Effective Leasing During the Concession War

Lets be honest, we are all leasing in a concession war. And it’s a war that nobody can win. While rent concessions used to be implemented to boost occupancy, it is now a necessity in order to maintain occupancy. So the question we need to ask ourselves is, how can we use our concessions more effectively?

The answer to this question lies in the mathematics of your conversion and closing ratio. By conversion and closing ratio I mean…

“How many phone calls are you converting into tours, and how many tours are you closing?”

The reason that these two ratios are so important is because this will tell you the optimal place to offer the concession.

Let’s look at it this way. Your concession can only do 1 of 2 things. It can either help get a prospect in the door, or help a prospect who has already toured make a decision. But once the prospect knows about the concession, our best card has been played. Basically, when it comes to using concessions, we only get 1 shot at making them work.

By analyzing our conversion and closing ratio we can decide whether to offer the concession over phone, or at the closing table.

It is best to offer the concession over the phone during the following situations

1. We are having trouble converting our phone calls into tours

2. We have a product that garners very few objections from a prospect

3. Our closing ratio is strong (above 50%)

4. Your property is not along a main road, or near other competitors



It is best to offer the concession at the closing table in these situations

1. We have a strong conversion ratio (above 50%)

2. We have frequent objections to the product

3. We have competitors in the area with similar product.

4. We are struggling with our closing on tours

5. Your property is in close proximity to its competitors

By offering the concession over the phone, we can predict a higher conversion ratio. However, we are then left without any incentive to produce at the closing table. If you are going to play the concession card on the phone, then you need to have a product that will sell itself.

If your product is part of a red ocean (it doesn’t stand out from its competition), then most prospects are likely to visit multiple properties, especially if they are in close proximity to each other. We can then deduct that it is more effective to use the concession as a closing tool rather then a conversion tool. The concession becomes infinitely more effective if we can value sell the property prior to offering the special.

Or try looking at it this way. If I can get a prospect on the fence at market rent, the reduced rent incentive will surely pull them onto our side of the fence.

No matter how you use the concession, make sure you have analyzed your conversion and closing ratios, and made an honest assessment of your product. Based on these factors, we can determine whether to give out the special over the phone, or in person.

Marketing to Gen Y

They are called echo-boomers, or Generation Y. They have also been called “the unreachables” by many marketing experts because of their resistance to traditional advertising. But however you label them, Generation Y demands your attention. Their numbers (75 million) rival that of the Boomers. Their skepticism towards media and advertising rivals that of Generation X.

Generation Y is coming of age during the communication revolution. Let’s face it, the internet has changed the way we live, work, and communicate. While Gen X grew up with a remote in their hand, Gen Y grew up with a mouse.

To fully understand how to market to Gen Y, we must first understand the implications of growing up in the communication age.

First, Generation Y is used to a free-flow of information. While Boomers make their decisions based on gut feelings, and Gen X’ers make their decisions based on product value, Gen Y makes purchasing decisions based on Word of Mouth and consumer reviews.

Think about how much we communicate now because of social media, cell phones, and email. Before cell phones and the internet, did you talk to anyone outside of your physical proximity? Maybe you talked to 1 or 2 people per day on your phone. Maybe you got a letter from you Aunt and Uncle in the mail. But the internet and cell phones have allowed us to drastically increase the number of people we communicate with on a daily basis. Because of email, blogs, Facebook, cell phones, Twitter, etc., Generation Y is in constant contact with their peers.

What makes Generation Y choose a product is based almost completely on Word of Mouth. If people are doing it, and the feedback is there, they will purchase.

The new way to advertise is not to get your message out, but rather to open a dialogue. Communication is what Generation Y is looking for, and communication is what will drive customers your way. While traditional advertising involved blasting your message out as much as possible, this strategy will not necessarily work for the newest group of consumers. Stop thinking about message promotion and start thinking about how to engage your target market into a conversation. Break down the barriers and come out from behind the curtain. And most importantly, understand that negative feedback is not always bad in today’s world. Whether feedback is positive or negative, the important thing is that we are encouraging feedback.

Encourage conversation, encourage interaction, and encourage communication. Marketing is no longer a monologue.

11 Free Tools for Social Media Optimization

Social Media today has a great post listing 11 Free Tools for Social Media Optimization.
It's crazy to think about how much we don't yet know about Social Media and Search Engine Optomization. This post really drove home that point for me as I realized that I had only heard of less than half of these sites.

Needless to say, I will be spending the rest of my downtime surfing through these links.

HT- Justin Coleman

How to be great at Social Media Marketing

Just found this article on Twitter thanks to Hubspot. It's a great little read about how to become great at Social Media Marketing.