What is your property’s growth strategy? As a property manager or owner, your initial instinct may be simple: We want to reach and stay at full occupancy. What more do we need to know? But every successful business needs a growth strategy to reach their goals. Your property is no different.

There are a few different types of strategies businesses can choose from, based on the product or service they provide and their end-goals. These include:

Market penetration—Where the company tries to create more sales to existing customers without making changes to the product, through tactics like lowering prices, increasing advertising, etc. This approach risks profit in the short-term to reach further and gain more market share.

Market development—Where the company identifies new markets where they can develop their product or service.

Product development—Where the company offers a modified or new product to its current market.

Diversification—Where the company goes in a completely different direction than its current business model—providing a diversified offering to its current market.

Considering the multifamily industry, there’s a limit on how many ways a growth strategy can be developed. After all, your market really is limited to the area and community around the property, and the goal ultimately isn’t to add to or completely diversify your current offering. You also aren’t likely to change a property so much it appears new to the market, such as going from a C-class to B-class property. So, that leaves us with market penetration.

According to Entrepreneurship.org, developing a market penetration growth strategy requires you to “identify ways to eliminate internal barriers to sales, and increase promotional and sales efforts to sell more to current customers or to sell to new customers in your current target markets. Keeping current customers satisfied is much easier and less costly than finding and cultivating new ones.”

Utilizing this approach with the end goal of getting to and staying at full occupancy, your strategy include the following:

• Identify barriers—What are the potential issues currently keeping you from reaching or staying at occupancy? This should include barriers to reaching new tenants as well as barriers to keeping the ones you get.
• Promotions—Where are you currently advertising and what are your marketing efforts like? Do you have a website? Are you interacting on social media? Are you involved in community outreach programs that put your property in front of your target market?
• Selling to current customers—As the explanation says, keeping current customers happy is much easier and less costly than recruiting. So, your plan absolutely must include the ways you are actively going to go about doing so. If your barriers to keeping tenants include property upgrades, communication breakdowns, parking issues, or lack of amenities, your short-term risks to profitability may include addressing those needs. However, the long-term benefits can be greatly rewarding.

The ultimate goal with a market penetration growth strategy is to ensure a property can effectively compete head-to-head with incumbent properties in the market. You’ll find that once you’re acutely aware of the struggles you face and have ways you can address them, it’s much easier to be strategic in your plans for the future and handle everyday business.  

As Naveen Jain, business executive and entrepreneur is credited with saying: “Success doesn't necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won't win a game or a battle; the win comes from basic blocking and tackling.”