The Exact Science of Cost Per Lead and Cost Per Lease

Multifamily PMCs often manage to a measurement of the cost per lead or the cost per lease.  The average spend varies widely and is reportedly on the rise. Whether you manage one or both of these metrics, if you’re not comfortable with what you see, you need to take action. 

 

Cost per Lead refers to the average cost of each of the leads you create.  It is calculated by taking your marketing spend and dividing it by the number of leads you generate.  Many PMCs look at this number by their different advertising sources.  It’s widely reported that this number is on the rise due to expensive ILSs and it varies greatly by PMC.  Each PMC has a number it can tolerate and still meet management’s important NOI numbers and this often dictates marketing spend. 

 

Cost per lease takes the same spend but divides it across the number of leases signed.  This number, like cost per lead is also rising and PMCs often like to look at both numbers to get a sense of what’s happening with their marketing spend. 

 

The fact is, if you’re not happy with your marketing spend, you really only have 2 options: 

  • Improve your conversion numbers across the lead funnel, so you need less leads to achieve the same outcome 
  • Improve your conversion on website leads because these “free” (sometimes called “earned” vs. paid) leads can be a replacement for higher cost leads from other lead sources, allowing you to turn down your marketing spend. 

Man working at home with boxes all over.

 

Improving Conversion Numbers 

Improvement of conversion numbers can only happen in a few ways.  Your contacts convert to tours at a higher rate. And your tours turn into signed leases at a higher rate. 

 

Often, conversion rates suffer when the leads that are moving through the funnel are not properly qualified.  This has become particularly challenging in recent times because today’s multifamily rental prospects are more digitally savvy and accustomed to buying online than ever before.  

 

Their buying behavior has changed. They crave information to learn on their own and explore the options before they decide to tour or speak with a person.  This has led to multifamily treating rental prospects like they are tour ready when they’re actually just following their modern shopping approach.  We have a bad habit of calling these folks “Looky Loos” but many of them are real buyers, just on their own timeline.  So as a first step in considering how to improve conversions, you should take a look at how you’ve been managing your leads and be honest about whether you’re doing the right thing for your prospects  

 

Improving your Website Performance 

The previous paragraph about buyer behavior holds true on website leads too.  Your website is is your PMC’s greatest marketing weapon because it is a low-cost asset compared to the leads you generate from leads sources.  The ability to generate more leads from your website can help improve your need to spend money with advertisers and will lower your cost per lead and cost per lease if you get really good at website conversion. 

 

But getting your website to convert better for you is a maturing science.  Consumers are now used to the kind of digital engagement they get from other consumer brands.  In short, they want and expect engaging and interesting content that is relevant to them.  Consumers live in a world where much of what they see is personalized to them, reducing their need to search.  And they’re used to interactive online experiences that go beyond static pages to engage them in more interesting ways. Plus, they expect a unified, consistent experience from the brands they choose to buy from that goes across all their favorite channels. 

 

A first step to improving website conversion is to evaluate your website and be objective about how engaging it is.  In reality, if you’re not seeing great time on page, repeat visions, or tours from website leads then those are all signals that your site needs to be more engaging. 

 

 

The Solution 

perq platform collage | PERQ AI Leasing Assistant

 

PERQ was invented to solve for both conversion metrics and website performance.  A next-generation technology for multifamily, PERQ engages prospects from your website and lead sources and nurtures those leads with interactive website experiences, cross-channel natural language chatbots, and SMS and email personalized nurture outreach, all powered by an AI decision engine that gives every renter exactly what they need along the renters’ journey until they are ready to tour or request to speak with a person.  PMCs using PERQ enjoy more leads and leases from their website, higher conversions form their lead sources, cost savings on their marketing and operational spend, and consistent consumer experiences that delight prospective renters. 

 

PERQ integrates with your existing website and lead sources to engage, nurture and convert every lead, improving the multifamily leasing journey for everyone. Learn how it works or request a demo.

Why Multifamily Needs Nurture

Managing multifamily leasing activity has never been more painful.  While it’s commonly expressed in different ways, 

  • My leasing team is not following up on leads 
  • Leads are falling through the cracks 
  • We have too many “looky Lous” 

 

Chances are it sounds familiar to you.  

Women frustrated while working

 

The conundrum is that you’ve generated more leads than the team can handle, but you also need to keep that volume going to ensure that enough leases get signed to maintain your occupancy numbers based on current conversion rates.  But that’s not actually where the problem starts. 

 

The actual root cause stems from the way we have been managing leads in multifamily. It no longer works for today’s rental audience.  

 

 

Why Multifamily Lead Management Needs Change 

The COVID-19 pandemic changed a lot for consumers. The need for isolation meant more needed to happen online, and consumers became more digital; embracing technology in new ways to research and purchase everything from groceries to cars.  With so many people spending more time at home, a great many of them decided to relocate to more a suitable place for their new situation, leading to a surge in leasing activity unlike anything we’ve seen before. With more young renters and those that are new digital buyers all in market for apartments at the same time, leasing activity began to shift to be more online. 

 

As the volume of renters in the market rose, supply and demand changes forced those renters to begin exploring their options earlier.  In fact, a recent PERQ study indicated nearly half of renters begin looking online 3 or more months in advance, a change over prior years’ results. 

 

In multifamily today, leads are passed directly into the CRM as soon as contact info is known.  The leasing team is expected to contact them and work that lead into a tour and lease.  But the renters aren’t ready for a tour or lease: their shopping behavior has changed 

 

Since today’s apartment shopper is looking months in advance and doing considerable research on their own before they are ready to tour, we need to be able to engage with them the way they want.  They want to look into multiple properties, understand neighborhoods, compare floorplans and rental rates to develop a short list. But, multifamily teams are not equipped with the staff to engage with these shoppers in this way. It’s simply more than leasing teams can handle. 

 

 

The Solution 

 

perq platform collage | PERQ AI Leasing Assistant

PERQ was invented to solve for all of this.  A next-generation technology for multifamily, PERQ engages prospects from your website and lead sources and nurtures those leads with interactive website experiences, cross-channel natural language chatbots, and SMS and email personalized nurture outreach, all powered by an AI decision engine that gives every renter exactly what they need along the renters’ journey until they are ready to tour or request to speak with a person.   

 

Multifamily leasing funnels that nurture leads enjoy higher conversions and lower marketing costs. 

 

The results: increased leads from your website, increased conversions from lead sources, higher quality tours and increased lead to tour conversion; all helping to drive down the cost of paid leads and optimize your leasing funnel. 

 

 

In Conclusion

Today’s multifamily rental prospects are more digitally savvy and accustomed to buying online than ever before. They crave information to learn on their own and explore the options before they decide to tour or speak with a person.  And they are used to the kind of digital engagement they get from other consumer brands.  In short, they want and expect engaging and interesting content that is relevant to them.  And they expect a unified, consistent experience from the brands they choose to buy from — across all their favorite channels. They want to be nurtured. 

 

PERQ integrates with your existing website and lead sources to engage, nurture and convert every lead, improving the multifamily leasing journey for everyone. Learn how it works or request a demo.

The Rules of Online Consumer Engagement

If you can get consumers to interact on your website, you’re more likely to win a customer. The rules of consumer engagement may seem like common sense, but there are so many detractors today that end up driving these website visitors away.THE RULES OF ONLINE CONSUMER ENGAGEMENT

Time and time again when I re-visit websites, I get frustrated because the experience isn’t personalized to me. I feel more like a statistic than an actual human being. I want to learn more about a product before making a purchasing decision, but all too often the messaging is strictly buy, buy, buy.

 

Many website visitors, however, are still in the research phase. You have to build their trust and motivate them to want to purchase from your company, not a competitor’s.

 

You’ve spent countless hours making your showroom or storefront personal to make visitors feel comfortable and want to stay longer. Gaining that online customer is about creating an experience on your website that’s personal, too. It’s all about getting that visitor to stay longer and interact with your brand.

 

 

When I talk to customers, I often use Amazon as the perfect example of a website that treats its visitors like humans, not robots. Amazon offers me product suggestions based on my searches and wishlist. They’ve learned that personalizing the experience for its customers is key to customer engagement.

 

And it’s no surprise that Google sets the bar when it comes to consumer website engagement, too. They know essentially everything there is to know about you. With the information based on your searches, they create a seamless experience that’s customized to you. It’s all about convenience, making it easy for you to get the information you need.

 

Today, consumers are starting to expect that same personal experience on other websites, including when they shop for a car, furniture or even an apartment. By creating a personalized experience on your website, you show consumers you care.

 

Let’s take a look at the 5 basic rules of online consumer engagement:

Consumer Engagement Rule 1

Please, don’t ask me for the same information twice. If I visit your site once and entered my name and email, the next time I visit, don’t ask me for the same information. You’re essentially making me do more work and my time is valuable.

 

What you can do: Use interactive tools on your website that talk to each other and remember your customer. Rather than serve up another static lead form, engage them in an experience so they’ll remember you.

 

Have them complete an interactive quiz, for example, and then collect their contact information and email them the results with a special offer. When they return to your website, you should already know who they are, so serve up a different interactive experience and collect other valuable information.

 

For example, if I enter my name and contact information into an interactive trade appraisal tool on an auto dealership’s website, and then click on Get E-Price for a vehicle, it shouldn’t ask me for my contact information again.

 

There’s absolutely zero tolerance with the consumer to fill that information out again. In fact, data shows that the visitor will leave your site when asked the same question. Again, when was the last time Amazon asked you who you were? Which leads to no. 2…blog separator multi tri | PERQ AI Leasing Assistant

Consumer Engagement Rule 2

Personalize my experience and learn more about me to make my shopping experience customized to me.

 

If I can answer a few questions to help a company narrow my shopping selection, you’ve essentially saved me time from searching through tons of search results.

 

What you can do: When a consumer visits your site, ask them questions to better serve them. For example, in a mattress assessment experience, you could ask them questions to help them determine what type of mattress is best for them.

 

Your CTAs on your website should then adjust so they focus on mattresses, not sofas or dining room tables — because they’re not shopping for those items. You wouldn’t ask this visitor to schedule a sofa consultation, but you might ask if they’d like to schedule an in-store mattress consultation.

 

Personalization tells me that you are listening to what I am telling youblog separator multi tri | PERQ AI Leasing Assistant

Consumer Engagement Rule 3

Don’t interrupt my research with a call to action that has nothing to do with what I’m researching.

 

If a chat call to action continually pops up on my screen when I’m in the middle of reading about a product, I’m going to get annoyed and search on another site. You’re not engaging the consumer, you’re interrupting them.

 

What you can do: During the research phase, visitors are looking for information and to educate themselves before narrowing their selections to determine what they want to buy and what they can afford.

 

You can help educate the buyer by providing videos on your site, you can serve up an interactive CTA assessment that again helps them to narrow their options (for example, asking them questions to help them determine what furniture style fits their personality), or even provide a calculator to help them determine their budget.

 

Better yet, experiment with all three and see what brings the best results.blog separator multi tri | PERQ AI Leasing Assistant

Consumer Engagement Rule 4

Remember me and the information I have shared when I come back. No one wants to start over. If you remember my name and contact information, that’s a good start, but if I took a quiz, calculated my budget and went through interactive experiences on your website to help narrow my shopping preferences, your website should be able to capture all of those details and not ask me the same questions over and again.

 

What you can do: Your CRM captures leads and all the valuable data that a website visitor just gave to you. For each visitor, you’ve created a consumer profile with many points of data.

 

With today’s technology and dynamic pathing, you should be able to serve up new experiences on your website to visitors, so you don’t need to ask them the same questions over and over again.

 

Entice your visitors with new experiences like a Spin-to-Win or Scratch-Off promotion that emails them a special offer.

Consumer Engagement Rule 5

Make taking the next steps easy. Get the web visitor to make an appointment to meet a member of your team in person.

 

What you can do: In an interactive experience, you can easily have the visitor schedule an appointment. If you get them to schedule a date and time online that works best for them to meet with you in person, you’re more likely to finalize the sale.

 

With all of the data you’ve captured, your sales team can be well prepared to assist the consumer, without having to ask unnecessary questions, too.blog separator multi tri | PERQ AI Leasing Assistant

Bonus Rule

Don’t use business jargon. Assume I don’t know your jargon… because I don’t.

 

It seems simple, but so often we get caught up in the day-to-day and don’t realize a visitor to your site doesn’t know the industry (or the terms of your business) like you.

 

What you can do: Make sure anyone can understand the language you use on your website.

 

Have an honest friend who’s not as familiar with your industry review your site and tell you if there’s anything they don’t understand. If they don’t understand it, your customers won’t either, so edit and simplify.blog separator multi tri | PERQ AI Leasing Assistant

Expect Results

Following the rules and developing a consumer engagement strategy to engage customers takes time, but the results will pay off.

 

People today expect a personal experience online and are more likely to view you as a company that cares about helping them get the information they need to make the best purchasing decision. In return, expect to win a loyal customer.