Multifamily Blogs
Resident Retention: A Turn Costs What? Part 2
Resident Retention: A Turn Costs What? Part 2
In my previous post, "A Turn Costs What? Part 1" I stated two things: That most turnover is bad, and most turnover is something you can directly control. We covered the first statement in Part 1. Now I want to address the second statement:
Most turnover is something you can directly control.
According to the 2012 SatisFacts Index, residents were asked why they were not "Very Likely" to renew their lease. Here is the breakdown of the top reasons.
As you can see (and no surprise), there is a high percentage of residents who say their decision is due to financial reasons. Other top reasons have to do with a perceived lack of response by the office staff, whether it is handling complaints about their neighbors or returning calls and emails same day or not reacting to pest control issues. While it's tempting to step onto my usual soap box and preach the all-importance of providing an exceptional customer experience, I'm going to address the financial issues head on. The reason?
I know we have all used this as the easy excuse, the irrefutable explanation of why a resident simply had to move. "It was too expensive. They just couldn't afford it any more."
Buh-loney.
In her article, "Can You Afford to Lose 67% of Your Residents, Lia Nichole Smith writes that all residents expect beyond a shadow of a doubt that there will be some kind of rent increase each and every year. It is up to us as community teams to make it worth it. To demonstrate Value. The challenge has been that we haven't had a solid definition of how residents define value. Until now.
Based on a recent study conducted by SatisFacts and Ball State University, the top 5 factors that impact a resident's perception of value are:
1. The "Sense of Community" you feel among residents and the staff
2. Appearance and condition of your apartment
3. Appearance and condition of building exterior
4. Safety and security
5. Responsiveness and dependability of the staff
If this is how residents perceive "Value" than we have to be honest with ourselves and evaluate how we really do in these areas.
Do you consistently:
- Make a concerted effort to learn the names of your residents and their families and then use their name at every interaction? Do you ensure they know yours? (Sense of Community)
- Ensure that long-term residents of 5+ years get the updates they deserve, or do they have to beg for a carpet cleaning, touch-up paint, or a stove whose burners all work all the time? (Appearance and condition of apartment)
- Clean and freshen up the exterior of every building, especially the entrance, every day? (Building exterior)
- Enforce community rules and regs with actual consequences and communicate safety information when informed of potential threats or trends? (Safety and security)
- Return calls and emails same day and follow through on your promises? (Responsiveness and dependability)
Each of these factors are things that community teams can directly control. But you don't have to try and change everything overnight. Choose one thing. Challenge your team to focus on that one thing together. And if you really don't know what will impact your residents the most, ask them.
Most turnover is indeed bad. But most turnover can be directly controlled by you and your team.
Comments 9
Hi Chuck - That's an excellent point, and I think it is often the elephant in the room. Yes, reports are necessary, but what is actually necessary? Of all the streamlining opportunities a company has, this should be a top priority. Have everyone list every report they are asked to do daily/weekly/monthly/ quarterly/annually. Then for each report, define its purpose, who it goes to, and what business decisions are impacted by it. Most companies are shocked by the volume of reports that are generated weekly or monthly, are never reviewed by anyone, and are basically filed into some bankers box. The other typical discovery is that people are either doing reports that are no longer necessary but no one ever told them, or multiple people are creating the exact same report.
Amen, Jen and Chuck! Jen-great article as always and Chuck, great insights as always!
I love your comment, Chuck. It's amazing how some breathing room can spur creativity and innovation, not to mention happiness at one's job.
good graph. there are 7 things a PM can control, and if people leave because of any one of them, others will leave also and this will form pattern, no?
On of the pickiest people I've ever heard of was this woman who left because of the repeated power outages in the area, which has nothing to do with the property. I suspect it was a smokescreen for other issues.
I agree with you, Don. Often times a resident who is fed up for a variety of reasons will point to something that you absolutely can't control just so there is no room for argument. That can show itself in the form of, "I'm buying a home." - no argument there. "I'm moving across the country." - no argument to save them. "The power outages are too often." No real argument because management can't control. That's why we really encourage teams to focus on what they actually can control so that the resident needs are consistently met and they see that "Value" they're looking for.
Great job Jen! For point number 1, 'sense of community', the staff knowing the names of the residents is important, but the impact is even greater when residents have meaningful interactions with other residents. This turns the building from the place where you live, to your ‘community’. Parties and events help but don’t work for everyone. A community-building amenity like Spare to Share and some others out there, can make a powerful impact helping residents save money, make money and meet their neighbors through selling, renting and sharing within the closed trusted building environment. Very good article Jen!
Hi Greg - I agree that community-building can add value, but the eye-opening part of our study was that residents were defining "community" first and foremost through their sense of connection with the community staff. Did the staff make them feel like a VIP, did they feel like they had a go-to person in the office if they had questions or concerns, etc. I, probably like many others, have always assumed that these intangibles are simply basics in our world of customer service, but it was very interesting for me to discover that they are not a given. Not only that, but when communities do this very well (focus on building connections between staff and residents), their residents define that as a stronger "sense of community." I'm certainly not advocating to stop the community building between residents! I am advocating the additional focus on ensuring that team - resident connection as the main foundation of "community." And thank you for the excellent point that when it comes to connecting residents, there are more options than parties and events. It's great to have such a variety of options and experts available to find an approach that fits best with your resident base.
Makes sense! Thanks for the response and keep up the good work!
Thanks Greg!