“A short while ago I was talking through a client pitch with David Bond at PRSim and the conversation moved on to the topic of customer retention. He asked me about something he’d heard to be true but he wasn’t able to uncover the source. The
‘something’ went a bit like this… “If a resident were to make a friend with another resident renting in the same block, they’d be 25% more likely to stay longer, if they made two friends, 50% more
likely’.... Or something along those lines.”
Since I’m supposed to be the build-to-rent guru, I’d know the source of that research right? Wrong! I’d heard it before, it’s oft quoted (with variations) but it’s apocryphal. So I got on the guru
hotline to guru mates in the sector and asked them what the source was… Incidentally, on a bit of a diversity theme, all the mates were women. Tracey Hartley of Howard de Walden, Alex Notay of Places for People, and Lesley Roberts of Allsop. All brilliant… None us knew of any empirical evidence to support the ‘friends stay longer’ assertion, but we’d all heard it.
So where did it come from? Well, eventually we agreed that it was something we had all heard at a conference some 3-4 years ago. Although we couldn’t remember which one… It’s an age thing.
For me at least.
So that meant hitting Google with as many relevant key-words as possible, dredging up and poring over academic sector research to find… nothing of substance. Except one article from the National
Apartment Association of the US. And, paradoxically, not from four years ago, but August 2017. The article can be read here.
Now, whilst the article doesn’t directly address the ‘friends stay longer’ maxim it does identify the importance of curating friendships in ‘multi-family’ environments; or BTR as we’d call it in the
UK. Why is that important? Simply, apart from creating a new asset class, the sector is determined to change the way ‘tenants’ are treated in the UK. So much so, the word ‘tenant’ is banned in many
BTR organisations; they are customers or residents. Each of whom spend the major part of their net income on a place to lay their hat. All of us recognise great customer service when we receive it,
mostly in trivial circumstances. So why wouldn’t we expect even greater care to be taken of us if we’re spending significantly more?
The drive to improve the customer’s lot is not entirely altruistic. It’s also Net Operating Income (NOI) driven. That’s not to say that the lot of the ‘tenant’ has gone unnoticed or is irrelevant. I
think we all recognise that the system of renting a home in the UK is broken and has been for a very long time, and the PRS has been muddling along with ill-timed government interventions here and
there and rather inadequate management.
Many of us in the BTR sector see this new asset class as a catalyst of change, and, for those of us who have been looking to completely change the way we do business with renters, as something that
can now be justified, not just by recognised benefits great customer service brings, but also by the increase in NOI.
What that short article on the NAA website tells you is that there is no landlord/tenant adversarial relationship in BTR thinking. It’s about creating great places to live, enriching the lives of
people living there and building long term relationships with your customers.
Don’t underestimate the power of ‘happiness’ in a BTR environment. Triggering the ‘happy brain chemicals’ encourages social interaction, positive relationships, favourable feelings and creates a
receptive environment where people make friends. And all of that means residents are more comfortable, more settled and more content. Happiness has a wider impact on your business, your
reputation and your brand. Not only will you keep customers longer, you’ll find people will want to be customers of yours, and that really is a happy situation to find yourself in.
So, to answer the question ‘who needs friends?'We all do. Apart from the joy friendship brings, curating friendship benefits the bottom line, improves the heart and soul of the operational business
and makes everyone happy.”
This article also appeared on https://www.psinvestors.co.uk/