Lead to Lease: Optimizing Marketing Spend Through Technology

Eric Brown loves a niche market.

“The more niche, the better,” he says. “I think you go after them with a vengeance.”

So when Starbucks decided to fly the rainbow gay pride flag over its headquarters in support of Seattle Pride week last summer, it gave Brown an idea. If the coffee company could do it at its home base, why couldn’t he do it at his (then) six apartment communities in Tucson, and welcome members of the LGBT community to their next apartment home?

But he wasn’t sure he could sell it to his developer bosses at MC Residential, owner of 6,500 units in seven markets across Oklahoma, Texas and Arizona, where he recently took over as vice president of marketing.  

Brown made a name for himself as a social media and content marketing zealot at Urbane Residential, the apartment company he founded in Royal Oaks, Mich., long before the terms became buzzwords in the industry. Doing so helped him lead the firm to full occupancy in one of the hardest hit markets in the country on a shoestring marketing budget, even during the darkest days of the Great Recession. But his methods have also made him a pariah, especially among proponents of paid marketing channels, since much of his philosophy seems to hinge on driving marketing spend to zero.

Naturally then, he was pleasantly surprised when the higher ups at MC Residential gave his pride flag idea the green light.  

“Oddly, they said go for it,” Brown says.

He immediately put out a press release, announcing the company would fly the flags at its six Tucson properties during Arizona Pride week. That got him coverage in Arizona Pride magazine, which led to a platinum sponsorship of the Arizona Pride event for MC Life, the umbrella brand Brown created for all the company’s communities. The sponsorship came with a booth at the event, as well as a link on the Arizona Pride website.

“When we went to the event, I couldn’t believe it,” says Brown. “We were in the middle of 10,000 people, and we were the only apartment company there.”

Attendees of the event noticed. Brown says that while he usually needs between 45 and 50 unique visitors to his website to generate a guest card, from partnership marketing events like Arizona Pride, that number drops to 28 to 32. And once that guest card is filled out, he says he’s twice as likely to convert that lead into a lease.

“The conversion rates on those leads have been through the roof,” says Brown. “I mean, think about it. Let’s say you’ve got a guy, who just happens to be gay, come through our doors because he learned about us at Pride week. Then, maybe, he owns a golden retriever and sees we have an open pet policy. Right there, he already thinks we understand him, and we’ve never even met.”

Finding Your Happy Place
Brown’s tale of niche marketing and detailed tracking of his traffic, leads and conversions, offer a glimpse into the new world of technology and targeted apartment marketing today, and where it’s heading in the future. Beyond those metrics, he’s utilizing technology to consolidate branding at his properties, while streamlining the digital footprint he uses to generate leads. He’s increased his focus on content marketing efforts and has shrunk spending on paid advertising outlets—the holy grail of apartment marketing today.

Since coming to MC Residential last year, he’s reigned in the firm’s digital signposts, so that in each market where MC operates, it runs just one community website and one Facebook page for all of its properties in that city. Those community sites are rife with content Brown and his team have created, highlighting area restaurants, retail areas and attractions.

“We believe in the eat, shop, play philosophy of apartment marketing,” he says. “So on each site, we’ve mapped the top five places within five minutes and five miles where you can do those three things.” The result on those maps is 30 individual pins surrounding each of his communities, every one representing a business that he’s writing articles about—and often partnering with—in the neighborhood.

That not only gives prospects an overview of every area within the city where they might like to live, it also helps consolidate the number of likes and fans MC Life has on its social media pages, which makes them “bigger” in the calculus of search engine logic. It has worked: to date, Brown as assembled 55,000 Facebook fans, 40,000 Twitter followers and 10,500 Instagram followers across the seven regions MC operations in.

At the same time, he’s cut back on using ILS’s to list his apartments, and now employs those paid services for just two of his properties. He says he’s doing so only  on a strategic basis, buying time—and leads—while he revs up his employees to create more content on his internal websites. And he’s done it all with a marketing budget that he shrunk 22 percent from 2014 to 2015, while increasing his web traffic 300 percent in Tucson, the first region he focused on.

 A (good) Downward Spiral
“Our marketing costs are reducing every day, while our traffic is going up,” Brown says. “At the same time, I should point out it hasn’t gone to zero. We’ve hired a couple of writers, and have put a lot of resources into other areas and events.”

Like Brown, apartment pros today are optimizing their marketing spend by using technology to target lead sources that give them more for less, while doing the heavy lifting of creating content and driving traffic to their property websites themselves.

The result has been a shift back to the fundamentals of marketing, both online and in the real world, but with a 21^st century twist. Just like AAA Plumbing did in the age of the paper Yellow Pages, these marketers are spending time making sure they’re included in the resources prospects turn toward when they search for an apartment.

But they’re not doing it all online. Instead, they’re going out into the real world and interacting with their communities at live events, while rediscovering the importance of physical signage and way finders to help customers get to their door.

Spending from Within
Perhaps most surprisingly, though, while they may be spending less externally, they’re not necessarily spending less overall. The success of Brown and MC Life aside, minding all those details while putting the effort in to create all that content takes time—and money.

In fact, according to Carrollton, Texas-based MPF Research, while the cost of leads has held in a range of $17 to $24, the average cost per lease today is at $350 to $425.

“That’s definitely higher than it’s been in the past,” says Jamie Gorski, chief marketing officer at the Greenbelt, Md.-based Bozzuto Group, a third-party manager of 50,000 units. “Historically, that number has been more in the $250 to $350 range.”

To be sure, cost-per-lease metrics have always been difficult to quantify in the apartment industry, and experienced executives often view them as one data point among many. Still, the increase is remarkable, especially in an environment where many presume that internalizing marketing efforts and content creation saves money. That’s simply not always the case, although it does seem to produce results.

“Content marketing can get very costly, from staffing the creation of content to putting a budget behind spreading it out,” says Kitty Callaghan, vice president of marketing and training for Logan, Utah-based Wasatch Premier Communities, an owner of more than 16,000 units. “It can be a real challenge, but if you’ve got something powerful to say, or good resources to share, it definitely can be worth it.”

Take Gorski and Bozzuto, for example. Just as concessions were starting to enter the competitive Washington, D.C. market last summer, Bozzuto opened Fenwick in Silver Spring, a six-story, 310-unit luxury building of studios, one- and two-bedroom apartments catering to upwardly mobile D.C. professionals. But with rents starting at more than $1,500 for a studio, lease up was anything but a sure bet.

Arlington, Va.-based Insight Property Group, the building’s developer, had outfitted the lobby with lots of art, including life-sized models of black and white sheep. Riffing off the theme, Gorski’s team developed a campaign dubbed “Find Fenny,” the black sheep of the group, and branded the building with a black sheep silhouette on stickers, coasters and fence banners at the building, while incorporating Fenny into the building’s blog and social media presence on Facebook and Instagram to explore local eateries and other attractions in the neighborhood.

“And it absolutely took off. When we opened the doors, we had over 2,000 customers,” Gorski says. “It was great to open our doors and have that many people to deal with, and that was not paid search, it wasn’t using an ILS (Internet listing service). It was just this fun sort of ‘Hashtag Find Fenny,’ with great graphics of a black sheep. That’s one way you can use social media and content marketing to really drive traffic.”

Platform Shift
While Facebook is still the heavy hitter in the social media world—the site claims that its app is installed on 3 of every 4 smartphones, and that more than half of its billion-plus users still check it every day—other outlets have made gains, particularly Instagram. The photo-sharing platform surpassed Twitter last year in total users, and its visual nature makes it a natural fit for showing off properties.

“I love Instagram for apartments,” says Gorski. Brown says gathering more followers on Instagram will be his top online priority in 2015.

The rise of online directories—those simple lists that give an overview of different businesses in a specific area on sites such as Google Maps, Bing, Yelp, and Whitepages and YP.com—has contributed to the shift as well.

“The big change for us in the last year or so has been the online directories,” Gorski says. “We’ve spent quite a bit of time on them, and now we work with a total of about 40 so that we can make sure when prospects do a search, we come up.” The costs of those efforts have been minimal—about $40 per property per year.

Nat Kunes, vice president of product management at Goleta, Calif.-based property management software company AppFolio, says the key to those kinds of sites is that they’re local by nature. So much so that they’re even starting to supplant Craigslist as the go-to source of apartment listings.  

“Those local listing sites tend to produce the best [leads], because they’re more tailored to that specific location,” Kunes says. “It’s definitely a shift from previous years where Craigslist—although inefficient—was the king of total leases.”

Layering Paid and Organic
Gorski’s turn away from the ILS’s toward more self-generated content at Fenwick illustrates another trend among apartment marketers. Namely, while apartment operators have depended on Internet Listing Services as de facto lead generators in years past, they’re seeking out additional sources today. The reason why may be the strength of leads they capture from content-driven campaigns, where prospects have already started to get to know a property through the stories it tells before they ever get to its actual community website. And pros say spending money in other areas, such as paid search results, can net better results.

“Don’t get me wrong, ILS’s certainly help promote any vacancies,” says Wasatch’s Callaghan. “But our best lead-to-lease ratios typically come from our SEO and SEM [search-engine optimization and search-engine marketing] efforts. A general observation is that in some markets, our leads are actually down, but leases and occupancy are up significantly. We’re getting better qualified leads that are more likely to convert from SEO and SEM campaigns than from the more traditional ILSs.”

Similarly, Eric Clark, director of marketing at the Boca Raton, Fla.-based Altman Companies, an owner and manager of 4,800 units, says taking a layered approach to generating both organic and paid leads ensures you capture as much of the market as possible.

“I firmly believe that the layering of multiple elements, each singularly focused at engaging and converting traffic in their own way, is what generates our platform’s success,” Clark says. “Our website platform is multi-faceted, and includes a robust social engagement component, as well as search engine optimization and pay-per-click.”  

As these examples show, paying for leads is far from dead. But it is starting to take different forms, and marketers are pairing it with content they’ve created to capture even more prospects.

“Paid and organic search help identify qualified leads who are deep in the funnel, and are responsible for a huge number of our conversions,” says Callaghan. “We lean on these inbound channels to attract users in our target market, and pull them into our site. By combining on-page content and organic efforts with AdWords and Google Search, it let’s our site shine through.”

Indeed, marketers say once you get a prospect to your home page, that’s one of the best converting leads you can get. “For us, Bozzuto.com is still number one,” Gorski says. By contrast, only one ILS site is still in her top 20.

Social Advertising
Even as what apartment marketers spend their budgets on changes, so too have the possibilities for where and how they put those dollars to work. For example, while the majority of apartment operators use Facebook as a platform to communicate and connect with residents and prospects, generating and tracking leads there has often been elusive. But that may change soon with the emergence of “social advertising,” an outreach model that combines elements of paid search and social interaction.

“A lot of people hear Facebook, and they say, ‘Oh yeah, we’ve got that.’ But there’s a big difference between social media and social advertising,” says Brian Meert, CEO of Santa Monica-based AdervertiseMint, which focuses solely on targeted Facebook ads. “Social advertising is the process of pushing your message in a social environment to exactly the person you want to reach.”

Meert’s talking about those sometimes creepily customized ads that show up in your Facebook newsfeed. Want to court Millennials to your community? How about putting a targeted ad in the Facebook newsfeed of individuals 25-33 years old who have a bachelors degree, just got a job within a 20-mile radius of your community, make at least $40,000 a year, and have “liked” three restaurants in your area? You can do that, even if those individuals haven’t provided that exact information to Facebook.

“Facebook has a lot of data partners, and by matching email addresses and phone numbers, they can gather a lot of information to target an extremely specific demographic,” says Meert.

He concedes that while some people get “weirded out” by that kind of specific information gathering, he compares it to the tax, real estate and credit score data direct mail marketers use to deliver offers to your physical mailbox. “The only difference is this is online, and you’re embedding it between content they care about, just like a TV or radio ad,” he says. “You can use social to reach the people that would most likely be interested in your service or property.” Meert says the cost of social advertising is typically 50% to 75% of paying for Google search terms.

From New to Old
And yet, even as apartment marketers push into the newer frontiers of content marketing, social advertising and engagement—both online and in the physical world—and target new sources for leads, they’re also turning back to the fundamentals they’ve always used. 

“Signage,” says Gorski. “I think it’s more important than ever, and there are so many things you can do today: window skins, building wraps, way finding signs, and now, of course, digital signs. It makes a huge difference. I think as an industry, we may have taken our eye off of that for a while because we were so focused on what was happening online, but for us, signage is still a really big driver to generate traffic and leads.”

And so is going out to community events, as Brown did at Arizona Pride, and continues to do today. See you out in the real world.