Multi-Housing News - October 2009 - (Page 26)

property management Increase Resident Retention The key to keeping customers is measuring their satisfaction—and acting on the findings By Erika Schnitzer, Associate Editor ith more and more renters moving back home or doubling up, vacancy rates throughout the nation are on the rise. Industry experts agree that, while the emphasis is usually placed on leasing and marketing, there needs to be a shift toward focusing on the current paying customer. In other words, resident retention in today’s difficult economy is even more important than ever before. “Leasing/marketing gets all the attention, and it’s important, but that’s where you cut your losses,” asserts Doug Miller, founder and president of SatisFacts Research LLC, which currently has 500,000 units under contract. “Retention is where you grow NOI and protect against rising cap rates. Reducing W turnover is the easiest cost-free way to boost those numbers,” especially since each move-out costs an average of $4,500. The good news, according to SatisFacts’ statistics, is that 60 percent of resident turnover is, in fact, controllable. However, managers must first determine what it is that makes their residents want to stay at—or move from—a particular community. Recognizing what residents are “thinking about their community, and understanding their connection to the brand, is critical to understanding and knowing what keeps them satisfied and what will keep them around,” notes David C. Smith, vice president of operations at Kingsley Associates, a real estate provider of research and consulting services. The key to resident retention, then, is ensuring that your customers are satisfied with the product you are offering them. The problem in the industry, however, is that “all too often, companies talk about customer satisfaction but they don’t measure it,” notes Joseph Batdorf, CEO of J Turner Research, which measures satisfaction at 800 properties around the country on a monthly basis. And once you do measure the level of resident satisfaction of your community, it is equally, if not more, important to act on it, using your findings to improve occupancy throughout your portfolio. Measure it “The importance of measuring resident satisfaction is similar to why it’s important for any business to understand the voice of [its] customer,” explains John Falco, principal in Kingsley Associates’ Atlanta office. “Having that input and feedback allows you as a company to better provide for those customers and build their loyalty.” There is some contention, however, about the frequency with which residents should be surveyed. “There’s a huge difference between monthly and event-driven surveys and it goes to methodology,” notes Miller, adding that the central issue is how you use the information once you have it. On the one hand, as Batdorf believes, “Doing it on a monthly basis enables you to see trends.” For example, he points out, “if you have a rehab going on, or a new manager that comes in, or a new maintenance guy that’s taking over at the property, our system enables them to see what effect that’s had on the resident satisfaction levels” more immediately than if residents were only surveyed annually. On the other hand, Miller and his firm believe that event-driven surveys are more practical. “Those are the critical moments in time when you are more likely to get feedback, and feedback at critical moments can reduce turnover,” he notes. Such event-driven surveys include post move-in and post-work order. Kingsley also offers a postmove out survey, which is sent to residents once they submit a notice to vacate. When the resident Correlation Between Employee Engagement and Resident Satisfaction 100% Communities Where 2/3 of Associates Are Highly Engaged Percent Satisfied/Likely to Renew 80% 72% 60% 56% 40% 81% 72% 63% 78% 20%

Table of Contents for the Digital Edition of Multi-Housing News - October 2009

Multi-Housing News - October 2009
Contents
From the Editor
Executive Insight
News
Market Pulse
Finance: The Future of the GSEs
Investment: Transactions
Market Report: Midwest
Property Management
Development: Adaptive Reuse
Products
Technology

Multi-Housing News - October 2009