How Good Behavior is Rewarded in the Market
Multimillion dollar developments spend thousands of dollars each year on various marketing tactics like photography and advertising campaigns, but one of the most vital components of marketing that overshadows all of that is a good online reputation. It’s priceless.
During the 2021 AIM session Marketing Matters, J Turner Research President Joseph Batdorf and Chelsea Kneeland, director of research and development for J Turner, discussed the importance of online reviews and ratings in terms of their effects on marketing.
The panelists highlighted why reviews and ratings matter to a property’s overall value and not only what prospects are looking for, but how they are looking and what sways them.
Panelists noted the importance of an ORA score and how it correlates directly to optimal asset performance in the market.
“On average, for every one point of an ORA score change, you’ll see three basis points on the return, which is pretty amazing,” said Kneeland. “And that is the same across all asset classes.”
According to Bardorf, while bad behavior can’t be hidden when it comes to online reviews, good behavior is rewarded with additional marketing perks.
“The better your online reputation is, the better your revenue improvement is for your property,” Batdorf said. “When your customers are happy and your properties are performing well, your employees are happy. And happy employees are better suited to focus on your customers, resulting in a better online reputation.”
After any business interaction these days, a consumer heads to one of the many online review platforms to talk about their experience, and multifamily doesn't escape that fact unscathed.
“In our database we have about 128,000 properties with 11.7 million reviews on the internet, which represents 108 reviews per property,” Batdorf said. “When we first started tracking this there were four reviews per property.”
With each property having an average of four review sites tracking them, it is crucial that operators monitor and utilize that information to their advantage.
“What you do, how you market your properties and how you market that you can be trusted is rewarded,” Kneeland said. “It really does matter.”
There are some things operators can’t change, like the market you’re in, the age of a property or the size of a unit, but your online reputation lies largely within your control. And it matters to both prospects and residents.
According to Kneeland, “as ORA scores increase, so do renewals.”
With more review sites available, J Turner was curious as to which ones persuade prospects or residents more than another.
“We did a survey of prospects and asked them what's stronger than Google. And what we found out is that with review sites that basically verify what Google is saying, there is a 5% increase in trust,” Batdorf said.
Furthermore, while 64% of respondents said they look at all reviews regardless of stars, 78% of people will still look at a property with low stars if the most recent reviews are good.
Panelists urged that to remain on top of reviews and respond to them, as 21% of prospects began looking for a new home nearly a year ahead of when they wish to move-in. Proving once again that every review, no matter how old it may be, could be important.
“You have to be on your toes from an operational perspective, right off the bat,” Batdorf said.
Here is the replay:
- Joseph Batdorf, President at J Turner Research
- Chelsea Kneeland, Director of Research & Development at J Turner Research