Untapped Arbitrage: Resident. September 23 25, 2013 Turnberry Isle Miami

Transcription

1 Untapped Arbitrage: Resident Satisfaction September 23 25, 2013 Turnberry Isle Miami

2 THE RESIDENT JOURNEY Prospect Resident Ambassador (Shops) (Surveys) (Reviews)

3 MEASURING THE RESIDENT JOURNEY Measuring the Customer Experience Through Stress Points Lead Conversion Move In Service Pre-Renewal Move-Out

4 HOW RESIDENTS FEEL 35% 30% lty Score stomer Loya Cu 25% 20% 15% 10% 5% Honeymoon Disengagement Reconnection Stage Stage Stage 0% Months Into Lease * Across Ellis Portfolio Customer Loyalty Score

5 EXPERIENCE TO BEHAVIOR RELATIONSHIP Define Your Customer Experience Define A Reliable Metric Define Desired Customer Behavior Correlating the Experience with Desired Behavior

6 3 DIFFERENT EXPERIENCES 3 DIFFERENT BEHAVIORS Apartments Customer Experience Loyalty Likelihood to Renew Translation Great Good Poor Most Loyal Fans Satisfied Fans Not a Fan 80 85% 60 65% 20 25% Willing to May Pay Will Not Pay More More Pay More

7 3 DEMAND CURVES

8 UNDERSTANDING SENTIMENT

9 CREATING VALUE FROM FEEDBACK ActionPlanCommentDataGrid Comment Score % Unfortunately I can't control my neighbors, but the sometimes constant smoking from downstairs neighbors and forcing us to close our windows is a bit of an irritation. It would be nice for non smoking groups of apartments or only having 4th floor tenants be able to smoke so there is no one above them or having the smoking tenants not be able to smoke on their patio. Seeing other local apartment complexes having no smoking at all is a huge interest in where I would want to live. It looks nice on outside, but service issues made it less than enjoyable. The only thing I am having an issue with is smelling smoke throughout our apartment when neighbors smoke. I would prefer a smoke free complex, or at least smoke free sections where I am able to open my own windows and door without worrying about smoke I'd love to continue staying at Main Street (as it is a safe environment, and I like my apartment unit a lot), but I'm scared to death that when my lease is up, the leasing office is going gto try to gouge g me by trying to increase my monthly rent for my next lease by a couple hundred dollars. I have to have my windows closed all the time because the neighbor below is a chain smoker and smokes in the balcony. I know Irvine does not have any regulation to restrict it (unlike Laguna Hills) but if there could be a schedule worked out so I could enjoy the outside certain hours it would be great.

10 CREATING NEW PRODUCTS Assumptions Maximizing Rents Total Apartments 481 Increased Yearly Smoke Free Apts. 96 Revenue $115,000 Additional Monthly Rent $100 Additional Asset Cap Rate 7% Value Generated $1,645,700

11 KEY TAKE AWAYS 1. A great customer experience creates leverage a) Allows you to choose to turn units or retain residents 2. Feedback allows you to create new products a) Allows you to target highly loyal residents b) Allows you to enhance value

12 What is Resident Satisfaction and How Is It Measured? Resident Satisfaction is the notion of meeting / exceeding residents needs by the products and services you provide Resident Satisfaction vs Resident Loyalty Measured at different parts of the resident life cycle l via surveys just after move in, # of months prior to lease expiration Surveys can be many questions or few questions don t over complicate or create surveys that take too much time

13 Meaning Behind Customer s Satisfaction Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied Loyal Passive Detractor Considered a Marketing Dept in and of itself more likely to return as a customer May not defect until somebody offers them a better deal Account for more than 80% of negative word of mouth comments Likely to leave at renewal time, actively looking to do so

14 Measuring Customer Service Net Promoter Score measures the difference between the percentage of customers who aretotally and completely satisfied with you (raving fans) and those who aren t. Choose the most meaningful question or two from your resident surveys and subtract the Passive and Detractors from the Completely Satisfied and come up with a score.

15 Satisfied is Not the Same as Loyal Loyal Very Satisfied Only Loyal to 1 Company in an Industry Relationship Based Exceeded Expectations Emotional Ties Loyal Enthusiasts How s Your Apartment? I love it You should live here Passive - Satisfied Many Companies could Satisfy you in an Industry Arms Length Met Expectations Business Connection Unenthusiastic Customers How s Your Apartment? It s fine Good Good.

16 The Value of Customer Loyalty Referrals Loyal Residents refer more new residents Retention Loyal Residents have a higher retention rate than others Revenue Loyal Residents are likely to pay higher renewal rates and negotiate less at time of renewal.

17 For More Information Please Contact: Donald Davidoff D 2 Demand Solutions, Inc. donald@imaginellc.com Francis Chow Ellis, Partners in Management fchow@epmsonline.com Dave Romano Equity Residential dromano@eqrworld.com #AptRevenue AptRevenue.com