In a pre-digital world, the best way to keep track of huge amounts of data was with a filing cabinet: The person opens a draw in a large cabinet, thumbs through the files, which are arranged topically or alphabetically, until they find the right file.
Early Search Engines
The early Yahoo search engine basically worked by treating the internet in the same way—they had an index of all the websites they knew about and then sorted those websites by topics and sub-topics. So, for example, if you wanted to learn about NFL running backs you might go to yahoo.com and then click on the Sports link and then Football and then NFL and inside that listing, you would find sites about NFL running backs.
Google and other search engines blew all that up, of course, by making it possible to simply enter keywords that would then pull up a search results page tailored specifically to the specific search term you used. No more files and sub-files and navigating through a maze of categories.
But this isn't quite what Google was after, long-term. After all, even a keyword-based system is still kind of a filing cabinet--it just has way more files and ways of accessing the files. But if you think of each conceivable keyword a person might enter into Google, you end up with something very like the old filing cabinet, just on a previously unimaginable scale: Here is a file folder and here are all the bits of paper inside that folder.
The Perfect Search Engine According to Google
But the underlying principle of needing to have some kind of category in mind and then needing to select the right piece of information out of a mass of data is still there. The problem, in short, is that this is still a passive system that needs the human user to initiate a series of actions in order for the system to work. What Google wants to create is something active, something that anticipates a person's need and gives them what they want before they initiate some kind of action. That's what former CEO Eric Schmidt said years ago:
“When you use Google, do you get more than one answer? Of course you do. Well, that’s a bug. We should be able to give you the right answer just once. We should know what you meant. You should look for information. We should get it exactly right.”
Google's end game, in other words, has practically nothing to do with keywords. It has everything to do with human users and the specific needs they have that Google helps meet. And this has huge implications for how we should think about search in the multifamily industry.
Moving from Passive Marketing Strategies to Active Marketing Strategies
If you've worked in multifamily for any time at all, you're aware of the various marketing channels that are commonly used in our industry—print listing services, internet listing services, corporate websites, community websites, social media... the list could go on for awhile.
Seller-Focused Marketing Systems
Here's a key idea to keep in mind though: The old way of marketing essentially set up choke points in the leasing process where all your potential residents would converge. So in the pre-digital world, they converged on print guides. In the online world they converged initially on internet listing services and Craigslist and now, more regularly, on search engines. Successful marketing was marketing that made sure your community was present at those choke points. So you needed a listing in print guides, you needed to be on Craigslist, etc.
That sort of marketing is passing away.
What that kind of marketing basically does is it gives most of the power in the transaction to the seller. It tells buyers "if you want to buy, this is the process you have to use and you will do it in these places." So sellers just have to show up and that's more or less it.
Buyer-Focused Marketing Systems
The old approach existed in the way it did for a simple reason: Information was expensive. To distribute information required expensive billboards or radio ads or TV ads or buying a spot in a phonebook classified section or buying pricey newspaper ads.
Because information was expensive, everyone converged on the few places that could make information available in somewhat affordable ways. But in the internet age, information is no longer expensive. It's cheap--extremely cheap. And so pretty much anyone can access and analyze huge amounts of data at very little cost. The result is that marketing shifts away from favoring the sellers by forcing all buyers toward specific choke points and instead favoring the buyers and forcing the sellers to adapt.
The move to digital, then, is much more than just swapping one tool for another. It's a move to an entirely different way of thinking about marketing, a way in which information is cheap and the buyers no longer come to the sellers. The sellers have to come to the buyers.
How to Bring Your Apartments to the Shoppers
When buyers have the power during the shopping process, several things change for apartment communities.
- You can't think primarily in terms of "which marketing channels do I want to use?" Rather, you ask "how are my potential buyers going to find apartments?"
- You can't withhold necessary information. Rent rates, pet policy, amenities... all of it needs to be accessible to buyers online.
- Your online presence should be built around the actual product you sell--individual apartments. So you need photos and videos of every floorplan in your community.
How do your buyers shop for apartments?
According to Salesforce, 87% of product searches in 2018 begin online—that's up from 71% in 2017. So you can forget about print sources.
But where are people going online to find apartments? Well, let's look at the data.
Unfortunately, we do not have access to click-level data from Google which would tell us if people click listing service listings more or websites more on the Google search page. However, we do have lead and lease data for our clients. And if we reason that the leading lead and lease sources probably tell us something about how people search more generally, then we still can form some conclusions about how people are searching online.
What does the data tell us?
We gathered data over a four month window from nearly 50 large properties, accounting for over 30,000 unique phone calls. We were able to know what marketing channel was responsible for the call thanks to extensive use of tracking numbers. For our purposes, "RentVision" leads in the chart below refer to leads that came to the community via one of three avenues—the website, an ad on a Google SERP, or the Google My Business listing. ILS leads are leads that came via a listing on literally any ILS. Here's the data:
Keep in mind we're just trying to figure out how people search for apartments online. We know they're searching online because of that third party data from Salesforce. What this data tells us is that people are finding apartment communities via websites, Google Ads, and Google My Business at nearly twice the rate they are on all ILS's combined.
The lease data tells a similar story. Using the same tracking system, we were able to study lease data from the same group of properties. This data tells us where actual signed leases came from sorted by marketing channel. Here's what we found:
As you can see, there is actually an even more extreme discrepancy here between ILS leases and leases acquired via search, ads, or local listings. Why is that? Well, if a lead comes to your community from Google, it's because they clicked on a link to your website, clicked on an ad to your website, or they used the local business listing for your community. In every case, it is a focused lead who specifically likes your community.
In contrast, ILS leads are people browsing across a listing service, making a list of properties, and placing calls. They're not nearly as advanced in the buying process, in other words. As a result, they are lower quality leads that take more work to sell and convert to leases at a lower rate.
What does this data tell us about how people shop for apartments?
It tells us that when you bring your apartments to the prospect--instead of expecting them to come to you--the results are remarkable. Your website puts you in front of leads at exactly the right time. Your ads and Google My Business listing do the same thing. And when you give a lead what they need when they need it, they convert at a higher rate--which saves your leasing team time and effort.
In the big picture, giving your shoppers what they need helps you succeed as well. It gives you better leads, which makes for a more efficient leasing staff. It also means you have better control of vacancy and don't need to fear the normal peaks and valleys of the industry. If you play your cards right, you can avoid the valleys entirely. Give prospects what they need. Build your marketing around helping them have a smooth, simple buying process. If you do that, everyone will end up happy.