Although training is notoriously hard to quantify in terms of establishing a Return on Investment (ROI), sometimes we are gifted a story where a lesson can be tied back to specific, tangible results.
Earlier this year, Toni Blake joined the Webinar Wednesday series to present, Raising Rents without Raising Eyebrows, which tackled the then-current challenge of selling higher renewal rates to residents, which were sweeping the industry. BSR had 14 on-site teams on the webinar at a total cost of $419.86.
At this point in addressing an ROI for training, we often say, “If your teams got just one tip to help them increase rents by X%, then they would have achieved ___ ROI,” which sounds great in theory but discussing ROI in terms of an “if” is generally not very convincing. However this time, we were able to translate those lessons into actual profit! Here is the feedback we received from an on-site team member at BSR, Tamanaca Gruppi:
My notices were increasing higher than I’ve seen in my 30 years of property management. I had to stop the bleeding. What did I do you ask?
I had three opportunities to employ techniques learned from the Toni Blake, “Raising Rents without Raising Eyebrows”. After the webinar, I jumped on google and begin researching my points of consideration. Inflation caused by the pandemic how it is effecting everyone, not only rental increases but groceries, gas, property taxes and general services. After I compiled my list I felt empowered to discuss the residents rental increases with confidence. I was ready to close all the doors. Front door, back door, garage door, you name it.
I had an angry resident who wanted to put in his notice because his rent was going up $150.00. I proceeded to explain the many factors that necessitated the increase. Even though we may not like inflation, it is now a part of our lives post pandemic. We don’t challenge the gas price increase, neither do we challenge grocery increase. It is simply something we have to endure. So why are we shocked that the largest bill we have which is our rent/mortgage would increase? Inflation is happening all over the world. None of us are exempt. I said to the resident, “You can move that’s your choice; however, think about the cost you will sustain preparing to move such as deposits on the apartment, pet, electric etc. You are wanting to save money but you have just spent more than your rental increase. You are a valued resident and we hope you continue to make Alleia your home. We are an A+ property which requires us to maintain the property at a higher level which involves higher costs such as Freon which has gone up 300%! As an owner we feel the crunch the same as everyone else. We are a business and people are in business to make money. We have higher taxes as a multifamily business that costs almost ½ million dollars. You want to live in an A+ property but pay D- rental rates. You need to compare apples to apples.” I could go on and on but you get the jest of it.
Drum roll please….HE SAID SEND ME THE LEASE RENEWAL! Be confident in what you are saying and the product you are selling. Be convinced in yourself by first doing your research. KNOWLEDGE IS POWER.
Then I did that two times over. LOL-SAVING LEASES, one lease at a time!”
~ Tamanaca Gruppi
Along with sharing Tamanaca’s story, Jennifer Gulledge, Director of Training at BSR, added, “She said that she feels so empowered. What wonderful results. I love this!”
Determining the Relative Profit
As we think about the ROI for this training, let’s narrow it down exclusively to the 100% known factors. In that vein, we are going to ignore the following, even though we know they must exist to some degree:
Let’s dig into the hard facts of the story Tamanaca shared. She was able to achieve an astounding $150 per month rent increase, with a yearly value of $1,800. She was able to replicate this two additional times for an estimated total of $5,400.
At this point, we have to consider that the apartments wouldn’t have gone vacant the entire year, and if their rent estimations were correct, she would have been able to fill those units with comparable rental rates from new prospects. However, we must also account for turnover cost, which was estimated at $3,976 per apartment. Therefore, if the three residents were not renewed, it would have resulted in a total turnover cost of $11,928, and a net loss of $6,528. Since Tamanaca was able to renew the residents, she achieved a profit of $5,400.
Developing an ROI
By implementing Toni’s lessons during her Webinar Wednesday session, we can quantify the profit Tamanaca was able to achieve of $5,400. What is the Return on Investment of that training decision? With an initial cost of $419.86, it results in astounding ROI of 1,286%.
To put it in a different way, if Tamanaca’s on-site team subscribes to the Webinar Wednesday series using our basic discounted rate, this one training experience would pay for over 11 years of training.
As we prepare for the future, it is important that training is seen as an investment towards greater profitability, rather than simply an additional cost that the property must absorb. For Webinar Wednesdays, with a starting monthly property subscription at just $39.98, the value on-site teams will receive far outweighs the cost, and considering that we are able to reduce that further through portfolio pricing, the potential financial benefits are quite eye-opening.
If your company views training as an investment in your on-site teams, we would love to discuss special portfolio pricing so they can join the Webinar Wednesday series. Please click here to request a discounted pricing quote.