Back in 2009, Ed Spiegel, the founder and CEO of San Francisco-based RentMineOnline visited with Multifamily Executive about an exciting new idea: Use Facebook to catalyze resident referral systems and be done with the door hanger forever.
Between then and now, a wave of interest in social media crashed over the apartment sector, receded, and now seems ready to crest once again on an industry in full recession recovery mode. Fresh off of winning the best new apartment marketing company award at this month's Apartment Internet Marketing conference, Spiegel stopped by MFE again to chat with senior editor Chris Wood about RentMineOnline and the prospect for leveraging social media in the multifamily referral marketing space.
MFE: Social media was all the rage in multifamily two years ago and then seemed to die off with a lack of monetization strategies. Now it's back. What gives?
SPIEGEL: I think a lot of that has to do with Facebook really hitting a tipping point during that time period and growing at a pace of 50 million to 100 million users per year where now it is around 680 million users. I think everyone was learning about social media and was excited about it and launching property pages—which I think will still be a good retention tool—but people were having a a hard time getting residents to stick to those pages. I think people are getting interested again because the networks are obviously here and here to stay. People are beginning to recognize that there is longevity in the social movement.
MFE: And what is referral marketing, specifically?
SPIEGEL: Referral marketing is friends telling friends about their apartment community. When you have friends doing that, for example, through a Facebook news feed, Neilsen research has found that it triples recall, triples awareness, and quadruples purchasing intent compared to non-referral online advertising. Generally, the premise is that when you have residents telling their friends about their community, it is super effective.
MFE: How does RentMineOnline work?
SPIEGEL: We are essentially a back engine for property managers. There is an email coming from the property to the resident that thanks them for being a resident and asking them to recommend their community via Facebook, email, Twitter, MySpace, and now LinkedIn. It’s quick and easy; you can give away a $10 Starbucks card to the first 5 people who participate; you could get a $200 bonus if your friend moves in, etc. Each client customizes the messaging and any bonuses. All of the individual emails have unique links for tracking and are able to sign in via a Facebook connect app or by quickly creating a RentMineOnline account.
MFE: And then what happens with the referral?
SPIEGEL: After signing in, the resident can post a referral via Facebook, email, or Twitter with a set text message that says “I love living at XYZ community” with the option of adding additional positive comments that add color and can further personalize the message, which in turn can generate more comments and more likes, which then cycles the message through additional friend feeds as well. It’s an amazing tool that has a viral aspect behind it as well. On each post, there is a link that says “Learn How to Be Neighbors,” where the prospect will land on landing page with a photo of their friend recommending the property specifically to the user.
MFE: What types of analytics have you seen with the program?
SPIEGEL: Thus far, we have sent out more than 1 million resident emails, with an open rate of 26 percent and a click-thru rate of 7 percent with 33,000 log-ins, which makes for roughly a 3.3 percent conversion rate of residents who are ultimately logging in. From those 33,000 residents, we have tracked the marketing referrals to 4,996,033 friends. We can track how many friends have commented on any specific post, and how many friends have liked it, so you can get a sense of distribution as well.
MFE: How does that social tracking work?
SPIEGEL: So say John Smith is a resident and opts into the program with a public Facebook friend list, which on average is 150-200 friends. We compare that list with updated rent rolls from the community every two months and then back-check the rent rolls against the friends of the residents who have participated in the past. We call that a referral match: There’s no denying that John Smith lives at the property, made the recommendation, and that one of his friends now lives at the property. Based on an analysis of 100,000 aggregate units across a variety of client properties, we see that participation in the program increases resident referral rates from 2.9 percent to 9.4 percent. So the firms participating have a three times higher likelihood of closing a referral lease in any given year.
MFE: But isn’t social media still an insignificant portion of most apartment leads?
SPIEGEL: Well, you have to look at it from a property manager’s perspective and consider that resident referrals are typically the second- or third-largest source of leases. So within the world of resident referrals—which is a major lead source for filling up vacant apartments and has been for decades—we’re trying to create structure and an online avenue for residents to notify their friends that they are satisfied with where they are. Traditionally that was done with flyers and door-hangers that reach one or two people. Now you are reaching out to thousands and consequently having a more dynamic impact on referral programs overall.
MFE: Do you think that social referrals could revolutionize apartment marketing?
SPIEGEL: The world is one of a marketing mix that people need to put together. People are online and are going to be touched in a variety of ways on and offline that are going to lead towards leasing an apartment. I don’t necessarily know that any one of those avenues is ever going to become the pure, dominating source of leads to the apartment industry. We think ours is one of the newest ones.