Enter your email address for weekly access to top multifamily blogs!

Rommel Anacan

Welcome to my blog on MFI! This blog allows me to have an ongoing conversation with multifamily professionals like you. My focus is on helping you and your companies succeed by helping you optimize the quality of your relationships. If you'd like more information about me, my company and the ways that I can help you, please visit my website at www.RelationshipDifference.com

Working Your Business Strategy

Working Your Business Strategy

In my blog post "What Is Your Business Strategy?" I mentioned that there are three basic elements of business: price, service and quality. In my experience businesses that succeed compete well in two of the three categories. You may be wondering, "Shouldn't successful businesses compete on all three?" While I think that would be great, it's often not economically sustainable to try and have the lowest pricing and high quality and amazing service. 

How this works
One of the communities I worked at was ultra high-end luxury apartments with stunning ocean views in a very affluent area. When I started at the community we offered great service (we had a lot of staff on-site to cater to our residents) but we were undergoing a massive renovation at the time which meant that the majority of our amenities (a huge reason to rent there) were not able to be used for a while and we were doing renovation work in our apartments as well.

All of this work affected the quality of what we offered to our residents and made our community less attractive to potential renters and to our current residents. We marketed this community as ultra-luxury but that was not the reality of the experience during this season. However we did NOT compensate for the temporary drop in quality with a decrease in our overall pricing strategy. There was a disconnect between what we offered and what we delivered. We were only competing in one of the three main areas and we suffered until we made some pricing changes to get us through the renovation season. Once the renovations were done the community was amazing and performance continued to improve. 

I worked at another community that had a lower quality product (it was just older) so we offered great service and we had competitive pricing. We didn't want to be the cheapest (as that wasn't the customer we were chasing) or the most expensive in the market, especially considering how our older community stacked up with the A-product in our submarket, so our pricing was down the middle, but still very competitive for what we offered, while still generating a nice profit. We actually tried doing extensive renovations (upping the quality) in select units and the ROI didn't make sense for market conditions. So we backed off that initiative and did a smaller scale refresh. That was far more successful. 

We didn't try to advertise our community as "luxury." There were no fancy French words used in our marketing materials. There was no concierge in the office. We knew who we were and what we offered (great value, great people, great location!) and that is why we were consistently profitable. 

What does mean for you?

  • Identify where you compete! Is it pricing and service? Service and quality? Quality and pricing?
  • Examine if what you're selling matches what you actually have. Are you advertising "champagne wishes and caviar dreams" when you really have light beer on tap?
  • Resolve to be the best in the areas you're competing in. If you're selling quality, does the carpet you're putting in scream quality? If you brag about great customer service are you really offering great customer service?
  • Does the rent you want to charge match the product you're offering? 
  • Use vocabulary that matches your strategy.

I know there is so much more that can be said about business strategy-but I hope this gives you and your teams food for thought as you reflect on 2018 and plan for 2019!

 

Rate this blog entry:
1
 
This comment was minimized by the moderator on the site

Great blog, Rommel!

  Brent Williams
This comment was minimized by the moderator on the site

Good read. This knowledge pertains to all businesses. Finding that sweet spot is key. Thanks.

  Kevin
This comment was minimized by the moderator on the site

Thank you, Kevin!

  Rommel Anacan

Comment Below

  1. Posting comment as a guest. Sign up or login to your account.
Attachments (0 / 3)
Share Your Location
Finding new tenants each academic year can be a real burden on landlords and property managers. Tenant retention is an important issue which sometimes gets overlooked when it comes to student housing. Generally speaking, most college and university programs last between 2 to 4 years.   Many student renters will change up their accommodation each passing year, making landlords constantly on the hunt for new tenants. The process of replacing student tenants each year can be both time-consum...
Resident retention is a particularly challenging facet of student housing. This is largely due to the renting tendencies of students, who are often considered as transient renters. What we mean by transient renters is that they frequently change their living accommodations over the course of their academic careers. This can be rather taxing to landlords and property managers, as low renewal rates create the constant need to find replacement tenants. But what if there was a simple way to boost le...
Rewind to a decade ago and major REITs would have quickly dismissed student housing as a small niche market with minimal investment potential. The concept of purpose built student housing was almost exclusive to on-campus housing; aside from a few early adopters who helped usher in a new era of student focused accommodations. Outside of on-campus housing, students would by and large rent properties from independent landlords or local apartments. However, in 2015, the student housing se...