Sometimes, your best marketing agents are living within the walls of your own property.

Such is the case for King of Prussia, Penn.-based Morgan Properties. Back in 2008, its properties were littered with traditional door hangers and flyers requesting tenants to refer friends to available units, luring them with incentives like Starbucks gift cards or, even better, a $200 to $400 rent credit. Though the incentives were enticing, residents either trashed or simply overlooked the flyers, a common tale told at most multifamily properties. It only ended up being a waste for the marketing department.

That’s until Peggy Hale, vice president of sales, marketing, and training at Morgan Properties, was introduced to the idea of using social media-based referral programs. 

Tapping into the social media network of your resident is simple. The transparent process allows residents to send e-mails and share links with friends over networks like Facebook and Twitter, referring the public to its place of residence. It capitalizes on the idea that tenants want to live around friends.

Companies like LeaseStar Social do just that. Formerly RentMineOnline before being purchased by Real Page in July, the company's product gives the resident more publishing power and makes it easier for them to submit referrals. The service works by offering existing residents incentives to sign up for the service—say a $5 Starbucks gift certificate. It then asks them to recommend their community to their social media networks.

It’s about three times more effective than traditional door hangers, and generates three times the amount of leases, says Ed Spiegel, founder and CEO of LeaseStar Social. “It’s focused around the resident leveraging their networks,” Spiegel says, adding that the biggest incentive, outside of referral bonuses, is that “residents want to live with their friends.”

LeaseStar Social additionally helps with reputation management, another key factor in garnering referrals for properties. At Charleston, S.C. - based Greystar, the product is employed at 75 percent of its properties, and the company has already made reputation management a priority by encouraging residents to leave comments on and Google Plus. After all, if the tenant isn’t happy with the property, then they’re less likely to refer people to live there with them.

“The key is making the process of referring someone easy for residents,” says Greg Benson, senior director of marketing at Greystar. “Traditional methods require the resident to do most of the work–crafting the message to their network, calling people, remembering to bring it up in conversation, etc.  E-mail was the first step in making the process easier for them.”

No More Flyers
The problem at Morgan Properties was it didn’t have a good handle on resident’s e-mail addresses. So throughout a two-year process, they acquired resident information from 120 of its properties, the easiest collection being at student properties. By mid-2010 with more than 50 percent of e-mail addresses accumulated, LeaseStar Social was up and running throughout Morgan’s portfolio.

At most, the company still uses flyer reinforcements at property exits and entrances–but the door hangers are non-existent, saving it tons of money. In three years, those paper door hangers would have reached 360,000 people and cost Morgan $400,000 in printing costs. Now, with their social media efforts, they are reaching 1.5 million residents, friends of residents, and friends of those friends.

“My maintenance team no longer hates me,” Hale jokes. “There’s none of the printing costs, the poor maintenance teams having to work through the hallways, no more additional trash. It’s a green technique, so we love that.”

The use of social media based referral program works best in locations that are more tech savvy, where the demographic has a higher online presence. Still, when the program works it builds reputation and growth. Morgan’s percentage of leases generated from referrals went from 2 percent in 2008, to 12 percent in January.

Traditional referral methods have to work in tandem with typical advertisements that are “healthy, and wide, and varied,” Hale says. Too much concentration on one particular ad source leaves your marketing efforts in jeopardy if that source dries up. And using referrals is just a low-cost form of peer to peer advertising.

“These are better than ads,” Spiegel says. “They work in tandem with them but they’re even more powerful. It’s way more meaningful than picking up a newspaper and seeing a property because your friends are recommending it to you.”