TO PARAPHRASE AN OLD QUESTION: If prospective residents call and nobody hears them, do they still make a sound?
Property managers know that missed calls are missed revenue. Yet
the typical property misses nearly half of the calls coming in to
the leasing office. That's why 24/7 call centers
like those offered by Carrollton, Texas-based RealPage and Greer,
S.C.-based LevelOne are becoming such a popular option.
“In the past, we probably only answered about
50 percent to 60 percent of the calls during the day,”
says Donald Davidoff, group vice president of strategic systems for
Englewood, Colo.-based Archstone, which switched to a call center
in early 2010. “And about 12 percent to 14
percent of our leads came in afterhours. If they
didn't call back the next day or leave a
message, we lost them.”
Similarly, Essex Property Trust implemented a call center last
year for all of its prospective resident calls and credits the move
with helping push its portfolio-wide occupancy levels to the
high-90 percent range, despite the trials of the Great
“We've seen an increase in
traffic, and we have better close ratios now,” says
Michael Dance, CFO of the Palo Alto, Calif.-based REIT.
“And over time, we may be able to reduce the
number of sales associates on staff.”
Outsourcing to call centers, however, is only step one.
Tech-savvy multifamily firms also are carefully tracking which
advertising mediums prompt prospects to call the leasing center:
Did they hear about the apartment community through print
advertising, an Internet Listing Service (ILS), Craigslist, even
Facebook? The strategic combination of call centers and lead
tracking is a surefire way to maximize advertising dollars and
boost occupancies and rents, which is more important than ever in
today's tough economic climate.
Information is Power
An effective marketing campaign will lead prospects to call your
leasing office, and call centers are often the best tool to ensure
that no calls go unanswered. But call centers
aren't just about building occupancy and
reducing site staff. More leads can mean more pricing power too,
even when there are no units left to lease.
Archstone implemented LevelOne's call center
for all of its 178 properties earlier this year and is now
capturing about 98 percent of all calls. The company ran a test
last year at 20 of its properties (comparing against 20 nearby
control properties) to measure the effect of pairing the call
center's extra leads with its revenue management
In the process, it was able to overturn a hoary old chestnut of
conventional thinking: Extra leads at a fully-occupied property
mean nothing. Archstone was able to improve per-unit revenue by 1.5
percent at its occupied properties based on the new demand curve
generated by the combo of LevelOne and revenue management software
data. That doesn't sound like much, but at a
250-unit community with average rents of $1,000 a unit,
that's an extra $45,000 annually. The cost to
use LevelOne's call center at such a community
averages $9,600 annually, resulting in a return on investment of an
astounding 468 percent.
The results are even more impressive when you factor in the
test's time line of January 2009 to September
2009, a tough rental environment for most apartment owners.
“If it was an up market, we
would've been able to raise revenues [even]
more,” Davidoff says.
Call centers, though, handle more than just phone calls: They
also offer 24-hour e-mail response services. Like many multifamily
managers, Burke, Va.-based Van Metre Apartments, which uses
LevelOne, sees its highest level of website traffic after 7 p.m.
But for those firms that don't use call centers,
e-mails sent after 7 p.m. likely sit unopened for at least 14
hours, maybe longer. And the chances of closing on a qualified
prospect decrease every hour that contact isn't
returned, says Carissa Barry, vice president of marketing for Van
Metre, which owns and operates about 2,400 units, most of which are
located in Northern Virginia.
“If you're a smaller
company, you're at a competitive disadvantage by
not following up on your e-mails quickly, especially in a day and
age when most consumers do their research online,”
Barry adds. “The AvalonBays, Archstones, Camdens
all have a call center, so everyone is now available 24 hours a
day, seven days a week.”
Still, not every company is sold on the benefits of outsourcing
the call center. A couple of years ago, Camden Property Trust began
using RealPage's call center for its after-hours
calls, and considered going full-force with it. But the company
wanted to have greater control over the process. So in 2009, Camden
rolled out a 10-person internal call center, saying that it feels
its own employees could sell—and
cross-sell— apartment units to prospective
residents better than a third-party vendor.
Camden's call center is open from 7 a.m. to 7
p.m.—when about 90 percent of the
company's call volume is received. It still uses
RealPage to handle that additional 10 percent of calls coming in
“We looked at outsourcing it, and from a cost
perspective there really wasn't that much
difference,” says Dennis Steen, CFO of the
Houston-based REIT. “But we felt that it made
better sense to have our own employees man the phones. We want
someone who, if they can't lease one unit in one
submarket, could refer the caller to another community down the
Yet those who champion outsourcing say that knowledge is easily
transferred. Multifamily firms using LevelOne, for instance,
provide the vendor with a “product
knowledge” packet, which details all of a
property's features and allows the property
owner/manager to privilege which points should be highlighted
“LevelOne is as good as the information that
the management company provides them,” Barry says.
“That product knowledge packet is very in-depth,
probably 20 pages long.” The packet is a living
document that can change as the property changes.
“We just installed wireless hot spots at one of
our communities, and if we want them to highlight a new feature
like that, we can change it on a whim,” Barry
One criticism of outsourcing, from Camden and others, is that
the information used by the third-party is isolated to each
community. As Steen points out, cross-selling can be an important
sales tool, yet third-party call centers are more focused on
pushing the merits of the one community mentioned by the
But LevelOne is working on it. The company will soon roll out an
expanded product knowledge kit that includes more
“sister property” information.
“It won't be such a
silo,” says Ben Holbrook, vice president of sales for
LevelOne. “We're going to
mirror what they do on site which is, if they were about to lose
the lead based on price and availability, we'd
be able to transfer the conversation to talk about a sister
Following the Lead
In many ways, call centers are all about maximizing advertising
dollars. Multifamily companies spend on average about $170 per unit
annually in marketing
costs—that's more than
$50,000 a year for a 300-unit property. After spending so much to
create community awareness, those dollars are wasted if nobody
answers the call or e-mail.
But an equally important consideration is measuring any single
ad's effectiveness. After all, there are many
different ways to get the word out—ILSs,
Craigslist, traditional print advertising. But which gives you the
most bang for your buck?
It's not always easy to figure out just what
advertising source is responsible for driving a prospect to your
community (see “Traffic Control” on
opposite page). Often, a call center will start a guest card for
each prospect who calls, noting the advertising source that brought
in the prospect. But when the guest card is completed on site, the
source will change, either because the prospect forgets or the site
staff simply forgets to ask.
A study conducted by LevelOne last year outlined that disconnect
in a white paper, which matched the call
center's guest cards with its
clients' rent rolls. The study found that the
advertising source listed on the lease was wrong about 70 percent
of the time.
“All of these systems rely on a human
element,” says John Helm, founder of San
Francisco-based ILS MyNewPlace. com. “The
consumer sometimes doesn't know or care, and the
site staff's trying to close the deal.
They're not going to interrogate someone about
how they found the community.”
Like the rest of the ILS industry, Helm has struggled with
tracing the leads that began on his site all the way to a signed
lease. Spurred by the LevelOne study, Helm and his staff combed
through more than 200,000 records from his biggest clients to
determine the most accurate return on investment.
MyNewPlace found that, on average, its clients were spending
about $275 per lease. Armed with that information, MyNewPlace
decided to create a new pricing model. The firm now guarantees a
$275 lead-to-lease cost for its clients. If it
can't give an average cost of lease of $275, it
will give its clients a credit.
“We rolled out the guarantee program to tell
the customers, ”˜Look, the tracking data in your
property management system is flawed. We're
highly confident that our leases close, and if
you'll let us prove it to you,
we'll refund you if we don't
come in with a certain cost-perlease
number,'” Helm explains.
Some management companies remain skeptical of the effectiveness
of ILSs, however. One criticism is that in the most competitive
markets, you have to pay for a more expensive premium listing, or
you'll get buried.
Van Metre recently cancelled its ILS listings with a few sites
after analyzing its return on investment. The company budgets about
$250 per lease for stabilized communities in its advertising budget
but found that while the costper- lead was spot-on, the
cost-per-lease was hefty. The firm spent about $1,350 to advertise
one of its communities with a premium ILS listing and found that it
generated about 34 leads in July, just $40 per lead. But those
leads resulted in only two leases, a whopping $675 per lease.
“A lot of firms justify their advertising cost
by the number of total leads they get in but not the number of
closes,” Barry says. “But at the end
of the day, I'm looking at my numbers, and if
I'm over $250 per lease for any given
advertising source, then it makes me stop and think
twice.” At least Barry can sleep well at night knowing
that, thanks to a call center, no leads are going unanswered.