The recession is bad news for just about every sector of business, and property leasing is no exception. But before you rush to slash your marketing budget as a cost-saving move, consider that good marketing may be the key to keeping your business afloat. Your tenants are out there, and with careful marketing you can find them.
Rather than dream about high rents and low vacancies, focus on a plan to survive the recession. That means offering great value and making sure people are hearing about what you have to offer-in other words, keep marketing.
"If you need traffic, you shouldn't cut your marketing budget," says Kate Good, professional speaker, marketing solutions expert and partner on the Apartment All-Stars tour. Instead of keeping your current marketing program, look at changing it up and marketing more intelligently. Good suggests starting with the tenants already in your properties. "The least expensive strategy is to market internally and close the back door."
So while it's critical to study your market and know which promotions are luring tenants, it also makes sense to devote some of those perks-a couple of months free rent or a new flat-screen TV-to your existing clientele. It seems counterintuitive to give discounts to the people who are currently underwriting your revenue stream, but if you increase your retention rate you'll be solving your vacancy problem without the turnover costs associated with moving in a new tenant.
When it comes to reaching out to prospective tenants, be selective. Figure out who is already drawn to your properties and find more of them. Good uses this example: If you notice that your community appeals to active seniors, invite the local bridge club to meet for free in your clubhouse. That way, more people in the target market will see your property, and word will spread.
"Don't try to be all things to all people," says Good. "Identify the kind of people who like your community, find out where they are, and figure out how to attract them. You're saving money by reaching out to a smaller audience, but it's the right audience."
Even with changes to your marketing strategy, don't do away with all of your traditional marketing.
"Print drives traffic to the Internet, so make sure you keep those ads out there," says Good. And you have to do it year-round. "Renters pick up the apartment guide in February or March even though they might be renting in June or July. If you pull your ad in February because you're not getting any traffic, you've lost an opportunity for residual traffic later. I don't pull back on advertising until I'm full, and most people aren't full right now."
Next, consider changing your pricing model. Instead of charging the same rent for every two-bedroom unit, for example, charge more for the unit at the end of the hall with more windows, or the unit with new carpet.
There are two advantages to this strategy. First, you can make more on your premium units. Second, if the least expensive units sell first, then your best units will be available for display during the peak of leasing season.
"If you're charging a flat rate, your best units get cherry picked," says Good. "You want to have that more desirable unit-with the higher price tag-available when you have higher traffic."
Slashing your marketing budget isn't the right response to the recession-changing the way you approach marketing is