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So my sister is moving to Los Angeles after two years at Harvard Business School. She sends me an email today:

Subject: False advertisement

Body:

1st picture is what we signed up for - 2nd picture is what we got…

Do you think the advertisement/picture helped or hurt the property’s end goal?

Last week, Gables Residential announced the integration of their websites with RentWiki.com’s content. Why is this significant?

The multifamily housing industry is not known as the most progressive space, often slow to adopt new technology.

However, even with the last few months, the space has drastically changed. Multifamily companies are gaining a deeper understanding of the social web, experimental budgets are increasing, and adoption of existing social media distribution channels are increasing. Are we close to a tipping point?

Gables becomes the first property management company to take in RentWiki.com user content. With the integration, I think Gables Residential takes two large steps.

Step 1: Movement towards contributed content.

The typical property website displays static information (bed, bath, price, photos). Unfortunately, consumers are accustomed to reading and interacting with contributed content. We rely on Amazon, Wikipedia, and Yelp when making a purchasing decision. Gables Residential has identified the needs of its consumer, understands the benefits of user generated content, and is filling a large need.

Step 2: Transparency.

Driving the largest quantity of leads is part of the game. However, the other component is the quality of the lead. By providing more content, you provide more transparency and increase quality. Similar to posting a video tour, by providing more content, the resident will be further along in the decision making process. Though transparency increases accountability, it also increases the quality of the leads and more importantly creates trust with consumers.

“We’ve put a lot of effort and resource into making Gables.com a world class consumer site,” explained Jason Tripp, marketing director for Gables Residential. “To make it even more consumer-friendly we realized Gables.com needed a social media aspect as well as neighborhood-centric information. By integrating with RentWiki.com we’re able to tap into their consumer-provided neighborhood content as well as their Twitter integration, Facebook integration, Walk-Score widget, YouTube integration and much more.”

Management companies in the Multifamily Industry can spend anywhere between $10,000 to $100,000 or more to build and maintain their websites. And, re-engineering these websites to include social media aspects can be very costly, with no guarantees of getting any real social activity. “RentWiki.com’s content sharing solution allows Gables.com to grab this content and become active participants in the social media sphere,” said Tripp. “It also allows us to be tuned in to what consumers are saying about their surroundings and be highly responsive to them.”

Congrats to Gables Resident in showing its commitment to the consumer.

Yesterday, Yelp announced that businesses will be able to respond to reviews. According to the NY Times: 

Starting next week, Yelp will let small-business owners publicly respond to reviews. This is a big change for the site, which has until now steadfastly refused to give businesses significant access to its pages. 
 
Yelp’s co-founder and chief executive, Jeremy Stoppelman, has said that to protect the voice of the consumer, the voices of businesses, many of which advertise on the site, had to be muted.  

 As a member of the multifamily community, I am excited for communication and interaction between businesses and consumers.  Businesses will have a voice and a way to depend and refute inaccurate and unfair content.  

However, there are dangers involved with going down this route.  The slippery slope of rebuttaling can actually cause more damage to your reputation than the original negative comment.  By adding fuel to the fire, you can convert a simple dissatisfied customer into a flamer.  

Additionally, the integrity of the content may be altered.  The “hovering affect” may occur where users are no longer writing transparent and honest reviews.  As a consumer, I want honest opinions, not opinions when the business owner is standing in the room.   

But overall, I think it is a great move by Yelp to allow businesses to openly communicate with critics and reviewers, beneficial for businesses and consumers alike. Businesses can refute inaccurate and unfair information, consumers will still continue to review regardless, and communicate will occur between the two parties.  In the end, the feedback loop and interaction will hopefully help businesses owners create more value and serve consumers better.

What do you think?

NAA welcomes several of social media’s best minds to discuss how this marketing trend applies to customer service and retention at a Thought Leaders session at the 2009 NAA Education Conference & Exposition on June 27 in Las Vegas.
By Eric Wu

All the current talk is about social media - how Twitter is taking over e-mail, how Facebook has more users than most countries have citizens, and how engineered virality can replace a marketing budget. With all the chatter, one might think that social media should be a substitute for advertising, a reason to eliminate a company’s marketing staff, and even cure cancer.

All too often, abstract concepts in social media marketing and communication are not concretely defined or measured. The result is the perception of a far-fetched land of geeks getting together and somehow magically altering business operations, marketing strategies and branding.

On June 27, 2009, at the NAA Education Conference & Exposition in Las Vegas, the “Thought Leaders in Social Media” panel aims to provide some experiences and relevant insight into how to use the social web. As a precursor, let’s introduce the panel and take a look at how these individuals have applied social media strategies to increase brand recognition, retention and revenue.

Panelist #1 – Tony Hsieh, CEO of Zappos.com

Tony Hsieh has grown Zappos.com from $1.6 million in 2000 to $840 million in 2007, a measly 525,000 percent increase.

How was Tony able to change a company from a little over $1 million in revenue to almost $1 billion in revenue?

If you ask Tony, he’ll say, “customer support.” For most people, these words act as reminders to answer phone calls and please the customer. And, granted, Zappos does both of those brilliantly. However, Zappos has consistently adopted social media as part of its customer support strategy to engage and listen to customers.

“We actually take a lot of the money that we normally would have spent on paid advertising and put it back into customer experience,” says Tony. “We’ve always stuck with customer service, even when it was not a sexy thing to do.”

Zappos shortens the engagement loop with the entire organization by being very active on Twitter. Tony has more than 350,000 followers, and more than 400 of his employees are using Twitter.

For Tony, growing the business has not just been about answering phone calls, but about building a brand around the principles of engagement, creativity and a laser focus on fulfilling customer needs. These initiatives have resulted in 7.4 million total customers, 75 percent of purchases coming from returning customers and repeat customers ordering more than 2.5 times every 12 months. Talk about retention.

Panelist #2 – Jeremiah Owyang, Sr. Analyst at Forrester Research

Jeremiah Owyang is a senior analyst at Forrest Research and a leading expert on social computing, social media and interactive marketing. Jeremiah’s blog was ranked 19th by Advertising Age, he has consulted for large brands such as Hitachi Data Systems, and he is a speaker and educator at many conferences such as Web 2.0 Expo, SXSW and CES.

In a recent study titled, Social Media Playtime Is Over, Jeremiah writes:

The recession has put more pressure on interactive marketers to deliver measurable results. While many marketing budgets are being cinched, more than 50 percent of interactive marketers say they will increase their spending on social marketing. Why? These inexpensive tools can quickly get marketing messages out through interactive discussion and rapid word of mouth and, properly managed, can deliver measurable results. But in this downturn, interactive marketers must move beyond experimentation by making social applications a permanent part of marketing, measuring and demonstrating their value, and integrating them into marketing efforts.

As a part of the study, Jeremiah found that 53 percent of marketers are determined to increase their social media budgets and 42 percent will keep budgets the same, a total of 95 percent of marketers bullish on social media marketing. Even though these budgets are small (three-quarters are less than $100,000), Jeremiah recommends that marketers do not approach social media marketing as an experiment. “Remember, the most expensive cost isn’t the tools, it is the soft costs–strategy, education, process, roles and measurement,” he says.

Jeremiah continues to provide empirical data and demonstrate why social media outlets can be an integral part of marketing and distribution. His message is spot-on; it is not just about being there, but it is about having a strategy and goals for the engagement.

Panelist #3 – Pete Flint, Founder of Trulia.com

Flint founded Trulia.com in 2005 and it now is one of largest and fastest growing real estate Web sites in the United States. Trulia.com has over 5 million unique visitors a month and has raised more than $33 million in funding.

Trulia has been able to bridge the gap between buyers and real estate professionals by building a community called Trulia Voices. Some stats include:

• Visits to Trulia Voices increased 146 percent year over year
• The volume of question and answer activity in Trulia Voices Q&A increased 114 percent year over year
• Real estate professionals’ answer volume increased 96 percent year over year
• Consumer questions increased 181 percent year over year

How has Trulia engaged both millions of home buyers and hundreds of thousands real estate agents?

Again, the answer seems to be centered on the engagement of the customer. Heather Fernandez, Vice President of Marketing of Trulia, says, “Consumers are looking for guidance and education and are relying on our pool of more than 200,000 real estate professionals for advice and insight.”

With multifamily housing traditionally closely tied to the real estate sector, Trulia is a relevant example of how user-generated content can change the flow of communication to consumers.

Moderator – Eric Wu, Co-Founder of RentWiki.com

I’m a 26-year-old entrepreneur and co-founder of RentWiki.com, a socially-driven rental search that connects renters with peer advice. I’ve spoken at conferences such as NMHC Technology, AIM Conference and the Harvard Business School Entrepreneurship Conference. In 2006, I was named one of BusinessWeek’s Top 25 Entrepreneurs Under 25.

Conclusion
Having a Twitter account, a Facebook fan page and a viral YouTube video will not cure cancer, but they can and will affect your bottom line. The underlying message is not about usage or presence. It is about having a consistent strategy to engage consumers, listen to customers and focus on their needs. As Jeremiah puts it, “Fish where the fish are.”

Eric Wu is Co-Founder of Rentwiki.com. He can be reached at eric@rentwiki.com or 415/640-4970. The “Thought Leaders on Social Media” session will be presented 10 a.m. to 11 a.m. on Saturday, June 27 in the Mandalay Bay’s Lagoon Ballroom as part of the 2009 NAA Education Conference & Exposition.

Spoke with Joshua Dorkin, founder and CEO of BiggerPockets.com, last week about adoption of social media in the real estate market. BiggerPockets.com is a real estate professional social network, who’s slogan is “31,131 people are currently networking their way to real estate success… Are you?”

Networking their way to real estate success… At first, I was weary of how that resonates with me.  But then I thought about how people MySpace’d, Twitter’d, YouTube’d, and Linkedin’d themselves to fame and success.  Social media and social networks provide an opportunity for unparrelled exposure… which in the case of real estate professionals can directly translate to success.

“The goal of BiggerPockets.com is to help real estate investors, professionals, and consumers to connect, share knowledge, make deals, and market themselves and their businesses,” says Josh.  

Similar to many of the incentives to joining a network like Facebook, BiggerPockets.com allows users to meet with real estate colleagues, create and join groups, and share ideas.  For some real estate agents on BiggerPockets, the incentive structure goes behind increasing social status or self-expression.  Agents gain financially from procuring business from the network on BiggerPockets.

Thus, BiggerPockets.com recently announced Pro Accounts, which gives agents a suite of additional functionality for a monthly subscription.  The freemium model has worked well for Linkedin because users gain financially from the network, so I’m sure BiggerPockets will succeed with it’s new Pro Accounts revenue model.  I wonder if Facebook could charge brands for fan pages on a per “fan” basis?  (Higher bidder per fan gets premium placement throughout the site?).

Josh is a great guy and is looking for feedback, so send him some if you have any.

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A good guy in the space, Dave Dugdale, launched a new rental site called PickRent.com, which took him about 180 hours to complete.  Pretty good considering nice functionality and usability on the site.

It’s a free listing site, with the intention to syndicate listings from other internet listings site.  In terms of monetization, Dave plans on charging premium listings a nominal fee after he reaches critical mass.

Dave’s looking for lots of feedback so let him know what you think.

“Do not ignore ApartmentRatings.com.”  ”Respond to residents who complain.”  ”Engage and start a conversation.”

There has been many great articles about the importance of engaging in conversation and being actively involved in social media.  In a recent blog post, Charity Hisle says, “This is the perfect opportunity to set things right, make necessary changes or state they’ve been made.”  Eric Brown of Urbane Apartments says, “The shift is pretty simple, we started and work at participating in the Conversation. That’s it, while it sounds pretty simple, and it is, it seems to be pretty hard for apartment communities, otherwise they would be doing it.”  Both Charity and Eric are thought leaders, paving the way for a long overdue entrance into social media, and reacting to trends in consumer behavior.  At it’s core, the message is clear… JOIN THE CONVERSATION.

But that seems like a general statement in an even broader and vague social media strategy.  So similar to the Airforce’s response to social media, here are some strategies on how to handle 4 online personality types.

1)  Flamer, Troll

This person is looking to insult, incite, and personally attack others.  The conversation is usually fairly hostile and he/she may be flaming for acknowledgment, entertainment, or to get a reaction from you.  One of the distinguishing factors is their anonymity.

Example: “The property manager sucks more than all of Nicolas Cage’s movies combined.  The management sucks so bad, life on earth stops.  They are so bad, I’d rather sleep outside in a box.”

Option 1:  ” I apologize that you had a bad experience with our property.  We are doing our best to improve our management and property so that future residents do not have a similar experience.  Most importantly, we are working on listening to past residents and I would like to get more feedback from you.  Please email me at feedback@gmail.com.  Nicolas Cage is horrible so we have some work ahead of us.  Thanks for being so honest!”

Option 2:  Do not respond or acknowledge their existence.  In fact, often times, they will use it to rebuttal everything you could possibly say.

Do not be surprised if the response goes something like this, “No F***ing way would I even give you advice, unless it’s a virus.  Thanks for being so stupid!” In which case, the rest of the community just discredited his original post.  Many people do recommend not responding to flamers and trolls.

2) Critics

This group makes up as much as 25% of internet users.  Though some of these people fall into the flamers/trolls, they are more constructive and sometimes will be transparent with their identity.

Example: “This apartment is below average.  Though it is in a great location, the property is old, run-down, and has some deferred maintenance.  Parking is difficult, but on the bright side, it’s close to public transport so you may not need a car.  If you can spend a bit more, there are better options in the area.”

Option 1:  “That is false.  We have plenty of parking, and our building is in top-notch shape.”

Do not do one sided rebuttals.  If so, expect another rebuttal to come from the users who posted this saying something to the effect of, “The manager is lying, parking sucks, etc.”

Option 2: “Thank you for the constructive feedback.  We purchased the property from the previous owner and have also noticed some deferred maintenance.  We’ve made some improvements with the parking situation and have had some positive feedback from residents.  Also, we’re attempting to compile a complete list and prioritize which ones are most important to residents.  I was wondering if you could take 5 minutes and add to our maintenance, www.uservoice.com, what you would like to see improved .  Let me know if you have any questions!”

Uservoice.com, getsatisfaction.com, etc. all work very well with compiling feedback and building a community around the feedback.  The key here is to convey that you are trying to make improvements.

3)  Spectators, lurkers

These are people that are not actively submitting content, but rather reading and consuming the information.  This is typically the largest group of users, with some estimates north of 80%.   You want to connect with them.

The best way is to actively seek feedback.  Post a feedback button in your signature.  Email all current and past residents asking for feedback and advice.  Feedback does not have to be about the property, but maybe something like, “a resident asked me yesterday the best bar in the area.  Does anyone have any recommendations?” Establish some type of rapport before you ask for future help.  Most importantly, this allows you to identify who may potentially be an evangeslist.

4)   Evangelist

This is the most important group to engage because they are the people who will spread positive WOM.  With minimal reward or recognition, they will most likely continue to evangelize on your behalf.

Example: “This apartment is in a great location, well maintained, and management is responsive and responsible.”

Option 1: Post online, “Thank you for your kinds words.  We have made a conscious effort to listen to our residents and make improvements according to feedback.  I’m glad to hear the time and effort is paying off.  We’re always looking for ways to be better, so please email me any additional thoughts you have.”

Option 2: Email the resident directly with something to the affect of, “Thank you for the kind words and I am happy you enjoy living here.  We’re always looking for ways to be better, so please email me any additional thoughts you have.   Additionally, we’re actually compiling for testimonials to post on our website.  I was wondering if we could use your review on our website.  I’ll send you a $10 itunes gift card as a thank you.”

Option 3: After doing both 1 & 2, “Hi, we’ve noticed that someone wrote an unfair review about us on _____.com.  I was wondering if you would share your experience.”

Use all three options!

Eric Brown, Mark Juleen, Charity Hisle, Mike Brewer, and many others are right.  Use blogs, twitter, facebook, ning, yelp, yahoo answers, rentwiki, etc.  It’s time to start engaging with users, but in the correct way.  And most importantly, be yourself.

What do you think?

Ps. Trying to get together ideas for the apartment industry and then track results.  Help out at http://socialmediaideas.pbwiki.com.

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We’re witnessing deflation and rising unemployment,resulting in trailing decreases in consumer spending.  The movement towards thrift spendinghas impacted the housing market, and I am noticing a couple of obvious trends.

1)  Empty nestsare being filled

Renting is the largest living expense and consumers aremoving home to reduce that cost. Manyrecent college graduates, young professions, and the unemployed will be forcedto move home.  

2)  Per unitoccupancy is increasing

Before the recession, a typical 4 bedroom unit wouldhouse 2 or 3 occupants.  Now,residents are forgoing the luxury and privacy of living alone, and moving inwith roommates.  We will continueto see a trend of more one bedrooms vacant compared to cheaper four bedroom counterparts.

3)  Influx ofsecond homes becoming rentals 

As downward pressure is placed on the pockets ofthe upper-middle class, many owning vacation homes will begin to seekadditional income via rent.  Withsome 6.6 million units classified as “second homes”, this will results in morerentals on the market.

4)  Risingvacancy, declining home purchasing

We’re seeing a positive correlationbetween the volume in home buyers and renters…And by positive correlation, keep in mind that I mean they are both decreasing.

What does this all mean?  Simply put, increases in vacancy and decreases in rental rates.  It does not mean that the rental sector will resemble theprice sensitivity of the airline industry, but we will see a push towards moreaffordable housing options.  Anecdotally speaking, I’ve seen my properties decrease 10% in rental rates yoy.

How do you combat the current economic crisis?  Unfortunately, I do not know the exactanswer, but the first step is to recognize that profits equal revenue minus costs.  It will be increasinglymore difficult to increase revenue as the downtown continues, but you can takeadvantage by reducing costs.  Again, we’re seeing deflation, so renegotiate contracts with your vendors, maintenance companies, etc.  Reductionsin operating costs, advertising costs, staffing costs, turnover, and other line items can help you stay afloat. 

What other trends are you seeing? 

In a short conversation with Eric Brown at Urbane Apartments, he mentioned that he is seeing in an increase in in the demand for 2 bedroom units.  This seems obvious and logical, considering that decreases in real income (loss of assets, no bonuses, unemployment) will cause consumers to want cheaper alternatives to housing.  We know that consumers will be looking to save money so the trend of lower per unit costs will continue as the recession seeks a bottom.  My take on lower real income will cause:

1) Increase in shared units - For example, if under a stable economy 10 people would occupy 10 one bedroom units, to account for the lower income, the same 10 people may occupy 5 two bedroom units.  Same for rental houses… 4 bedrooms with 2 empty rooms will be filled.

2) Empty nests will be filled - Along the same lines with shared units, I’m guessing well see an increase in young professionals moving home.  Thus, a 4 bedroom house with two parents will become sharing living.  But I’m not entirely sure how much impact this will have on the vacancy and rental rates.

3)  Unemployment rates rise causing vacancy - As residents lose their job, they will be again forced to seek even cheaper housing alternatives.  Though housing is a staple and people always need housing, this is affected by point 4…

4)  Overdevelopment will be actualized. - In many cases around the nation, overdevelopment of housing occurred because of the present of “secondary homes” and a flood of speculative investors.  As job growth and population growth boomed the past 5 years, areas like Phoenix, Miami, and Las Vegas were in a foot race to develop as many homes as possible.  Since job growth and population growth has completely halted, we have seen and will see excess supply of units (apartments and homes) available for rent.

However, in my attempt to understand how the governments recent monetary policy actions will affect vacancy rates, here is my logic:

1)  Refi’s increase - Via open market purchases to lower the fed fund rate to next to nothing, the fed will attempt to infuse cash into the marketplace and spur lending and growth.  Though people will be able to borrow money at extremely cheap rates, resembling the 4.25% 30 fixed loans of 2001, this will not greatly impact housing prices.  There will be lots of refi’s, but it will not drastically change the value of an home that is already underwater 25%.

2)  Foreclosures rise - I believe foreclosures will continue to rise, regardless of what the fed does.  Though it is cheap to borrow money, there is little incentive to pay a mortgage for a property that is 25% underwater with such lenient bankruptcy laws. People have already started to realized that personal credit is not that important.  Continued foreclosures cause derivatives to come due, and job losses.

3)  Long-term inflation - We’re likely to see long-term inflation.  This is very good for investors with low interest rate mortgages, but I expect some price rigidity in rental rates as many consumers are locked into long-term leases.

My conclusions:

1)  Vacancy rates will rise - Yes, people are not buying houses and instead renting, but overdevelopment has wiped out all that potential benefit.

2)  Nominal rental prices will decrease or stay the same - LT inflation should cause real rental price to rise a bit, but not enough to off set the lack of demand.

3)  Revenue for apartmets will be squeezed - Obviously with higher vacancy and the same prices, revenue will be down.

So where is the opportunity?  I have no idea.  If you have cash, yes, there will be lots of buying opportunities in the future.  Maybe in educational classes that teach parents and children in their 20’s to live together?

Since the inception of RentWiki last year, I am seeing the Multi-family housing industry takes leaps and bounds towards understanding and adapting social media.  People are drawing an interest in participating and communicating on social networking sites like Facebook and MySpace.  Though this is a good first step, it is crucial to understand the purpose of the network and the audience of the network.  All to often, marketers attempt to just put up a page, or set up a group.  But these networks are used for connecting peers, sharing ideas, and transfering information.  Advertisers need to participate in the conversation and provide value, not just “spam” users with an advertisement.  In a repost, here are two interesting articles about the value of advertiser participation on social networks.

1)  Why Isn’t Facebook Making More Money

2)  Marketeers are idiots

Granted my opinion may be on the far “left” side, I do not think there is much value in direct advertisements from the majority of brands in social networks.  Apple, Victoria Secret, and Starbucks are able to get users to associate themselves with their brand because of their product… it is sexy and popular.  But that is not the case for most brands, and their lack of direction on social networks just causes excess noise.

Where I do see value and a natural fit for any advertisers is to fulfill some of the purposes of the social network.  So here is my random advice for property management companies, and Internet list sites attempting to utilize social networking sites:

1)  Do not just put up a profile page and self-promote. If you are just throwing up a profile page, you will probably find yourself wasting your time.  Setting up a MySpace page for a property will probably not drive you an additional leads. This leads me to point 2.

2)  Relevant content is key. Instead of trying to convince members to connect with your brand or a blatant advertisement, try to provide information, ideas, and resources.  In the case of property managers, maybe provide an update of local activities around the property, property updates on upcoming improvements, brainstorming on how to improve the property, a idea forum for tips on space usage, how to reduce utilities, etc.  It is not about forcing an advertisement, but providing relevant content to the user.

3)  Active engagement and updating is a must. If you do choose to use social networks to promote your brand, it is a time commitment.  You cannot be passive about it or it will not work.  You need to actively engage users, provide consistent updates, ask questions, and provide answers.

4)  Think feedback, not marketing. One of the main advantages of using social networks is the connectivity they provide.  It is an opportunity to reach out to your target market, monitor the conversation taking place, and get feedback in real-time.  Sometimes a simple, “I apologize and understand your complaints.  We are working out best to improve our service.” is enough to turn a critic into an evangelist.

Now, I’m not saying that if you do the above, you’ll be successful marketing to users.  It is really about the content, engagement, and value you can provide members.  Are you interesting?  Relevant?  Important?  Necessary?  Fun?  Responsive?  But if you follow some of these suggestions, I think you’ll be better off when you do decide to join the conversation.