Renewal processes in the apartment industry are complex and time consuming. The manual work required by the onsite team to complete one renewal will make your head spin.
Initial renewal pricing is derived from the revenue management system. It then moves through a review process in which the revenue management team will carefully evaluate the suggested rate and either approve it as is, or make modifications based on varying factors. This pricing is then passed along to multiple stakeholders up and down the organization before finally landing at the property level.
The property team will have its say on the rate, but often any proposed changes must go back up the chain for approval. Once revenue management approves or modifies the desired property price and kicks it back to the community, property teams must enter that data into their systems and go through a 14-step process to generate a renewal
And that's simplifying it.
It's a very labor-intensive process that results in property teams spending hours verifying information, preparing offers, uploading each individual offer to the resident's record, scheduling follow-ups and performing manual resident outreach. Teams are required to do this with limited data and insights to help them prioritize and outline the best approach. It's something of a "spray-and-pray" method because they have no perception of a resident's needs or issues other than any incidental conversations that might have occurred throughout the year.
This haphazard method can also create compliance issues if jurisdictions have certain regulations regarding when renewal notices must be sent. The entire renewal process is often an afterthought for already burdened onsite teams that have many other community-related issues to regularly address.
This is just the business side of the equation. The wayward process can negatively impact the customer experience, as well. While leasing is a relatively uniform process in that each prospective resident has the same goal of renting a home, onsite teams aren't as privy to the precise needs of a renewing resident. Unique needs might include the desire for a bigger home, extra time needed to make a decision due to an impending employment opportunity, or open maintenance requests that they might use as leverage.
Operators constantly mull how they can collect this type of unique information—while also saving time by streamlining the process. And if they are not considering how they can make it happen, they should be.
Fortunately, tech tools are available that automate the renewal process yet still address certain nuances. For instance, if a resident views a renewal offer multiple times, follow-up communication will adapt and ask the renter what is giving them pause. If a resident indicates that they are awaiting word on an employment opportunity, technology can alert the property and give the resident more time to decide. That not only makes for a better resident experience but also equips the property team with previously unavailable insights. The property can then take more informed action.
These are merely a few of the high-level benefits properties can experience if they make the move to automate their renewal efforts through technology. Instead of subjecting themselves to a jumbled process—as outlined above—operators can gain consolidated control, achieve faster results and reduce the workload on property teams. The resulting benefits include a reduction in vacancy loss, a heightened customer experience, an increase in compliance and less-burdened teams.
It would be fair to surmise that most operators will elect to automate their renewal processes within the next five years. It is still a new concept in the industry, however, and many properties remain stuck using the cumbersome manual process that yields little case-by-case insights and often leaves both residents and onsite teams frustrated.
With something so crucial to the bottom line, it's only a matter of time before tech-powered and streamlined renewal processes become commonplace in the industry.