Just before a 29-year-old friend of mine was due to stay in a fairly upscale hotel recently, the staff texted her before check-in and suggested that she join the loyalty program, hinting that it would be beneficial during her stay.   

She did, and the hotel upgraded her to a suite instead of a room and also gave her a card for a free glass of wine. My friend was thrilled and the hotel earned a customer for life. 

They accomplished that by making her feel like she and her hard-earned money were valued. My friend, who is a millennial and a journalist, isn’t making a lot of money now, but her income is likely to increase in the next few years. When she can afford that suite herself, she’s very likely to book at the same hotel. 

2019: The year of loyalty in multifamily? 

So, why am I sharing this story? In 2019, I believe that multifamily housing (multifamily) should resolve to learn a few lessons about revenue management by focusing on resident loyalty and renewal retention strategies used by the hospitality and travel industries.  

We’ve all heard the stats. The average company spends 5 to 10 times more to acquire a new customer than to keep an existing one. In multifamily, marketing and advertising resources are spent trying to capture new leads, but very little is done once a resident moves in. Most operators allow the site teams to determine the renewal rates, without a lot of input or direction from the revenue manager.  With 50-60% of the rent roll being influenced by renewals, it's time to re-evaluate pricing strategies and how marketing dollars are spent.  

We’ve seen a lot of volatility in 2018, along with softening rent increases. While rent growth in 2019 is forecast to be strong at 2.9%, the prevailing political and economic conditions look more unpredictable than usual.  It seems like a smart move to focus on retention and loyalty, especially in cities and neighborhoods where building has been booming and residents have their choice of apartments. 

Learning the loyalty lesson from lodging 

Let’s go back to my friend’s experience at the hotel for inspiration. As I mentioned, she’s a millennial and the hotel checked in with her via text, which she’d indicated as preferred medium of communication when she registered.  Hotels and airlines have learned that travelers, constantly on social networks and with devices in hand, are increasingly dictating what they want and when and where they want it. The multifamily industry can emulate this by asking how residents would like to have information communicated and giving them multiple options. If residents want to text with a service request instead of getting on the phone (something that people from many different generations now dread), that should be an avenue open to them. 

Remember, tech is a tool. It’s great to capture preferences and data but ultimately, it’s about using the data you have to predict what the resident really wants and backing it up with human interaction. For example, a tenant can log a service request via text, but a human will be fixing the issue in the apartment. If there are issues, the resident should be able to pick up the phone and deal promptly with someone in person. Most importantly, make sure—whether through tech or in person—that the resident’s issue is taken care of, since 35% of people who don’t renew felt they had an unresolved issue.  

Another point to pull out of my friend’s experience: the hotel upgraded her room to a suite (much to her excitement). While the upgrade was a big deal to my friend, it was really just a suite that would have gone unused otherwise—but what’s important is that it felt like a big gesture. On the other end of the spectrum, my friend’s comped glass of wine, which came with a card propped on her nightstand, represents the loyalty generated by the little, everyday things that make residents feel valued.  

The lesson? it’s crucial to make residents feel valued—and it doesn’t have to be a grand gesture. That glass probably cost the hotel $12 or so in terms of bar charges, but that small gesture felt considerate and generous. Likewise, simply offering free coffee and donuts one morning as residents go to work makes them feel positive about the day (and you). Moments like these can build resident loyalty, especially in overbuilt downtown areas where buildings are competing for tenants.  

Finally, a few days after my friend returned home, she received a handwritten postcard thanking her for staying at the hotel and encouraging her to get in touch if she had any issues. It was good customer service because she not only felt appreciated, she also felt like the hotel wanted to make sure she was happy. As I mentioned above, 35% of residents who don’t renew feel like they had an outstanding issue. The takeaway is that follow-up is important.   

Sure, there’s no question that it’s an easier decision to move hotels than it is to move to a new apartment. Still, the stars in hospitality industry have perfected low-cost ways to make their customers feel appreciated while constantly competing for business. The multifamily industry would do well to pay attention—and make 2019 another great one, whatever happens with the market.