Is lease conversion the atomic particle of the multifamily marketing universe? Yes!
Traditional leasing measurements like lead volume and lease conversion are facing extinction, being supplanted by new technology that shifts the leasing paradigm toward more granular, actionable metrics.
RealWorld 2017 panelists said the data science of revenue management is the future of multifamily. The systematic approach involves measuring the quality of inbound leads and comparing them to leasing outcomes. There, marketing and sales effectiveness can be accurately measured.
“We believe it’s possible to get more granular and actionable information by splitting the atom,” says RealPage Senior Director Leads and Leasing Product Management Caleb Winn. “We do this by measuring the quality of inbound leads when they hit the system. It’s using data science to algorithmically score each lead as it comes in.
“By measuring the quality of inbound leads and comparing that to leasing outcomes, we can finally isolate marketing and sales and measure them separately.”
Predictive analytics are transforming multifamily
Panelists showed how data science measures lead quality, how predictive analytics are transforming the way we understand the business, and how crafting a quality-adjusted demand-optimization strategy can deliver dollar-measurable return on investment.
The ability to evaluate lead quality generated by sales and marketing based on statistical evidence − and to forecast future behavior based on that evaluation − improves business intelligence and decision-making, Winn said. While lead volume may seem effective, quality leads which lead to leases ultimately determine the true effectiveness of marketing efforts.
In short, a bucket full of leads doesn’t always mean that marketing has been a success.
“Our job is to attract and make people aware, and compare,” says Mary Herrold, JVM Realty Corp.’s vice president of marketing and innovation. “You need volume but you need the right customer. You can pop a lot of junk leads into system that aren’t going to do you any good in long run, but this is about the right customer at the right place at the right time.”
More accurately measuring the effect of marketing versus sales
Rich Hughes, RealPage senior vice president asset optimization, said that by comparing the quality of inbound leads and to leasing outcomes the industry can more accurately measure the true effect of marketing versus sales.
Splitting the atom of lease conversion requires robust scoring of lead quality at entry, continued tracking throughout the leasing lifecycle, reconciliation to leasing outcomes and comparison against benchmarks.
Algorithms predict future behavior based on past performance of similar data sets
The process works based on a complex algorithm based on Bayesian statistical theories around predicting future behavior based on past performance of similar datasets. Lead scoring factors in various predictive factors like phone information, email information, guest card content, rent needs, need-by date, work and apartment geo-mapping and call duration time.
Each lead is compared to millions of records to find a match, considering how similar leads have performed in the past to predict behavior. The lead is constantly rescored as new information is obtained.
‘This is really the future of bringing together the entire leasing equation’
The future of leasing will depend advanced forecasting, targeted demand generation and workflow optimization. Things to consider include lead scores and business policies, available inventory ceiling, when it comes to data big means big.
“We think there are implications over the next few years to take this data science forward to more impactful levels,” Winn said. “This is really the future of bringing together the entire leasing equation of pricing, marketing and sales.”
Thanks to Rich Hughes, Senior Vice President Asset Optimization, RealPage; Caleb Winn, Senior Director Leads and Leasing Product Management, RealPage; and Mary Herrold, Vice President of Marketing and Innovation, JVM Realty Corporation for their insights!