Whether you have an ILS such as Apartments.com, ApartmentGuide.com, resident referrals, Craigslist, walk-in, or any other lead source out there, the focus always tends to be on how hay many leads are delivered and what’s the quality of these leads.
But I think this question needs to be extended. It’s not just important how many leads you get, but how many leads you NEED.
How many leads do you need to get in order to generate the amount of leases you need to keep your building full? That’s the important question.
Who cares if you get 100 leads a month if you get no leases. It would be better to get a few leads a month and 1 lease than lots of leads and no leases, but most lead generation companies never take that approach, probably due to the fact that the leasing performance variable is outside of their control.
For example, if a leasing team is not good at closing leads, then it will hurt leasing, and if a lead generation company hangs their hat on leases, then they become more vulnerable. But, none the less, as a marketing director, or the person in charge of lead generation, one of your ultimate concerns is “Are we getting enough leases each month?”
So what about flipping the model around? Start by identifying how many leads you need to satisfy your monthly lease generation requirements. To do this, you need to take into account your communities turnover rate and conversion rate at which your leasing team is generating leases.
If you take your communities’ turnover percentage for the year, convert to a decimal, and multiple that by the number of units in the community, you can identify how many leases a year you need to generate.
Perhaps you don’t know what your yearly turnover percentage is, so assume the worse case scenario. For conversational purposes, let’s assume your annual turnover is 75%. By assuming the worst case scenario estimate, if you generate enough leads to meet your lead count goals, you should have more than enough leads, and even if you fall just a little short of your lead count goals, you should still be doing well in the lead department.
Next, take your leasing teams lead-to-lease conversion percentage. Drop the percent sign and then divide that number by 100. Then multiply the result by the number of leases annually you need to generate from above. There again, if you don’t know what your leasing conversion rate is, assume the worst case at 10%. Hopefully your teams are doing better than that, but by assuming the worst case, you pad the numbers and leave yourself some breathing room.
This number represents the number of leads you need annually based off the assumed turnover rate and lead to lease conversion percentage. Divide by 12 to break this down to monthly lead count goals.
I’ve created a sample formula to help you estimate your own averages. Check out the graphic below.
If you have a 400 unit community, that turns over a rate of 75% and the leasing team converts leads to leases at a rate of 10%, then you need to generate 3000 leads annually or 250 leads a month.
Now that you have identified your monthly lead count goals, take the best performing lead sources you have and drop the rest. If you are hitting your lead count goals and occupancy is not where it should be, then take a closer look at your turn over and leas- ing numbers as they are most likely the culprits.
Another factor that can cause lease generation numbers to be low are poor quality leads. Hopefully you have the proper lead tracking and leasing tracking tools in place to measure this, and if you don’t I highly recommend you get this in place as you are flying blind without it.
For those of you who aren’t doing pay per click advertising with Google Adwords, or if Google Adwords is not your number one source of leases, let me tell you right now that it should be.
If done properly, this will be your best lead/lease source hands down. Furthermore, it is the stepping stone to giving you more control over your lead/lease generation and eliminating the majority of your other paid advertising sources.
As always, if you have any questions about lead generation, Google Adwords, or anything else marketing related, call me at 855-360-9327 or contact us today.
Josh Grillo is a #1 Best Selling Author, Speaker and Co-Founder of Resident360.