Introduction

Automation is a term that has been thrown around a lot lately in multifamily (a lot of times by yours truly: See exhibit A).  Furthermore, I have pushed the idea of a 'Humans + Machines' workforce where humans and machines work together to create new workflows, but that is just the beginning. Adding a digital workforce to work alongside your team is the basis for a virtuous cycle of success. From increased NOI to attracting more owners to managing more properties, the digital workforce can change multifamily's economics.  

What is a Virtuous Cycle?

A ‘Virtuous Cycle’ is when one success leads to another, and then another, in a repeating loop. Before we jump into the Multifamily Virtuous Cycle, let’s take a look at Netflix’s Virtuous Cycle.  

Netflix Virtuous Cycle

Here is the Netflix Virtuous Cycle as explained by Netflix CFO David Wells:

Let’s break it down.

1. Netflix invests in producing more shows.
2. With more shows there is more variety, which means there are more watchers.
3. More watchers means more talkers. This leads to more subscribers.
4. More subscribers generate more revenue.
5. With more revenue, Netflix can invest in more shows.
6. And the cycle continues.

As you can see, the cycle fuels itself for future success. By creating more shows, Netflix will set off a chain of events leading to more revenue. As long as Netflix keeps investing in new shows, the cycle will continue. So now that you have seen a Virtuous Cycle, let’s explore how a digital workforce can do this for multifamily.  

How Does it Work for Multifamily?

To create a 'Humans + Machines' workforce, you need to add a digital workforce to work alongside your employees. Once you add a digital workforce to multifamily, you'll discover that you have entered a virtuous cycle.

Increasing the digital workforce will kick-start a positive chain reaction. Ultimately, ending with companies managing more properties. Just like how more shows fuels the Netflix Cycle. Let’s take a closer look!  

Digital Workforce will Increase NOI

The first step in the Virtuous Cycle is to invest in the digital workforce.

Adding a digital workforce lowers personnel and operating costs. One ‘digital worker’ can do the work of 100 people when it comes to repetitive tasks.

For example, an automated nurturing drip campaign can follow up with all of the leads at once. An agent can only follow up with one lead at a time.

By enlisting the help of a digital workforce, employees can work smarter not harder!

The digital workforce can handle time-consuming tasks. Giving agents more time to cultivate relationships with leads. Better relationships will lead to more leases and revenues.

To recap: A company can decrease personnel and operational costs and increase revenues by building relationships with leads. By definition, its net operating income (NOI) increases.  

Increase NOI will Attract More Owners

With an increased NOI, the company can deliver owners a higher profit margin and more competitive bids. More competitive bids attract more owners.  

More Owners will Increase Revenue

When you attract more owners, you get more properties to manage. More properties means your company can earn more money.  

Increased Revenue will let you Invest in the Digital Workforce

With more money, you can reinvest in the digital workforce. And, the cycle keeps going!  

Conclusion

Investing in a digital workforce gives your company a way to keep costs low while you grow. You can see how adding a digital workforce can put your company in virtuous cycle:

1. Invest in a digital workforce
2. More digital workers increase NOI
3. Higher NOI attracts more owners
4. More owners give you more properties to manage
5. Managing more properties enables you to reinvest your the digital workforce
6. And the cycle continues!

Now that's how scaling operations using a 'Humans + Machines' workforce can help you become a leader in the multifamily Industry. What barriers do you face when it comes to adding a digital workforce?