What do you value as an apartment marketer?
Do you spend most of your time focusing on the branding of each community? Their copy, positioning, visual content, and advertisements, too?
Those things matter when creating an appeal for your apartments that attracts prospective residents.
Something else you may need to consider when it comes to your strategy is this: Is my marketing driving my community's top-line revenue?
More marketers within the multifamily industry should focus on this because there is a clear relationship between marketing and revenue.
And that relationship narrows specifically on one number: vacancy loss. Every day a unit is empty comes at a cost, and when you're not paying attention to that loss or thinking about how your marketing is your best solution to stop it, the deficit only grows.
We'll discuss the true cost of vacancy loss and what signals you should pay attention to as an apartment marketer to help reduce vacancy duration.
Understanding vacancy at a deeper level.
Of course, you understand what vacancy is if you're marketing for an apartment community.
But before we delve more into the true cost of it, we must start with a look into how vacancy affects you and your community at a deeper level.
Vacancy represents the number of days between one resident moving out of a unit and a new one moving in.
The best interpretation of vacancy is to separate the timeline between residents. The first period counts the days between when the previous resident left and when a rental application comes in for that unit. The second period is the days between the application and move-in day.
The only influence on the second period is how long your community holds a unit for someone after applying. If vacancy duration is a problem, shifting to a dynamic hold policy can quickly recoup some of the costs of lost vacancies.
Where your marketing plan directly affects your community's top-line revenue relies on how quickly a unit can be under application after the last resident leaves.
Every apartment marketer should transform their values more toward strategies that increase this leasing velocity. And one method that works is dynamically adjusting marketing spending on sources that generate your best leads so that you stay on top of ongoing vacancies and reduce their costly after-effects—more on that next.
(Many other factors beyond your marketing impact leasing velocity—your property needs to be in good order and have accurate rent prices. The last part is imperative: You will always spend too much on marketing if your rent prices are wrong.)
That first period of vacancy duration is what we'll prioritize as we progress. Next, let's put a number to the cost of vacancy to show why it's a problem apartment marketers must realize and resolve.
The longer a unit sits vacant, the more it costs the community. Now imagine how much multiple units accrue in vacancy loss.
To emphasize the need to value marketing efforts that reduce vacancy, look at how much impact changing ad spending can have on top-line revenue.
Say you're marketing for a 230-unit apartment community, have 24 available units (yikes!) with an average rent price of $1,435/month, and average one new lease signing per week.
Here are two truths about vacancies to keep in mind in this scenario: You can only rent one unit at a time. If it takes one week to rent one unit, then the 24th available unit in this hypothetical community would accrue 24 weeks of vacancy loss if nothing changes.
One of those vacant units costs $47/day individually at that average rent price.
Suppose leasing velocity remains the same, and it takes 24 weeks to occupy those available units. In that case, the amount of vacancy loss is devastating:
Those are just the costs associated with vacancy loss. That doesn't include the costs associated with increasing rent discounts, the only other lever beyond marketing that can help speed leasing velocity.
And here's what apartment marketers should take away from this: the surmounting lost revenue from not actively combating vacancies is far more significant than your marketing investment.
Being willing to increase marketing spending when dealing with a high amount of vacancies, especially with sources you trust to generate qualified leads, guarantees the best return on investment and is a decision that should become a mainstream tactic for the multifamily industry. (That's why communities in lease-ups need to spend significantly more on marketing.)
You will see remarkable change when you prioritize shortening the time between when a resident leaves and a new resident applies for a unit. Say you improve your leasing velocity from 1 unit/week to 2 units/week. That alone reduces vacancy loss by half!
Let those numbers persuade you why apartment marketers must value their role in reducing vacancy and improving top-line revenue.
What signals should you pay attention to as you improve leasing velocity with your marketing strategy?
Let's discuss a couple of things marketers should look for in their pursuit to reduce further vacancy loss.
Time On Site per Lease
A challenge to dynamically changing spending on marketing is that most operate within static budget structures—meaning that it's commonplace for apartment marketers to stick to spending the same amount each month regardless of occupancy.
While it's easy to suggest that driving more traffic through spending more on ads will automatically convert more leases, executing that tactic with little wiggle room in a budget causes most marketers to stand pat and hope that the usual amount of paid traffic to their website will be enough to combat vacancies.
So, you also need to ensure that a majority of those website visitors are genuinely interested in your apartments. A signal worth paying attention to is Time On Site per Lease to know whether your traffic is more qualified.
How many minutes, on average, do all visitors have to spend on your website until you earn a lease conversion?
If your community has 760 visits/week and the Average Session Duration on your website is 1 minute, and 35 seconds, then it takes roughly 21 hours of engagement to earn one lease.
The longer it takes to sign one lease indicates you're not getting the best traffic—and this data is very influential in how you proceed with your apartment's marketing strategy.
If you are getting highly-qualified traffic, you could still average 760 visits/week and convert more leases because those prospects are more ready to rent from you than others. Combine that with a website with engaging content like walkthrough video tours, and it's easier to improve lease conversion rates.
So, when it's time to pull the lever to drive more traffic to your website by increasing spending, you can do so confidently because you know that investment will reduce excess vacancies. And that will be evidence-based on the amount of time visitors spend on your website for you to earn a lease. The less cumulative amount of time it takes for them to convert, the better.
Efficiency Of Marketing Sources
Website visits, as a metric, matter. But that number can disillusion some apartment marketers.
As stated before, two communities can earn the exact amounts of online visitors at any given time, but one will gain more leases than the other. And we know that one gains more conversions because it is getting more quality traffic (and directing that traffic to a great website).
Here's why traffic numbers aren't all that they seem to be. Say you average 500 visitors a week, and your average leasing velocity is two leases/week. Now, if you had six available units and were desperate to occupy them, you would need to increase traffic to around 3,000 visitors per week to have enough traffic to fill those units. That's just not efficient or feasible within most marketing budgets.
Of course, what matters is that most traffic consists of visitors genuinely interested in your apartments and are more likely to rent. So that's why apartment marketers must continually assess the efficiency of their traffic-generating sources.
Numerous data points within channels like Google Analytics, Google Ads, and other advertising platforms measure channel performance. But reading and understanding what that performance data suggests can be challenging. Here are two metrics specifically for multifamily marketing that make things more clear: Cost Per Minute and Lead-To-Lease Conversions.
You can calculate Cost Per Minute by dividing the average cost-per-click of a digital advertising campaign by the average time on site of the website, giving you an objective indication of both the quality of traffic and website engagement.
Ad campaigns that result in a low Cost Per Minute mean that your marketing investment produces more bottom-of-funnel website leads (visitors with high interest and intent to rent from you, and less expensive to attain) who stay on your website longer, watch video tours, and view floorplan content. Those elements, combined, are proven to produce more conversions.
When you have more campaigns that result in a lower Cost Per Minute, you can confidently dial spending up and down as necessary, knowing that your ads are efficient in producing leases.
Lead-To-Lease conversion is similar because it's a metric that depicts if a marketing source is producing what you need it to do—leases.
Many marketing sources can produce a lot of website visitors and leads (like Internet Listing Services). Still, you misuse your marketing budget if most of those individuals are less likely to convert to a lease. And when vacancies stack up, it will be much more difficult to combat them when your marketing plan isn't capable of generating leases faster, and you have to significantly increase spending to generate traffic counts needed to garner conversions.
There are steps you can take to begin counting lead and lease counts for every marketing source, including implementing phone call tracking software that will give you a good glimpse into which sources are more efficient than others. With that information, you can redistribute your marketing investment toward sources that are best for generating leases and remove costly sources that are less likely to combat vacancy.
Branding, copy, logos, color scheme...all those elements certainly are an essential part of marketing an apartment community.
But apartment marketers have a unique responsibility in actively reducing vacancy, and the costs associated with vacancy loss present a real incentive as to why investing in and establishing a dynamic strategy matters.
When you condense your sources to ones that produce the best traffic and enhance your websites with engaging content that converts those visitors to leads at high rates, then you will be better equipped to resolve vacancies, diminish their costs, and positively influence your community's revenue.
Now that's a result every apartment marketer can value.