As we head into the final quarter of the year, regional property managers and their marketing department colleagues are already concentrating on next year as they finalize their digital marketing budget property management and set goals for multifamily budget season.
We asked three experienced thought leaders in the multifamily industry what essentials they recommend including in a digital marketing multifamily budget for a property management company, as well as some insights into their overall budgeting process. Here’s their best advice to help with how to create a property budget:
Hindsight is 2020 During Budget Season
As Vice President of Marketing at Denver-based Mission Rock Residential, Marcella Eppsteiner oversees the marketing plan for 107 multifamily apartment communities. With such a large portfolio, she applies a precise formula to evaluate the company’s performance for the previous year and forecast what to prioritize when updating the annual marketing for property management budget.
“We first examine historical factors, so we’ll kind of look backwards and evaluate the efficacy of each of our advertising efforts, and which [lead source] generated the most effective cost-per-lease,” Eppsteiner says. “We see what worked and what hasn’t, and also evaluate our sales over the past year. How have our email sales vs. call sales vs. in-person sales stacked up to our overall organizational benchmarks and industry benchmarks?”
Evaluate Market Conditions for Multifamily Budget Planning
After reviewing past performance, Eppsteiner and her marketing team of six then turn to current construction and future projects coming down the pipeline, along with any market changes on the horizon.
“We’ll look at those factors and determine, OK, if we continued all of the effective advertising and that was it, could it get us through what’s happening in the local economy,” Eppsteiner says. “If the answer’s yes, then that’s kind of our starting methodology. If the answer is no, then we’ll start taking a look at how we can optimize that strategy.”
Cut Your Marketing Budget Last
For Chris Berry, Senior Regional Manager at First Communities in Atlanta, Georgia, nothing’s more frustrating than a property owner who wants to slash the multifamily marketing budget.
“Marketing should not be the first thing that you cut. I think you get more bang for your buck if you spend more on marketing,” Berry says. “I try to train the clients and asset manager, and I fight back. I tell them, ‘You cannot have this small of a marketing budget. Otherwise, I fear you will not be successful.’”
Berry emphasizes the importance of looking at how all of the digital marketing pieces work together to get results, instead of focusing on each strategy as an independent part of the budgeting puzzle. He says once all forces work cohesively to get positive results and you’ve reached maximum potential, then it’s OK to peel back on spending — but just a little bit.
Analyze Data and Vendor Performance
Bigger property management companies can negotiate better contract terms and deals with vendors based on volume. Budget season is the prime time to reevaluate the details of every partnership and contract to see if there’s room to save money or increase effectiveness.
When considering new digital marketing technologies or advertising channels, analyze the property’s current data to verify a vendor’s past performance and use those analytics as a bargaining chip as you renew agreements for the coming year. Set performance incentives and seek trial periods for untested methods you may want to cancel or scale down as results roll in.
“Large communities, because we’re big enough to have a national contract, we’re not locked into the standard 12- or 24-month advertising contracts that some smaller properties are forced into,” Berry says. “A little 100-unit property makes it so tough on the marketing budget. I’ve got a couple of those in my portfolio and there’s just no room to add anything.”
Berry says when times get tough, it’s time to spend more on marketing instead of less.
“On some of our advertising, we don’t cancel, we just ease back,” Berry adds. “Then, when good times turn tough, we round it up and get the platinum or premium package.”
Data reporting looms large in the decision-making process for Mary Herrold, Senior Director of Marketing at Redwood Residential, which is based in Chicago and manages multifamily communities in six states.
“I always opt for business models and partners with ‘pay for performance’ because, to me, that’s a fair exchange,” Herrold says. “I’m not a fan of the fixed-cost model.”
Investment in New Technology is Essential
In mid-2018, Redwood Residential added PERQ Web Conversion to the property websites, making 2019 its first full year using the AI-driven software that delivers in-depth analytics on individual prospects and tracks multi-touch attribution.
Herrold merges PERQ’s data and her own analytics research to produce marketing intelligence insights that Redwood uses to determine the effectiveness and cost of each digital marketing effort in relation to each other. Like Berry, it’s important to Herrold to know, for example, how Pay Per Click and PERQ enhance one another to drive conversions.
“I will say this, I would not cut PERQ from my budget now that I have it. It’s never going on my chopping block,” Herrold says. “Unless somebody comes up with a better mousetrap, it would be a foolish thing to undo.”
Berry agrees PERQ’s performance speaks for itself when evaluating the year’s data and results. “We’re noticing an up-tick in closing ratios and our authenticity is up,” Berry says. “All I can say is I’m not increasing my spend with ILS.”
When it comes to specific marketing spend essentials, Eppsteiner says her budget includes money for the property website, national strategic campaigns and partnerships, digital advertising, and internet listing services.
Over the past few budget cycles, Mission Rock Residential added PERQ’s software and virtual tours to the property website, which she calls “a game changer” for her sales team.
“I would say what we, as the marketing team, try to do during budget season is zoom out,” Eppsteiner says. “Take a look at the industry as a whole and ask ourselves how our strategies can be even more innovative than our competitors. We really try to evaluate the existing innovation in the industry, but also up-and-coming technologies.”
Additional Multifamily Resources
- Equip your business with this multifamily digital marketing resources checklist.
- Here’s how to make the most of your multifamily property PPC advertising.
- Bridge your website and in-store shopping with these 5 tips.
- Empower your team with the best digital leasing practices and tips with this guide.