After discussing the hidden costs of listing services in our last blog, the next step is understanding the hidden costs of bad leads. We often assume that it’s normal to deal with bad leads and that it’s just the cost of doing business.
However, the good news is that these costs are not inevitable—you can control them. And you certainly don’t have to keep paying them indefinitely. With better leads you can save money and even increase revenue.
There are three ways that bad leads cost your community money.
1. Bad Leads Waste Your Leasing Team’s Time
First, let’s start at the beginning of the leasing process: when a prospect calls your leasing office. Bad leads might stumble across your community from an internet listing service, print guide, or a newspaper. In many cases, the call is going to be aimless, they’ll have lots of different questions, and they’ll waste your leasing agent’s time by asking basic questions about the property that should be available on the website: “hey, do you accept pets?” or “do you have a fitness room?” Instead, your leasing agent could be speaking with a high-qualified lead on the phone, or even better, giving an in-person tour of a unit.
It’s not just the bad calls that hurt you though. Let’s say your leasing staff works hard and they turn several of your leads into tours. It’s still not a net win because they might’ve spent too much time on the phone working the lead. In the end, three things can happen with bad leads:
- They sign a lease.
- They don’t sign a lease.
- They don’t show up for the tour.
Some of those leads will sign a lease, but a bad lead could easily become a bad resident. So, even the “best” scenario may not actually be a good thing.
Meanwhile, outcomes two and three are likely to happen more often. In both of those outcomes, your leasing team ends up wasting their time on a bad lead.
The amount of time wasted varies from company to company. For example, if your leasing staff works at the community, then an unqualified tour isn’t as big of an issue as if you were to have scattered properties where your leasing staff isn’t in one central location. This causes your leasing agents to drive to the larger communities, spending time on unqualified tours or no-shows.
Ultimately, even if your leasing team does occasionally convert a bad lead, it does not offset the cost of dealing with all the bad leads.
2. Bad Leads Hurt Morale
Second, bad leads will eventually hurt leasing team morale because they're going to start hearing, "no" and will likely work harder to achieve small gains. When we spend an entire day working on something, we want to be able to look back at the day and note everything we accomplished. When you spend the bulk of a shift fielding unqualified calls, it’s hard to find those successes.
3. Bad Leads Contribute to Burnout
Third, there is one more hidden cost with bad leads. When consecutive bad leads just become a part of your leasing agent’s regular work life, the danger is that your leasing team’s job would start to look a lot like busy work—answering calls, giving showings, and then never hearing from those potential residents again. Your team might look busy, but they aren’t productive and are likely discouraged. Once that happens, your team is run down and the results will only get worse.
This discouragement could lead to a higher employee turnover, which means costs in terms of advertising for the position, conducting interviews, and training new hires. Or, if your leasing team is not efficient, you may need a larger team to do the necessary work. That means larger wage costs for your company.
There is a better way to handle leasing.
An efficient leasing system can save you a lot of money. Some multifamily communities we work with don’t have to employ leasing agents because they receive highly qualified leads. Thus, they just have an on-site property manager who handles the leasing. This structure can dramatically reduce costs for a community.
How do you build the kind of efficient leasing system that produces such results? We made it easy by summing it up into a seven-step process.
That being said, you need a marketing strategy that offers potential residents enough information that the bad leads will disqualify themselves. If it’s easy to find rental rates, photos of the units, walkthrough video tours of the units, pet policies, amenity information, etc. then potential residents don’t need to ask your leasing staff about it on the phone and those who won’t fit your community, will realize they’re not a fit while browsing your website.
Building such a strategy requires a team approach since you’ll need web development, copywriting, and media producers to build the website and content. But, the rewards are significant as you’ll improve occupancy, efficiently lease units, and if you're managing revenue/rent rates well, you'll also grow rent revenue over time. If you have additional questions about how to eliminate bad leads and set your leasing team up for success, you can use the form below to set up a time to speak with one of our Business Advisors who will be able to help you identify the best solution for your unique situation.