This article has been writing itself since 2018, when a dramatic shift in online shopping habits created a domino effect across all industries, including multifamily. As we found in the SatisFacts “Online Renter Study”, trust in the information found on a community’s website went from 36% in 2017 to 9% in 2019, which is the largest drop since the study originated in 2011. So, what happened in two years that made renters unsure if company-generated marketing could be considered a reliable source?
2018: The year that changed the marketing game
To answer that question, examining the changing landscape of online shopping in general provides a few clues. The U.S. Department of Commerce reported a 2.4% increase in the number of online shoppers in the U.S. between 2017 and 2018¹, continuing a trend of steady and consistent growth. During that same period, the number of shoppers who said they had returned an item purchased online suddenly soared and increased 110%.² 2018 proved to be a turning point for how companies should market their products and services and forever changed consumer online shopping behaviors. I, like many reading this article, am one of those consumers.
In 2018, my parents were coming up on their 50th wedding anniversary, and my siblings and I took on the charge of planning a big celebratory weekend to mark the occasion. For months, all of the planning was going smoothly. Then it happened…the first item I purchased online was delivered.
When I opened the box and removed the protective covering, the images I saw online of an elegantly gilded photo frame and what I was now looking at just did not match up. The online store, with its photos, corresponding description and online reviews from what seemed like completely satisfied customers, left me feeling confident that this purchase was a wise decision. The company’s online marketing message set an expectation they failed to meet offline.
Knowing that I had been duped by my first purchase, every online retailer and item thereafter was scrutinized, investigated and vetted. I joined message boards to learn more, searched for photos and videos taken by actual customers, and only shopped at reputable retailers with clear, well-defined return and exchange policies.
Going back to the reports from The US Department of Commerce and The National Retail Federation, online shoppers were following the same pattern. While the number of online shoppers continue to increase each year, returns have been on a downward trend. As of 2020, U.S. online shoppers grew 3.1% since 2018 yet those who have returned an item dropped from 44% to 31%. More shoppers result in more online purchases, but less returns signify consumers have been getting smarter and performing their due diligence before making any decisions.
The tipping point for online apartment searches
Whether people are looking to buy household items, electronics, cars and even rent apartments, their online shopping behaviors are one in the same. The initial action is to research the item; Google refers to this as the Zero Moment of Truth. Broad search terms develop into specific search terms as someone becomes more interested in a specific product. What begins as “1-bedroom apartments in Dallas, TX” eventually becomes “Grapevine Plains Apartments Dallas”. It is at this juncture where a company and/or community’s online messaging can sabotage any effort to keep the renter engaged and interested. Knowing that renters are savvier than ever before, here are 5 missteps in regards to apartment marketing that will stop a renter’s online journey to your community dead in its tracks.
1. Incentivized reviews – the Federal Trade Commission is cracking down. In March of this year, we hosted a webinar on incentivized and deceptive online reviews. Our guest speaker was Robin Rock, an FTC attorney who has successfully litigated cases and won monetary judgments against businesses due to their deceptive practices. Offering any form of compensation (money, gift cards, reward points, raffle prizes, etc.) in exchange for an online review is not a violation of the FTC’s policies and guidelines. What the FTC takes issue with is not disclosing to the public that the writer of the review was compensated for their testimonial.
Ideally, the FTC wants the disclosure to be made within the review itself: “I am writing this review to receive…”. Should the reviewer not make the incentive known, the onus is on the company to educate the public and not doing so is a clear violation of the FTC’s policies and guidelines. Let’s imagine a renter who is interested in a certain community reading several online reviews that mention an incentive was in play. What are the chances that renter is going to take any of those reviews seriously? Having a quid pro quo approach to improving a community’s online reputation is sure to backfire.
Reviews written by employees, friends/family of an employee, even vendors that offer a service to a community or management company must also feature a disclosure. The material connection, according to the FTC must be clearly stated in the review; if not it is again the company’s responsibility to make those connections known. Companies found in violation of the FTC’s policies and guidelines are subject to financial penalties and up to 20 years of monitoring to ensure no future infractions occur.
2. Review gating – the art of deception. Have you ever received an email with a simple, one question “Please rate your satisfaction” survey, only to discover it was just the beginning of a series of additional questions? Review gating follows a similar approach. People who respond positively are asked to write about their experience which is then published as an online review for all the world to see. Should someone respond negatively, that person is also asked to write about their experience, yet their comments are re-routed to the company as customer feedback and kept hidden from the public.
Review gating also comes in the form of selectively targeting residents, whether that is by contacting them directly or using a service that allows you to provide a list of only residents whose reviews would most likely be positive. The Consumer Review Fairness Act bans the use of gag clauses and prevents companies from retaliating against consumers who write negative reviews. Additionally, it was passed by Congress because at its core the act strips away a company’s ability to inhibit people from giving honest reviews about that company’s products, services or conduct. Gated reviews are not reflective of the overall resident experience and it creates a false perception that your community and/or company is perfect.
3. Highlighting only 5-star reviews – perfection breeds suspicion. According to Reevoo, when there are no negative reviews, 30% of those surveyed suspect censorship or faked reviews and 68% say they trust reviews more when both positive and negative are present. A perfect online persona comes across as too good to be true and a “five or nothing” marketing strategy does little to motivate the masses. Brightlocal’s 2020 Local Consumer Review Survey, found only 12% of all respondents said they required a 5-star rating in order to consider using a business.
If not all 5 stars, what is considered a trustworthy rating? The Medill Speigel Research Center (MSRC) determined that 4.2 to 4.6 ratings are most trusted; products in this range are more likely to be purchased than those that were rated 4.7 to 5.0. MSRC also found that near-perfect ratings undermine the credibility of the review and 82% of shoppers specifically seek out negative reviews. Readers are skeptical of reviews that are too positive and, in many cases, a negative online review makes all other reviews seem more credible. Consumers can spot a company’s overly positive reviews a mile away and it turns out the tactic isn’t even necessary to build confidence and convert prospects.
4. Template review responses – shortcuts that undercut the perception of customer service. Did you know that consumers believe the quality of a review response is indicative of how a business treats its customers face to face? As we’ve seen since 2014 in each round of the SatisFacts Online Renter Study, renters also believe review responses offer a glimpse into the quality of service provided by the management team. When asked how does it make you feel when a community staff member responds to an online review, the #1 answer was “they have great customer service”; and when asked how do you feel when they do not respond, the #1 answer was “they do not care about their residents”.
Don’t be tempted to create a one-size-fits-all message to reply to every review. A copy/paste strategy leaves readers to infer the management team has better things to do and residents at the community are treated as an afterthought. Brightlocal found that of the 92% who read responses, 70% would be put off if a business used a templated response. Readers want to see responses to negative reviews that demonstrate action, not talking points. They also believe the community has something to hide when specifics are not being addressed.
Responses have become the litmus test in a renter’s journey and should reinforce what a community’s brand is all about. Templates are appropriate for something like a budget spreadsheet – unfortunately, they don’t work for review responses.
5. Social that isn’t social – feature residents, not apartments. At SatisFacts, we analyze the top 5 drivers for the perception of value every year; a correlation analysis we’ve been doing since 2013. Social media catapulted from #23 in 2016 to #2 in 2017; a complete surprise no one could have predicted. Four years later, social media remains in the top 5 among the value drivers which indicates renters want their communities to post content that goes beyond advertising vacant apartment homes and move-in specials.
Prior to the pandemic, resident engagement with a community’s social media was dismal. In 2019, social media went from being the #2 to the #5 driver for the perception of value and in jeopardy of falling out of the primary rankings. Residents at this time were losing interest in social media because of the type of content seen on their community pages. Operational changes in 2020 due to Covid brought about an opportunity to utilize social media to keep residents connected and informed to where now in 2021, social media is the third most important factor to the perception of value.
Prospects want communities to show what isn’t found on an ILS or community website. Using social media to celebrate resident life pays off in multiple ways; when residents are the stars of the show, prospects get a sense of what it’s like to live in the community. And if the story is captivating enough, they may be compelled to want to be a part of it too.
The digital marketing trifecta: what is important moving forward
Once a prospect goes through the general research phase and determines their communities of interest, moving forward in their journey is entirely reliant on a community’s ability to execute this digital marketing trifecta:
1. Authenticity matters – give prospects the whole truth and let the chips fall where they may. Renters don’t expect perfection, but they are worthy of honesty and now demand it. Not everyone is going to be put off by negative reviews, as seen in the studies cited in this article. Taking measures to control or manipulate a community’s online presence is far more damaging than showing the good, the not so good, and everything in between.
2. Transparency matters – give prospects an accurate depiction of how well residents are cared for. Knowing that the quality of customer service is interpreted by review responses, it’s important to address negative experiences head on. Remember, the response itself is more for the reader than the actual reviewer and can make a big difference in concluding whether or not a community is the right fit. Boilerplate, one-size-fits-all responses may be time savers, but have an adverse effect on renters.
3. Fairness matters – give prospects unbiased information to make informed decisions. Everyone at some time or another has been disappointed by an online purchase. Most items can be returned; such is not the case when renting an apartment. If a perception is created by unfair means, prospects who choose to become residents will surely feel some degree of buyer’s remorse. Remorse begets disappointment and frustration; which may lead to a feeling of regret and the very real possibility of a negative online review.
Although renters have lost some trust in company generated marketing, there is still hope. Knowing that the decision to lease is multi-layered and extends beyond price and availability, multifamily owners and operators will find success by focusing on the key motivators for renters today and remembering that authenticity, transparency and fairness really do matter.
²“The State of Retailing Online”, National Retail Federation, produced in partnership with Forrester [2017-2020 reports]