The Ellis Shopping Report Performance Comparison: A Multifamily Industry Benchmark Executive Summary Second Quarter 2012
The Road To Customer Loyalty Begins at Customer Service
We are delighted to bring you the Second Quarter 2012 EPMS Quarterly Shopping Report Performance Comparison under our new name Ellis, Partners in Management Solutions, a name that supports our vision and commitment to the growing needs of our customers. Today’s customer is sophisticated, informed, demanding and can be difficult at times. We know the importance of quantifying and understanding the customer’s perception of their experience with you. Our business strategy this year is to bring awareness of customer experience best practices that will help you navigate down the road to increased customer loyalty. We have created an integrated program for 2012 – a program that captures data from shopping reports, resident surveys and apartment reviews and presents it all in a single platform to help you understand the “Voice of the Customer“. Along with defining your customer’s experience, our program helps you to understand the generational differences as well as the common values, beliefs and behaviors that each generation exhibits.
In this letter, we continue our drive down The Road to Customer Loyalty, as well as provide our traditional market climate update and the results of our 2nd Quarter 2012 quarterly performance comparison.
♦ MARKET CLIMATE UPDATE
Freddie Mac released its U.S. Economic and Housing Market Outlook for June showing that rental market activity has been a bright spot for the housing market, and due to rental demand by those postponing homeownership, further increases are expected in the coming year. Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4% increase in a single year. Starts of buildings with at least five apartments have jumped 48% in the first five months of this year when compared to the same period a year ago.
- Total nonfarm payroll employment in the U.S. added 80,000 jobs in June 2012 and the unemployment rate remained unchanged at 8.2%. The number of unemployed persons was also the same at 12.7 million, according to the U.S. Department of Labor’s (DOL) Bureau of Labor Statistics (BLS).
- According to Gallup, the U.S. underemployment, as measured without seasonal adjustment, was stagnant at 18%. This is a modest improvement from 18.3% in the full month of June 2011. Gallup’s U.S. underemployment measure combines the unemployed with those working part time but looking for full-time work. Gallup does not apply a seasonal adjustment to underemployment.
- Of the 30 metro areas measured by the CareerCast.com/JobSerf employment index, those in the Northeast saw the most managerial hiring activity in June. Boston (+16%), Philadelphia (+11%), New York (+10%) and Pittsburgh (+10%) all saw double digit gains in per-capita hiring, and all finished within the top 15 cities for job seekers. This mirrors the Northeast region as a whole, which saw a 13% gain in employment activity for the month.
♦ ELLIS QUARTERLY SHOPPING REPORT PERFORMANCE COMPARISON: A MULTIFAMILY INDUSTRY “BENCHMARK”
For many years, our shopping customers asked, “How do my on-site leasing professionals compare to those in similar companies?” In the First Quarter 2000, we created the Ellis Shopping Report Performance Comparison to answer that question.
Known as the “Benchmark”, our quarterly report allows you to compare your company’s leasing performance to other national and regional operators. By measuring the affirmative answers to 10 key questions that are leading and universal performance questions common to all telephone/on-site apartment mystery shopping reports, we rank participating companies on a weighted and equal basis.
♦ ELLIS BENCHMARK QUARTERLY PERFORMANCE TRENDING
The overall average in the Second Quarter 2012 was 91% based on 4,215 shops. The high company average showed an impressive 2.3% increase as compared to a year ago. This is the highest 2nd quarter company average we have seen in the benchmark comparison since its inception. The top five finishers had an astounding average score of 97.4%, an indicator that performance is strong and focused. At the opposite end, the low company average plummeted by 6.4%. Customer service will continue to be a strong focus as vacancy tightens and customer experience becomes critical to capture leases and increase customer loyalty.
♦ TOP-RANKED PARTICIPATING COMPANIES
1st Place – Western National Property Management. 99% (3.05% standard deviation)
“Once again the Western National team does not disappoint. I am always so proud when our Associates come together en masse and in distinction through their hard work, dedication, care and compassion. I am yet again delighted to say, ‘Congratulations Team Western! You Rock!’” -Laura Khouri, President
2nd Place – Carmel Partners. 98% (6.04% standard deviation)
“Our goal at Carmel Partners is to provide the best experience for our future residents so that the decision to lease with us comes very easy to them. The commitment to exceeding that expectation and specifically landing a spot in the Top 5 shows that the efforts of our teams have paid off and been effective. Congrats to all of our amazing associates who have worked so hard to get us these results!” -Parke Pettegrew, Vice President, Training & Compliance
3rd Place – Gables Residential Services. 97% (6.6% standard deviation)
“We are continually impressed with the quality experience our well trained associates provide to our residents and prospective residents. Their passion for achieving the company’s mission of ‘Taking Care of the Way People Live’ is a source of pride and inspiration for the rest of the organization.” -Philip Altschuler, SVP, Human Resources and Learning & Development
4th Place – The Bainbridge Companies. 97% (8.13% standard deviation)
“Bainbridge is extremely proud of our team and excited for their continued accomplishments on the Ellis Benchmarks! Congratulations Team Bainbridge and thanks to you all for your commitment to superior customer service and performance excellence.” -Colleen M. Nolan, Director of Training
5th Place – Legacy Partners Residential, Inc. 96% (6.28% standard deviation)
“Legacy Partners Residential is proud and excited to once again earn a place among the Top 5! Our team members are committed to providing outstanding customer service to our current and prospective residents on a daily basis. We are thrilled that their excellence, dedication and hard work are validated by the top scores they have achieved this quarter. Thank you for all you do and congratulations, Team Legacy!” -Lynn Klug, Vice President of Marketing and Training
♦ PERFORMANCE IMPROVEMENT TOPIC: THE ROAD TO CUSTOMER LOYALTY BEGINS AT CUSTOMER SERVICE
Great customer service is born out of employees displaying a great attitude, solid beliefs in their product, and exceptional behaviors that are applied to customer relationships. Customer service is the foundation that a successful business is built upon.
According to a 2011 survey conducted by American Express Global Customer Service, 60% of customers believe businesses have not increased their focus on providing good customer service. Among this group, 26% actually think companies are paying less attention to service.
The reality is that it can be so easy to get bogged down in day-to-day details of running a business, but just as we pay close attention to leasing, marketing, budgets, curb appeal, personnel etc., it is important to stay in the loop on how customers are feeling about your product, services and the people they interact with – always be listening to the voice of the customer. Failing to listen to their voice can lead to a reputation of bad customer service and a potential resident retention disaster. Sometimes the term “bad” simply means taking customers for granted – treating them as if they will never leave regardless of how they are treated. You know the drill – the customer walks in, you take care of business, and hurry them out the door, without so much as a hi, bye, or even making eye contact for that matter. But keep in mind it is a lot easier to keep your current customers than it is to find new ones.
Today is your opportunity to pull ahead of the competition – great customer service can be your differentiator.
FOUR WAYS TO IMPROVE CUSTOMER SERVICE AND ULTIMATELY BUILD CUSTOMER LOYALTY
- Build Relationships
This goes back to Leasing 101: build rapport. Who is the customer in front of you? What are their wants and needs? Relationships evolve out of regular contact rather than a one-time contact. Use every tool and opportunity to create interaction and conversations. Sometimes connecting with a customer is as simple as taking a little extra time in passing to ask them how they are doing (and how you are doing). When it comes to customer relations, listening to the voice of the customer is very important. If a customer knows they are being “heard”, they instantly feel a rapport and a relationship with you. Stay in touch and give them something of value in exchange for their time, attention and business. It does not need to be much; helpful insights, advice, or information they can use are all effective. All of this will help build and strengthen a long term relationship – one that the customer is less likely to walk away from. Just remember: if you do not keep in touch with your customers, your competitors will.
- Retain Employees
The multifamily industry has a reputation for high turnover; especially front line employees. It can be difficult to build a relationship with customers when the people they depend on in the front office are coming and going. In fact, sometimes when a customer’s “favorite” employee leaves so does their loyalty for the community. It is a fact that customers will be more loyal to your business if they see familiar faces. In his book, The Loyalty Effect, Frederick Reicheld of Bain and Company demonstrates that loyal employees provide better service and that they are more likely to retain customers. Why? People prefer to do repeat business and favor the same employee even though another may be more capable. It goes back to the importance of building relationships. Hire the “right” people for the job, treat them well, reward their successes and recognize their achievements – in front of the customer. What a better way to encourage loyalty on both sides.
- Encourage Resident Complaints
Resident complaints and feedback are gifts. Are you ignoring those who can best help you improve your business? Research shows that customers who complain and are satisfied with how their complaint is handled are actually more loyal than customers who had no problem at all. If getting complaints and handling them well is important to building resident loyalty, it also stands to reason that handling complaints poorly will have a negative impact on resident loyalty. The problem is that most people do not like confrontation and most times do not bother complaining when they think nothing will come of it. They will keep quiet about poor service, but if they can find someone else to do their business with, they will quickly depart. Your residents need to know that you can handle the heat! When they know that you can handle the ‘good, bad and ugly’ feedback, they will be more willing to share it. You cannot fix problems that you are not aware of. ENCOURAGE RESIDENT COMPLAINTS.
- Be a Can-Do Company
Customers like nothing better than a business which delivers on even the most difficult of requests. Can-Do companies will always have loyal customers. They speak a different language that does not include statements like “Sorry, but it’s not my fault” or “It is company policy”. This Can’t-Do language often leads to a poor service experience for the customer. Strive to be a business where solutions are always looked for and problems are seen as opportunities.
Zappos is a Can-Do company. All of their new call center employees receive a minimum of seven weeks of training on how to make customers happy. They use no sales scripts, and reps are allowed to inject their own personality into each call. They have been called “insane” and “fanatical” for the things they will do to please customers. Here are two great examples.
- An employee sent flowers to a woman who ordered six different pairs of shoes because her feet were damaged by harsh medical treatments.
- A customer service rep physically went to a rival shoe store to get a specific pair of shoes for a woman staying at the Mandalay Bay hotel in Vegas when Zappos ran out of stock.
Did you know that Zappos pays Can’t-Do employees to leave? It’s true. They understand how damaging an unhappy or a disgruntled employee can be to their business. New trainees therefore receive upfront payment for the time they have trained and a bonus if they opt to leave. This offer is usually made around week one. This is an easy way to weed out those who cannot live up to the expectations or the culture of the company to provide outstanding customer service.
Remember…customers define their loyalty to a company or product according to their total experience with it and it begins with customer service. Loyal customers buy more, stay longer and tell more people about their experience. Your residents are talking – in person, through surveys and on apartment reviews and ratings sites – make sure you have a voice in the process!
In case you have not heard, I have co-founded Renter’s Voice – an apartment reviews and ratings site designed specifically to fairly represent the multifamily industry – to allow you to share information about your communities with future residents through varied perspectives on the customer experience, from shopping report data, to survey feedback, to posts from online renters. Renter’s Voice offers objective and transparent data moderated by a third party to ensure integrity of the information. Through this endeavor, Ellis remains committed to exceeding your expectations and providing state-of-the-art technology designed to provide you with easily attainable solutions to lead conversion, resident retention, and customer loyalty.
We thank you for your continued support and feedback, which help make our company a reliable resource for understanding the customer experience! We hope you will find Ellis, Partners in Management Solutions to be not only the finest source for mystery shopping, resident surveys and apartment reviews but a true partner in management solutions for your organization. Visit our blog, All Things Considered…An Ellis Perspective, for more insight on customer loyalty and other current topics.
Joanna Ellis, CAPS
Chief Executive Officer