How much money in lost rent could a couple of missed phone calls cost your leasing professionals? How about up to $67,600 per property per year?
Or at least, that’s the word according to a nine-month study of 7,200 units at 40 properties recently completed by Englewood, Colo.-based Archstone and verified by Emeryville, Calif.-based Joshua Tree Consulting.
The 2009 study included 20 control properties and 20 properties using the Level One TimeWise product, with all properties on Rainmaker’s LRO yield management software. When extrapolated to typical multifamily properties, the results are the amount generated by the combined use of the Level One and LRO technologies.
The Nuts and Bolts
TimeWise provides 24/7 phone and email engagement from trained call center specialists that set up property visits and solicit guest cards. Level One claims that call center coverage results in phones being answered at least 98 percent of the time, compared to a typical multifamily leasing office metric of approximately 60 percent of calls answered—a difference proved out in the Archstone test (Archstone did not use TimeWise’s email response functionality).
“It’s regular Archstone stuff: We don’t make decisions without testing the hell out of things with a scientific approach,” says Archstone group vice president of strategic systems Donald Davidoff of the intensive study. “The interesting thing was that the test was to determine if Level One could pay for itself. The top level results were a clear yes, but the really interesting thing is that we inadvertently proved out LRO.”
According to the study, the increased capture of phone traffic translates to a 37 percent increase in guest card traffic to sites in the test group. That increase in guest card traffic, when interpreted as apartment demand by LRO, resulted in a captured rent increase of 150 basis points. When extrapolated to a typical industry apartment property of 250 units with rents ranging from $1,000 to $1,500 per month, the annual increase in captured rent ranges from $45,000 to $67,500, which could translate to millions in additional portfolio revenue without adding additional marketing or lead sources.
Davidoff and Joshua Tree Consulting president Steve Lefkovits were quick to point out that the study was conducted during a period of falling rents and occupancy. In fact, occupancy in the test group was slightly lower than in the control group during the study period despite the overall gain in revenue.
“The revenue increase was not from increased occupancy; it was from real-time visibility into the new, higher demand,” says Lefkovits, who authored a white paper on the study. “It’s exciting that even a sophisticated company like Archstone can increase prospect leads and income by having 98 percent to 99 percent of their inbound sales calls answered.”
Lefkovits and Davidoff also suggest that the study proves out the efficacy of guest cards that can be incorporated into broader leasing and property management technology platforms, including revenue management. That could be an upshot for industry lead generators, including in-print and online ILSs recently maligned for the matrices used in calculating lead volume that they attribute and charge to multifamily properties.
“Archstone’s test validates ad publishers and Internet listing services that have long claimed that they are delivering far more leads than they get credit for,” Lefkovits wrote in the white paper. “Further education and research are warranted to underscore the marketing dollars that are currently wasted by sub-optimal lead handling.”