How To Create A Better Customer Experience Boosts Satisfaction

The real estate industry is constantly changing, and customers now have more control over their experience than ever before. To stay ahead of the competition and keep up with customer demands, one needs to create a better customer experience. Luckily, there are a few ways to do just that. This episode will discuss ways to improve your customer experience and boost satisfaction.

The stake is on a mission to make renting financially rewarding. It wants to create the future of FinTech powered real estate with Cash Back rewards. Get paid for paying your rent—extra Cash for groceries, fun, or anything. Save and spend your Cash Back with Stake and earn additional monthly Saving Bonuses.

Know More About Stake https://www.stake.rent/

---

How To Create A Better Customer Experience Boosts Satisfaction

You refer to how in multifamily, the term is per door, “This is how much the building cost per door.” In hospitality, I use keys, which are even more difficult to comprehend. When I first came across it, I was like, “That is a lot of money per key.” Key is the metaphor for the entire unit and room and how much we expect to make, but there is a lot multifamily can learn from hospitality. The very nature of the term hospitality is supposed to be about delivering a service.

It seems crazy to me that there are so many folks who are delivering service when the user base or guest base is very transient. They come in and out. Service is even more important when you live in a place and you call it your home. You are paying a property manager or you are paying the investor to provide the roof over your head. You can have a bad experience in a hotel, but you certainly do not want a bad experience where you live.

People remember and that is where it becomes for property managers. I get it. We always joke sometimes that we do not compete against other PropTech firms or other FinTech firms. We compete against the boiler exploding because the boiler explodes and everybody on the property has to go deal with the boiler. They did not return our calls for a bit because the boiler exploded.

I have a lot of empathy for the property management side because there are some tough things that happen in properties. You are always reacting to them. You do not know necessarily what is to be coming up, but because of that reactive nature, that all the customer service things that we expect as empowered consumers everywhere are not happening.

At the same time, while you are fixing the boiler, he will remember that you fixed the boiler. They did forget that quickly, the boiler is now fixed, but they do remember when it took you five days not to be able to get there. Being able to create this better customer experience and getting to know somebody does a number of things. You get better at what is called resident satisfaction. I prefer to think about it as delightful. Satisfaction is like, “I do not even spend a lot of money on being satisfied with a product.” You try to buy products that delight you and do something amazing. You would have to go that step further.

A lot of it we handled digitally. There a lot of the other stuff you are doing as a property manager has to be physically by nature. It is great when you are able to offer a digital product that can take care of some of that for you as a property manager and take that off their plate and at the same time, reduce costs. If you can get that reduction in costs and also create that delightful experience here, you have done something special.

To the unit economics of a concession, there can be a lot of debate around what the concession should be. A lot of naive investors see concession as, “It is vacant anyway. We might as well give them month three, so we can fill it faster.” That is the wrong way to look at it. That is something you preach a lot in the marketplace. Maybe you can walk us through that.

If you think about the retail industry for a second and what it was like ago, H&M, Gap, Uniqlo, and it moved to fast fashion. It went from 4 seasons to 6 seasons to 8 seasons to now to 16 seasons. Everything is always on sale. I never expect to go into an H&M and buy something at full price. It is always going to be 20% off. That is a similar problem you have with concessions. When you constantly are saying, “It is one week, two weeks free.” People are like, “That is the price.” It is not just the price. They do not feel like they are getting anything. It does not feel like you are doing anything for them. They do not have to do much to be able to get it.

Rewards and loyalty establish a two-way relationship.

It is this gap between asking and effective rent. Asking rent is the amount that you were saying, “This should be $1,000 a month,” but what you got was lower than that. The banks know that and your next buyers know that. They look at that, but at that net price, not the gross price. It would be like, “Your effective rent was $900, not $1,000.”

That has a lot of knockdown effect. We say, “The price should be the price.” I know they do get to negotiate with American Airlines and American Express. The cost is a cost, and then they reward me. They give me rewards for being able to help me after that to be able to keep me close but are keeping the price where it is.

Loyalty and rewards should be something where it keeps the premium and the value of the property and saying, “We provide something here that is important. I am not going to knock off the price. I am going to do it because you pay us every month and you take action as well.” Now we have a two-way street and that is how most rewards and loyalty work. It establishes a relationship. That relationship is two way. You do something to get something and both benefit. There is not a lot of data to say how much you should reduce or why the reduction should be there. It has this big economic impact on the building.

When you look at it from a psychological perspective, it is very easy to justify, “Everyone is offering one or two months free rent. This has been empty for a while, so let’s offer one or two months free rent anyway.” Whereas if a tenant were here right now and you were told to put $2,000 in their pocket, that is quite uncomfortable. “Why would I put $1,000 or $2,000 in their pocket? That is a lot of money to give.” People do not realize they are effectively the same damn thing.

It is interesting because the idea of that the market is saying, “This is what the prices go against the basics of marketing.” I was an interim CMO prior to starting stake and was put into a lot of chief marketing officer positions and Fortune 1000 companies. In the interim and I went to the CEO and said, “There is nothing we can do about it. It is what the market is doing.”

I would have been shown the door quickly. The job of marketing is to differentiate your product and make it stand out and create the premium. In real estate, a lot of times, there is a lot to do with a lot of the inputs that are coming from revenue management and property management software saying, “This is what the price is.”

That is certainly very useful information. You want to have data to know what the market is, but because the market is doing something does not mean that is what you should do. You may have a more premium product. We give property and asset managers data to see not what the market is doing but what their residents are doing.

This is a difference between a same store sale in retail versus member sales at Amazon. What is this person doing? Are they willing to be able to spend more because they love it here? You should benefit if you have built an amazing product and people love it. People next door are doing it and they have an awful product. That is the reason why the prices are being brought down.

Differentiation is the beginning of marketing and differentiation is the beginning of creating something more premium. That goes hand-in-hand. People are willing to pay for a better product in all different categories. They are willing to be able to pay for a better product. That is hopefully what we are able to expose and say like, “You can do better here.”

When it comes to differentiating, what are some of the, tactics you have seen beyond renovation and general amenities? You can upgrade the countertops or you can have the pool have a pool functioning. So many pools do not even function properly. You can have a dog park and that is nice to have a lot of the times, a park or whatever it is that matches the tenant’s profile. What else are you seeing property managers do to differentiate?

The one big area that is coming in more is being able to offer a number of digital amenities that are there and saying, “Here is something that you might be able to get nearby.” The problem with this is that you are guessing. If I try to guess one brand versus another brand, what is going to work or not? There are a lot of property managers that are moving into and getting that the biggest pain point is the money. It is a big decision. There is some cool stuff out there that is doing credit reporting, which I have a lot of respect for because it helps people say, “If you pay your rent on time, we do credit reporting.”

There are some great companies like Isuzu that are doing good stuff on that and I have a lot of respect for them. Some in the insurance category make it easier to buy renter’s insurance and stuff for deposit insurance. This is the coalition around like, “Let’s focus on what this is because this is a big financial decision.” No coupon is going to help. It is a financial decision. We focus on the cashback to build up real savings. Cash is universal and where you decide to spend it is up to you. It can work for anybody.

The other area that property managers are trying to say is that you cannot suddenly add a pool without a huge amount of costs, but they are getting a good idea more about the community around the building. I have seen some full things that are happening where people are starting to make bigger inroads to like restaurants, cafes, or retail nearby, and trying to be able to see that more as an ecosystem. That is some positive stuff I have seen happen with property managers.

It is a new age way of thinking. It is no longer a box with essential services that you are supposed to have because everyone wants you to have them. You are supposed to have potentially laundry facilities if you do not have in-unit laundry or a car park. Instead, you try to touch the tenant in the physical home like the way you did with giving gifts to tenants as they come in or putting money in the bank account when they pay their rent on time.

Another company that I invested in, Amenify gives you a digital app where you can order on-demand services. You can have someone come and walk your dog for you. You can have someone cook for you or do some chores for you such as cleaning. These are now seen as amenities in this new age or new way of thinking. The amenities are not that down to the renovations.

They are not down to the marketing of how you create the materials, the signage around the building, the branding, the name, how beautiful the model room looks, and how the office looks. It comes down to your mobile phone and your computer and where you are spending time and touching tenants there by giving real world services.

To cross-sell, you need to build trust.

You have to find what matters to the resident and use data to be able to figure that out. If you can get the data to figure out what matters, going back to our example of asking and then going from there rather than assuming and then giving it to them. That is where the people abandon and go, “You do not know me well.” If you get that right level of data and can figure out what happens. Digital is the easiest way to be able to deploy. It makes it way easier to be able to get something to somebody and it is faster and it has less cost to it.

There is some cool stuff though that is happening where beyond. We talked about financial services. I have seen some folks starting to be able to bundle internet in with the home in the right way. I found both pros and cons with that. That is amazing. People are working from home and are becoming like, “Why need more services to support what I am doing it from home and having to separate decisions seems weird?” We have also seen some residents be like, “I am not sure if I trust the internet coming from the landlord.” They still go around to buy separately.

This is the ancillary services world where, especially in single-family, a lot of thought is going into like, “How can we add other services to help residents so they can also buy from us?” You have to get over that trust barrier if they go, “This is a place that barely can fix the sink. How are they going to keep the internet going?” It is two different things and they bought it wholesale to be able to put it in or what have you, but it is a trust level that you have to be able to build up. Like any brand, to be able to make that cross sell, you have to build up trust. I have seen folks do it well. I have seen folks struggle with it at the same time.

There is an interesting implication for PropTech founders when they are thinking about the distribution strategy and often, property managers are a great distribution strategy, but then comes the challenge, “Do we white label this product, so it is seen as if the property manager is delivering this?” In that case, if your property manager’s brand is an internet brand suddenly, “We are Heritage Homes and here is our internet connection.” You are going to be like, “I am not sure this is going to compete with Google.”

Comcast does this every day and delivers it. Not to say they always do it well either, but at least that is what their brand is meant to be or Verizon or what have you. You have Heritage Homes which is not known for that. Any brand thing it, “What is your first recall?” A lot of very big brands have done a great job of creating ecosystems where they are pulling in and selling a lot of different things because they have a great connection to the residence. I think about them as ingredient brands. You do not have to be able to brand everything and put your name on it. People will not remember their property name over Nike or Apple. You have these big names out there, but they will remember incredible experiences.

The naming does not matter as much as the experience. If it works and people trust you, that is going to be okay. If they do not have the trust there and the last experience they had with you was not so hot, it is going to be tough to do. If signing the lease took a long time and it took two weeks to be able to get the lease from you and then the move in was tricky, chances are the internet install is going to feel tricky or it is going to be perceived as feeling tricky as well.

You have to win on the basic things to be able to offer these other ones. A lot of PropTech that is coming in can help with that, but I do not think they should worry as much about the branding. I do not think that, at the end of the day, the consumers remember the brand names as much as everybody would like to think they do.

---

Subscribe to Zain Jaffer: https://bit.ly/2SWhYW5

Follow the PropTech VC Podcast:

Listen on Apple - https://apple.co/2Izoznu

Listen on Spotify - https://spoti.fi/2STWDwq

Listen on Google Play - https://bit.ly/2H7s6c0

Follow Zain Jaffer at:

Twitter: https://twitter.com/zainjaffer

Website: https://zainjaffer.com/

Current Ventures: https://zain-ventures.com/

LinkedIn: https://www.linkedin.com/in/zainjaffer/

The Struggles of the Rental Market for Both Renters and Landlords https://youtu.be/0jx6tdfHof0

The Problem with Third-Party Management with Managing Capital https://youtu.be/tf1cQIndfzQ

Handling Inquiries When Starting Investment Projects https://youtu.be/7gOEGe84kwY

About Zain Jaffer:

Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at the age of 14 and later moved to the US as an immigrant to found Vungle, after securing $25M from tech giants including Google & AOL in 2011. Vungle recently sold for $780M.

His achievements have garnered international recognition and acclaim; he is the recipient of prestigious awards such as "Forbes 30 Under 30," "Inc. Magazine's 35 Under 35," and the "SF Business Times Tech & Innovation Award." He is regularly featured in major business & tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.