I’d like to take a moment to talk about a piece of the demand management platform that often doesn’t get much attention—handling the initial prospect call. Specifically, I’d like to make the case for using a professionally-run call center (full disclosure: I am on the Board of, and an investor in, Anyone Home though I like to think of that as “putting my money (and time) where my mouth is”)

So as not to bury the lede, I’d like to ask you if you would be attracted to a solution with a proven track record of raising RPU (revenue per unit) by 150bps? Okay, that’s the kind of “salesy” question meant to get your attention since there’s clearly only one logical answer to that. However, those of you who know me, know that I’m educated as an engineer and I don’t make claims like that without solid, proven test data. Though not necessarily well publicized, that very specific data exists.

Several years ago, when I was a senior executive at Archstone, I ran a project where we put 20 “test” communities on a third-party “all calls” platform and compared them to 20 pre-selected “control” communities.

• All communities were in Los Angeles, San Francisco and Washington, DC metro areas (not all in the core Commercial Business Districts of those MSAs)
• There were roughly 7200 units each in the test and control groups
• The test ran for 9 months

Candidly, I went into the test a bit of a skeptic. I thought “How could a third-party agent, located hundreds or thousands of miles from the property, possibly outperform our well-trained, local and knowledgeable leasing team?” But having created a well-designed test, I was ready to let the data speak; and wow, did it ever speak loudly!

At the end of the test period, the test properties grew revenue 150bps MORE than the control properties! The key driver of this performance was an increase in scheduled appointments; the test properties scheduled 26.5% more appointments than the control properties (comparisons were adjusted for prior appointment volumes in order to normalize away any inherent appointment volume differences between the two data sets).

Why were the results so stunningly positive? Here’s my theory:

• First and foremost, all of our prospect calls were being answered by a human instead of going to voice mail. Our own internal data showed that 14% of our prospect calls came after hours, and just north of 40% of all calls went to voice mail (hopefully due to leasing associates touring prospective residents or otherwise being engaged with customers or residents, rather than just letting calls go to voice mail—though truthfully, we had no way of knowing).
• The call center associates were trained, experienced and focused on one thing and one thing only—scheduling tours. That specialization outperformed our leasing associates who were more generalized (the proverbial “jacks (or jills)-of-all-trades but really masters-of-none”). It’s worth noting that this then allowed our leasing associates to specialize more on converting tours to leases thus improving lease conversions.
• The call center environment created a more consistent prospect experience and we were able to monitor performance better, both to intervene where KPIs were poor and to celebrate where KPIs were strong.

I’ve since learned that contemporary sales “best practices” embrace a three-tiered approach to sales:

• Marketing generates leads
• Sales development representatives (SDRs), who work in an inside sales role, take marketing qualified leads (MQLs) and work them to be sales qualified leads (SQLs)
• Sales associates, usually in the field, take SQLs and work them to close (or loss)

The division of labor and expertise into these different roles has proven to increase both the effectiveness (closing rates) and efficiencies (sales cycles and costs) across multiple industries over multiple years.

Implementing a call center approach like we did at Archstone was simply implementing this best practice, even though we didn’t really think of it that way at the time (I only learned of prevalence of the SDR approach after our test). The call center associates are our SDRs, taking those marketing leads and converting them to SQLs that are ready for our leasing associates to work.

Think about that. You’ve already spent the big bucks generating the lead. So why not invest the little bucks to make sure the leads are well cared for and turned into SQLs? The payoff is 150bps of revenue improvement!