funnel lease CEO on how to prepare for the brand revolution.
Brand influences almost every area of our lives: what we eat, what we wear, what we drive, how we travel and where we stay on vacation. But when you’re moving and ready to rent an apartment, do you think about the brand? or the specific property? Brands influence our behavior in everything but where we live, and that’s about to change.
35% of the country’s 122.3 million households are renting as of 2020, the last year for which the Census Bureau is reliable estimates† With the ongoing tightness in the housing market, this number is expected to grow. Businesses that manage multi-family homes must invest in building relationships with tenants or brand loyalty will be out of reach.
Here are the three action points to prepare your properties for the brand revolution.
1. Build a relationship with tenants.
A prerequisite for building brand loyalty in any industry is a one-to-one relationship with your customer: in this case, the tenant.
Unfortunately, this has not been possible in the multi-family industry because when property management software is used for tenant workflows, vital information is stored in such a way that property management companies (PMCs) are held back. They have no way of knowing that a tenant who has lived in one location in their community is the same tenant who lives in another location.
The litmus test of the multi-family brand is: does the brand affect a tenant’s propensity to rent from a community? To influence tenant behavior through their brand, PMCs need to operate in a way that puts tenants at the forefront, both in their amenities and with their digital platforms. This includes things like providing amenities tenants want and need; beautiful, safe places that feel like home; intuitive digital experiences; and a welcoming atmosphere. This all starts with building a one-on-one relationship with the tenant.
For inspiration, let’s take a look at airlines and how they’ve taken the lead in building brand loyalty as they take us around the world. Every airline cannot fly to every airport worldwide, so they build partnerships with each other. Star Alliance, the first global airline alliance, started in 1997 with five airlines. Today, they have more than 26 member airlines and provide convenient connections to almost any destination worldwide. Because airlines have a one-to-one relationship with the traveler, they collectively reward traveler loyalty for regularly flying with a sister airline within the alliance.
2. Rethink the brand name.
Generic property names are a missed opportunity. It’s time for PMCs to get rid of ambiguous names and create brand recognition by incorporating the company’s brand into property names.
A challenge to make this possible are the houses themselves. Brand may not matter to PMCs if properties change hands frequently. In other words, brand matters to PMCs only if they have a long-term strategy for the communities they acquire. Today, most owner-operators are on the road to community branding, but their efforts are not without challenges.
Multi-family rebranding isn’t as easy as launching a new website. It includes the usual stuff in a digital rebrand and also real estate level renovations. Renovations may include removing old branding from the community pool or sandblasting logos to the exterior of the building. Due to cost and logistics, these projects are easy to put on the back burner.
3. Improve your tenants’ experience with easy-to-use technology.
Brand conveys experience and matter in all asset classes and real estate types. For multi-family real estate management companies, technology influences expectations for your brand. Tenants don’t differentiate between the chat feature on your website, their rental application process, or your app from your actual properties itself. The frustrations or convenience created by any renter-centric technology reflects—for better or for worse—on your brand. If you’re investing in creating a digital experience for your tenants, make sure it’s a good experience that helps build brand loyalty on your properties.
The future of multi-family housing is brand.
The bottom line is, the brand becomes a part of the multifamily industry through companies that have the scale and density to take advantage of it. Larger operators will focus more on the brand to achieve lower acquisition costs and longer customer life, providing a competitive advantage. This will influence smaller operators to create an intra-portfolio model similar to a multi-family version of the Star Alliance tenant loyalty program. Partnerships allow smaller brands to work together and achieve the same benefits as larger operators. As a brand late comer, or a walled-in garden approach to tenant rewards, will disproportionately penalize smaller businesses. These models may feel revolutionary, but the brand is very important for the future of multi-family housing. Either we choose to rethink the status quo and disrupt it internally, or external companies will create the disruption for us.