Since the principal cause of losing tenants is bad staff performance, recognizing the value of customer service can help you retain them and prevent the much more costly turnover. Your goal is 100% retention. You’ll always have tenants who will need to relocate because of jobs or life circumstances but concentrate on offering residents the best experience possible while they’re under your management. This will result in the highest occupancy rate reasonable.
Communicate with your residents. Treat tenants with respect and be considerate of their needs. Once they move into your unit, focus on delivering exceptional service, so you instill rental loyalty and trust. Being responsive and providing excellent customer service will motivate existing tenants to stay. Engage your tenants with raffles, informative newsletters, and seasonal events. Being involved with your apartment community shows residents that you care about their experience, increasing their perceived value of your services.
Experiment with promotions and discounts. Renewal bonuses, free last month’s rent, and wi-fi? Phone and cable companies offer deals and free services because they work. The lifetime value of a customer is far higher than the cost of free texts, or in your case, free utilities.
Encouraging tenants to renew their lease. You’ll increase your building’s profitability as well as reduce the number of dissatisfied tenants. Another perk of having satisfied residents is that they’ll be less resistant to rent increases as market costs force you to raise your prices –another positive impact on income.
Prioritize your tenant retention efforts. Your time is valuable, and you can’t be everywhere at once, so be smart about retention and know whom to focus on. How can you determine the ‘retention value’ of a tenant? By categorizing your tenants into a risk/revenue matrix like the one above, you can see which residents will benefit the most from your retention efforts.
Tenants are divided into 3 segments: high, medium, and low lifetime value. Focus your efforts on the high and medium-value group.
High value: Tenants most likely to move out.
Low value: Your most loyal tenants, who will stay with you no matter what.
Once you know which tenants are most likely to move out, you’ll know who to give extra priority to. Concentrate on improving their experience in your unit by pledging to respond to their complaints in a timely fashion.
Use Customer Relationship Management (CRM) software. Implementing customer relationship management will help you organize, automate, and evaluate your retention efforts. Instead of manually keeping track of lease anniversaries and work orders, CRM software will keep everything in one place. With CRM software, you can improve your customer service by keeping track of leases, tenant records, maintenance activity, and all other documents so you can focus on the bigger picture of nurturing satisfied tenants.
Survey tenants and change. Experimenting with a million different strategies to improve tenant experience takes time. Reach out to residents in periodic surveys; they’ll help you identify problem areas where you can improve. Asking for feedback isn’t a sign that you don’t know what you’re doing – it’s a loyalty-generating process in itself, showing residents that you’re committed to their needs. By focusing on excellent customer service, you’re on track to retain tenants and increase your profit.
This Newsletter Concludes our Series on Economics of Rental Retention and How Keeping Residents Happy Drives Profit. We hope you enjoyed breaking down the economics behind tenant retention and how applying strategies to reduce turnover will have a positive impact on your profits, operating budget, and long-term success as a rental property manager.
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