for leads and leases, but pay per application is something new that has not been introduced to the market correct?
Thank you for your comments,
Sergio Navarrete
The way we track leads are those people who call in or email the apartment property. These leads are easily quantified and qualified as being A) Interested in moving to that specific area, and B) Interested in that specific property.
From what I can see so far is that many apartment managers pay a pretty hefty bill for leads and leases, but pay per application is something new that has not been introduced to the market correct?
Thank you for your comments,
Sergio Navarrete
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What Do You Think?
"price per lease" is a head in the bed? do you collect fees after move-in?
"price per application" is an approved application? what if applicant fails criminal, poor rental history, etc....do you still charge?