Referrals play a huge part in influencing the purchasing decisions of consumers in the United States. This applies whether you are selling t-shirts, renting apartments, or trying to sign up extra people to a mailing list. Word of mouth works and it performs best when the person sharing the message is someone that an individual trusts.
Why Resident Referrals Work for NYC Apartments
Take a second to consider the last time you made a major decision. If you’re like most people, you likely reached out to family or friends to get advice. Maybe you heard a coworker exclaiming pleasure about a new company and decided to check them out – only to later become a customer yourself.
This is how referrals work and it isn’t just something that’s suited for retail stores. It can also be put in place for your apartment buildings to ensure max capacity and revenue. It’s an exceptional form of marketing that costs little but offers great returns.
So why does this kind of marketing work so well? Because a referral is coming from someone who we know and trust, rather than being an advertisement from another of many companies who are trying to bring in money and create success. When someone chooses to recommend an apartment (or any other product), it tends to come from an authentic place.
The issue with that is that it’s entirely qualitative. Knowing other people’s experiences isn’t a bad thing, but it doesn’t delve into how it works as far as the numbers go. Maybe this is why so many companies take this kind of marketing with a grain of salt and don’t implement it.
The Numbers Don’t Lie
However, once you see the numbers around personal referrals, that might change the way you see things. Nielsen’s Harris Poll Online ran a survey with about 2,000 American’s asking questions about referrals and word of mouth marketing. The results fill in the number gaps and show that personal referrals are more important than many might think.
The research shows that:
- One of the most important things involved in scaling and increasing referral activity is an incentive structure.
- Word of mouth works in all industries, not just ecommerce. It also works with all demographics, although some income levels and ages of people are more likely to respond to a referral.
- When a person talks about or shares something from a brand on social media, there is a major correlation to others purchasing from that brand.
- Most Americans (over 80%) will seek out recommendations before they make any kind of purchase.
While this is just a sample of what was found from the survey, it says a lot about how marketing today works. While businesses are going to advertise in as many ways as possible, forgoing referral programs is not recommended since they can be highly successful.
Reasons to Implement Resident Referral Programs
The best way to keep your apartments full and ensure you make the most money is by optimizing your marketing techniques. This is precisely why property owners should take another look at resident referrals. While it might seem like a referral program is a bit outdated, you’d be surprised how social media has made this type of marketing explode.
So what are the benefits of resident referral programs? There are tons, but a few of them are listed below.
It Creates Specific Expectations
When you speak to a resident and ask them to refer a friend or family member to apply for an apartment in your building, it shows that you are serious about your company working with your residents. This immediately creates an exciting emotion for the resident since they feel as if they are a part of the team and capable of creating a community with your company.
Once the resident feels that kind of excitement, it will show when they do refer someone to apply. This means that prospective tenants are coming into the building with a positive perception of your brand and what you do. When someone comes in excited about what you’re doing, it’s much easier to get them to sign a lease.
It Costs Your Company Little Money
How much do you typically spend on marketing? The number is probably a lot higher when you’d like. The good news with resident referrals is that the marketing solution costs much less than other options. The actual cost for someone to call up a friend and recommend your brand is exactly zero. It’s pretty hard to beat that with other marketing types.
There’s no need to make a phone call, send out brochures about your property, or pay someone in sales to visit a potential tenant. Word of mouth can powerfully drive sales if your business chooses to take advantage of it.
After you decide on the way you want to build your referral program, you can continue to bring in new tenants without spending a cent. The only expense that will come into play is if you choose to have a rewards program to convince tenants to recommend your properties. Even then, it’s going to cost much less than other solutions.
It Helps You Close Sales
With your other marketing solutions, how many sales calls and leads do you need to get in a new tenant? Do you wish that number were lower? Based on information from the Huffington Post, a business will see up to an 80% closing rate when a strong customer referral is made. So, not only can you spend less on marketing, but you have a better chance of making additional money.
What happens with cold calling? A 1% closing rate. When a client calls in, that number jumps to 15 to 30%, but that is still much lower than the 80% from resident referrals. As any business owner knows, the closing rate is something that can always be improved on. Making the effort to implement a resident referral program can skyrocket your success and keep your apartment full.
It Proves Your Property is One of the Best
When you offer fantastic apartments or condos at a reasonable price point, residents are more likely to send referrals to you. 83% of those who have positive experiences in your apartments are going to be happy to recommend your brand to others in the community.
When a resident refers someone and they choose to move to your complex, it proves that you know what your residents are looking for and are providing exactly that. Resident referrals are also a great way to ensure that new tenants trust you more than the average person who moves in.
It Keeps Tenants Loyal to Your Property
A study was done recently that shows that customers who opened a bank account using a referral were nearly 20% more likely to stay at the bank than customers who didn’t come in based on a referral. While you aren’t offering banking services, the same idea still applies.
When people come into your apartment building based on a referral, they already have the information they need. They know how well the buildings are kept up, when they can contact a manager, and what features to expect in their new apartment. The resident doing the referral will typically provide all of this information, so the prospective tenant comes in knowing that your apartment meets their needs.
It Reminds Current Tenants Why They Stick With You
When a resident makes a call or posts on social media telling friends and family members to move into your building, it serves as a reminder to the tenant about why they choose to live there. This can increase loyalty for current tenants and keep your apartments filled longer than before. Everyone has a reason they choose a certain dwelling and providing referrals is a great way to get tenants to remember that.
Regardless of what that reason is, sharing it with others may make them remember how happy they are and keep them at the building for an extended lease. It provides affirmation that your company offers quality, value, and amenities that can’t be beaten.
It Feels Flattering to Existing Tenants
When someone asks for a favor, it can feel flattering. It shows that they care enough about you to want you to help them. When you choose to ask residents to refer a building to friends, it’s a compliment that shows you know they have weight in their business and social circle. It also says that the tenant is such a fantastic person that you want more people like them in your property.
On the flip side, when a tenant refers your company to someone else, it shows that the person being referred has an opinion that is valued in the company. As such, the tenant feels even better when they have a chance to refer you to other people around them. This can lead to a tenant who wants to make even more referrals.
It Leads to Repeated Referrals
One of the cool things about resident referrals is that once someone refers a single individual to your property, they often go on to refer others. Having an incentive provided when someone moves in is part of that, the other part is a tenant knowing they’re influencing those around them. When people they enjoy spending time with move into the same building, it creates a community that everyone can enjoy.
Also, once a new person moves in, they might refer to you, too. If each tenant refers a few others, you’ll never have an issue keeping your building full. This creates more revenue and decreases the need for other forms of marketing. Each new resident becomes someone who may refer your apartment to others for an ever-increasing marketing strategy that costs next to nothing.
The Easiest Apartment Referrals in New York City
While there are tons of ways to set up a referral program for your residents, many of them are time-consuming and can be frustrating. That isn’t the case with Cityhive.
Cityhive offers a program where landlords and property owners can quickly fill vacancies in their buildings by asking residents to refer friends and family members to the property. It gets even better because both the property owner and the tenant are rewarded during the process. Tenants get incentives for their referrals, while the building gets filled so the apartment makes more money.
Curious how it works? It’s way easier than you’d ever expect. As a landlord, the first step is to sign up. Once you’ve done that, Cityhive offers you all sorts of options to ensure your apartment buildings are always bustling with activity. The simple to use platform allows you to:
- Register vacancies that need to be filled
- Manage leads for apartment vacancies
- Create incentives that your current tenants will love
- Ask for referrals through word of mouth, social media, and more
- Notify residents about vacancies, incentives, and other information
The reason Cityhive works so well is that it’s simple to use. Even those who aren’t particularly tech-savvy can make an account and get started in just a few minutes. It also helps that you can offer current tenants incentives for referring someone to move into the empty apartment.
What kind of incentives can you offer? That’s up to you. Some of the most popular options include discounts on rent, gift cards, or even cash. The sky is the limit so you can truly customize the incentives to meet the needs of your tenants. When tenants know they’re getting something out of a referral, they’re more likely to spread your name around.
What are you waiting for? Right now, a lot of landlords are dealing with empty apartments but it doesn’t have to be that way. If resident referrals are something you’re interested in (and it should be!), you can sign up for an account at Cityhive right now. Upload your vacancies, pick your incentives, and send out emails to your tenants! It’s an easy way to stay at max capacity, keep marketing costs down, and bring in more money!
Sources:Back to Blog