A seamless digital process can provide a path through the maze of rental options
Lead routing is a process through which potential customers are directed by a predetermined pattern through a centralised service system.
The goal is to get customers automatically to the right offering, representative of the product, or next steps in the sales process as efficiently as possible. From the best applications, like discovering useful new products via an online shopping experience, to the less compelling use cases, such as winding phone trees to secure a refund, the fundamental process of lead routing is ubiquitous today.
In residential property however, lead routing is used by only a limited number of rental operators, to the overall detriment of the sector.
If properly deployed, lead routing can deliver significant value to the customer, operator, and property owner.
Effective lead routing is about delivering the right resources to the right customer at the right time.
Property owners and operators can leverage lead routing for potential new renters and the renewal of existing residents. Both situations represent the core sales process in residential rental properties and doing them well adds significant value to property performance.
More importantly, providing the right information, options, and personnel to customers delivers a more positive experience, increasing customer satisfaction.
A typical lead routing process follows these steps:
- Initial landing on operator’s or property website
- Selection criteria around budget, location, unit size
- Automated routing to the most appropriate rental product, eventually leading to some activity beyond the web session (in-person tours, virtual tours, conversation with a sales representative)
Impact on the customer
The lead management process is an efficient way for resources to be concentrated on renters who are moving quickly and have a clear set of search criteria.
The importance of allocating resources appropriately to customers as they work towards a decision cannot be overstated.
Having convenient and easy access to the relevant information is critical to a positive housing search and in building a connection with a given property.
The need for operators to connect with potential renters as quickly and directly as possible is set against the reality of limited resources. It is not uncommon for people to inquire about properties long before they are actively seeking to move. Renters may be thinking down the road and want to do some window shopping from their laptops or they may have recently moved to the neighbourhood and want to find out about other properties in the area.
With finite personnel and time, interactions with these types of leads will deprive active housing seekers of the time and attention of the people who know the property best. Having the ability to assess a potential renter’s stage of readiness and be able to direct them seamlessly down the correct path is key to unlocking resources.
Another area where lead routing can benefit potential residents is introducing new types of products or offerings.
Innovative housing types such as co-living and micros have been a key source of demand and many potential residents discover an option that, thanks to the lead routing process, fits their budget and provides access to properties and neighbourhoods they are targeting.
For current renters, lead routing can be used to provide all the information and documentation they need to quickly secure a renewal.
Those who show a low potential for renewing can be engaged by a renewal specialist who will address any issues and hopefully secure a positive outcome.
Residents who demonstrate a medium renewal probability can be presented with a pricing algorithm and, if the customer rejects the automated offer, can direct them to a renewal specialist.
Lead routing removes the unnecessary complexity and wasted time often associated with renewals.
As an example of lead routing, when a customer visits Common.com, they will experience an initial landing page that is specific to the channel through which they arrived at the homepage.
Often, customers may find the Common website through advertisements linked to a specific market or property, and their experience will be tailored to that path with custom landing pages.
Many customers arrive through a generalised Google search or going directly to the website and these leads will enter the site without necessarily providing any insights into what they are looking for.
These potential residents will be greeted with the Interactive Sales Path (ISP). This process guides them through the steps towards seeing the best set of options for their search.
Example of an Interactive Sales Path (ISP)
1. Select the market/city in which they are looking for housing
2. Select the timeline for moving
3. Desired lease length
4. Budget (range of monthly rent)
5. Additional questions, perhaps moving with a partner, or a pet
Lead routing enables a more tailored and personalised experience without relying on the assistance of a live customer service representative
Once a prospect answers questions about city, lease length, move-in date, and budget, they will be presented with a set number of housing options that best meet their criteria.
This process narrows down the potential universe of options to a list of five homes that fit the customer’s criteria.
Lead routing enables a more tailored and personalised experience without relying on the assistance of a live customer service representative or expecting the customer to filter through endless inventory lists.
Once an option set has been presented that fits the renter’s criteria, a typical next step for a renter is scheduling an in-person or virtual tour.
Customers in most immediate need of seeing a property in-person have access to leasing specialists at the property.
Prospects with a high probability of lease execution get access to self-scheduling tours right away, without having to have a sales call unless the renter explicitly wants to speak with someone about the property first.
For existing renters, renewing is also a process that can take advantage of lead routing.
The simplest form of lead routing is to send an automated email with the renewal offer and the ability to digitally review and accept.
More sophisticated approaches can involve understanding the renter’s preferences and experience at the property and aligning the renewal channel, messaging and terms in a way the resident is most likely to appreciate.
Some renters may only interact over phone calls, others email, while others would appreciate a visit to a leasing office. A well-structured lead routing system can take these preferences into consideration and make sure the renter gets a tailored experience when their lease is up.
By tracking resident engagement, from service calls to engagement in community activities, a renter’s relationship with their unit can be understood and the right approach chosen.
Renters who have a pattern associated with a fully positive experience are more likely to renew, and will likely appreciate the opportunity to do so with minimum hassle. Those residents whose experience is unknown or had issues will get a stronger outreach at their renewal time.
A more focused customer experience may not overpower other factors, but understanding a resident’s experience is the right starting point when asking them to stay at the property.
The ability to quickly fill vacancies and retain residents is a key driver of success for investments in multi-family real estate.
While a high-touch and tailored personal interaction for each prospective and existing resident would be ideal, the cost associated with that level of staffing would drive up a project’s rents.
Additionally, customers carry out a majority of their non-real estate consumption through mobile phones and other digital interactions. Having effective lead routing through a digital platform means potential renters experience a housing search more like the rest of their consumption, while allowing greater efficiency and flexibility for property owners and operators.
A lead routing system can allow operators to capture a disproportionately large share of rental prospects in the market and handle retention of existing renters by efficiently managing the leads and tracking their output.
By using lead routing to shift the educational and administrative portion of the sales process to self-service, operators can process many more top-of-funnel leads with fewer staff.
It is also consistent with more tech-forward industries, such as personal finance or internet retail, which lean heavily on self-service by pointing customers to the right online resources and spotlighting those products likely to be of most interest.
Although there can be many advantages with lead routing, there are challenges that can hinder successful execution.
A fundamental issue is data quality and hygiene. Lead routing depends on renters providing clear and accurate information and areas where renter preferences can often be missed are budget and timing.
If renters look only for offerings at one end of their budget, they may miss properties that they would prefer and select, but have not been shown. Customers who overstate their actual budget will continue to see offerings that are not appropriate.
Another limitation on lead routing is that it creates complexity around how to structure each step of the experience.
One example is how to provide the ideal options to each prospective renter. A goal of lead routing is to narrow the universe of potential options and highlight those that are the best fits to the customer’s criteria. This improves the experience for the customer, but requires expertise.
A goal of lead routing is to narrow the universe of potential options and highlight those that are the best fits to the customer’s criteria
Selecting what should be highlighted and when it should be included requires extensive testing and data analysis. Simple choices, like when to introduce the potential rental options, how many options to introduce at one time, how to introduce a second set of options if nothing from the first set is a match, and how to route the potential renter after they choose an option can have huge impacts on capturing the customer and allowing them to find what they’re looking for easily.
Another limitation could be the infrastructure demand if the right system is not in place to manage the leads.
A big IT investment could be required for build out and maintenance of customised systems. Third-party solutions are available but those also require significant capabilities.
There are also off-the-shelf options, but those will only be as strong as the operator’s ability to integrate them into their actual business activities. Also, these stock offerings will not be able to provide a differentiated customer experience.