I recently had the opportunity to read Think Like a Freak by Steven D. Levitt and Stephen J. Dubner, which was a great read and I recommend it to anyone in any industry. At its core, the book is meant to teach you how to think about and approach problems with a different attitude and mindset.
One particular excerpt from the book focuses on the importance of handling how you incentivize people, but being careful not to make someone feel as if they are being manipulated. The authors insist that the incentivizing process should be executed keeping three key factors in mind: novelty, candor and control. Today’s post will address the first factor– novelty.
This ideology applies directly to what we see too often in the apartment industry. Inevitably there will be competitors in the area offering some sort of move-in concession. Rather than determining if the incentive is truly necessary or researching why the incentive is being offered, communities will blindly offer the same incentive just to be able to tell prospects “we are offering one month free as well.” This instantly causes the concession to lose its novelty.
As a company we are hesitant to incentivize prospects as a default. However, we are cognizant of the fact that some markets are conditioned to be incentive based. For this reason, we will also offer an incentive, yet we will make sure the concession is unique and addresses our prospects’ wants and needs.
An incentive is not solely about money. It can be anything that produces a feeling of worth, belonging or pride. Instead of grouping your prospects into one generic category, take the time to find incentives that will resonate with your future residents. For example, if convenience and ease are important in the lives of your prospects, consider offering a bimonthly apartment cleaning or a subscription to a food delivery service rather than the cliché offer of free rent. For professional individuals with a lot on their plate and little time for much else, this novel offer will grab their attention in a way free rent cannot. On some properties, the feeling of inclusion and belonging are most important. These particular prospects may gravitate toward tickets to a concert, music festival or even a wine tasting event.
Engage everyone involved in the leasing process to collaboratively research and brainstorm what their future residents want. This extra effort will turn a blah incentive into a novelty. Approaching incentives with a different mindset and attitude is what produces novel outcomes, rather than settling for the status quo.