Social Media Referrals Were Fans.pdf by longze569

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									favorite. But within three months of the     modified in the face of new information.      demographic predictions hadn’t panned
new product launch, the company was          In 2004, with Jay Leno at the top of his      out. Instead, Leno’s audience had
forced to return to the original Coke        game in the late-night talk show space,       declined only slightly and Conan’s had
formula.                                     NBC announced a succession plan that          made no real headway. Rather than
   What happened? A strategy built pri-      would take effect in 2009. Based upon the     scrapping the strategy that was no longer
marily on blind taste test data simply       best demographic information then             supported by the data, NBC barreled
didn’t take into consideration the dogged    available, the strategy envisioned Leno’s     ahead. The only concession to reality
loyalty of traditional Coke drinkers.        audience aging and giving way, within         was giving Jay Leno a show at 10 p.m.
There just wasn’t enough good data and       five years, to Conan’s younger demo-          as a lead-in to Conan. In less than two
information upon which to build a suc-       graphic cohort. After all, NBC had suc-       years, it all came undone. What was
cessful strategy. We’re still drinking       cessfully transitioned from Tom Brokaw        good for Brokaw and Williams failed
Classic Coke today.                          to Brian Williams with this same strategy     miserably for Leno and Conan.
   The Conan O’Brien-Jay Leno-NBC            and was confident it would work with             So what do the 3 C’s tell us about social
fiasco is an example of a seemingly good     Leno and Conan.                               media? A lot, I think. Don’t try to imple-
strategy going bad because it wasn’t            But when 2009 rolled around, the           ment marketing or business plans without




          Social Media Referrals: We’re Fans
Chicago’s Waterton Residential realizes 324 percent ROI through its online resident-referral program.
                                             BY VIRGINIA LOVE AND ED SPIEGEL



M        any property management companies wonder whether
         investments in social media provide a tangible return,
and especially whether those efforts can convert into
                                                                   year test of the social media-based resident referral program. The
                                                                   company sent five e-mails to each of 7,000 residents for whom
                                                                   they had a valid e-mail address. Through social media, the cam-
real dollars. Property management firm Waterton Residential’s      paign reached 87,072 of those residents’ online friends, family
year-long, social media-driven resident referral program shows     and acquaintances.
that apartment providers can harness the                                                          To use the tool, property manage-
power of social networks to fill apartments,                                                  ment team members access a Web por-
save money and staff time, and improve a                                                      tal and create a customized e-mail
community’s NOI.                                                                              campaign to residents. The e-mail
   With social media tools, resident refer-                                                   describes the company’s resident referral
ral campaigns have come a long way from                                                       program and encourages residents to
the days when community managers                                                              click on an embedded link within the e-
designed resident referral fliers, printed                                                    mail to spread the word to their Face-
them and hung them on every door. The                                                         book, MySpace and Twitter contact. Or,
online tools Waterton used turned this                                                        if residents prefer, they can forward it
physical process into a campaign that is                                                      via e-mail.
virtual and trackable by allowing resi-                                                           With a click, residents post a message
dents to post referral messages to their                                                      (also customizable by the property man-
newsfeeds in social networking sites.                                                         ager) to their newsfeed, promoting the
   Apartment communities have always                                                          community to their online friends.
had resident referral programs because they work. In a 2009        Interested friends can click on the feed to visit the community’s
Nielsen Online survey, “Recommendations from people I know”        website, where they can learn more and contact a leasing agent.
scored highest in effectiveness among all forms of marketing       It’s a low-pressure, soft-touch sell among friends, and it reaches
communications, both traditional and online. Capturing resident    a wide audience because the average social media user has more
referrals through social media can add legs to a marketing plan    than 200 Facebook friends and Twitter followers.
without adding budget dollars.
                                                                   Referral ROI
The Social Sell                                                      Tracked against a list of all referral bonuses paid across the
   Waterton, a Chicago-based firm with 15,000 apartments in 12     21 Waterton communities taking advantage of the social
states, found substantial return on investment (ROI) in its one-   media-based resident referral program, the company reported


40 UNITS      July 2010                                                                                             w w w. n a a h q . o r g
a strategy. Make sure that your marketing      noise before defeat.” An effective social      maximizing the lifetime engagement of
plans are based on a well-thought out          media program requires attention to both       customers with the company, not with
and well-researched strategy, not merely       sides of the equation: strategy and tactics.   driving individual transactions. Being
mimicking someone else’s effort. And           Before marketers in the multifamily            customer-centric means that communi-
remember, a strategy is a living and grow-     housing industry decide that social media      cating with existing and potential cus-
ing approach to business, and it has to be     is right for their company, they should        tomers is a tailored, two-way street. It
modified to reflect changing realities.        keep in mind a number of critical points.      means recognizing that the company
                                                  1. Strategic marketing is not               doesn’t really “own” the brand—cus-
The Art of Planning                            about your products anymore. If                tomers do, and at best we can influence
   Developing the right strategy is key to     your marketing approach is designed to         their views. Keeping these points in mind,
an effective social media program, but it      only push product (apartment units)            social media’s importance becomes
is not enough on its own. Sun Tzu, the         instead of engaging potential renters,         much clearer.
great Chinese thinker, said, “Strategy         you’re in trouble from the get-go. Effec-         2. Think about social media in
without tactics is the slowest route to vic-   tive marketing today must be primarily         the context of your company’s cor-
tory, but tactics without strategy is the      concerned with serving customers and           porate culture and business plan.




446 closed resident referrals. Since referrals are somewhat           Positive Buzz
organic, not all of those leases can be attributed to the                Direct referrals weren’t the only benefit Waterton realized
program. However, 22 percent of the residents who successfully        through its social media referral campaign. With many commu-
closed referral leases clicked on the link in the RentMine-           nities still learning how to live in the world of online rants and
Online referral program campaign. Further, 12 percent (or 54)         criticism, Waterton sees using social media as a cost-effective and
of all Waterton’s resident referral leases in the past year were      search engine-friendly way to generate positive buzz that spreads
converted by residents who participated fully through the social      rapidly in cyberspace. Resident recommendations, though incen-
media-based online referral process (open, click, sign-in and         tivized, are credible to those residents’ online contacts.
refer/endorse online).                                                   Further, the tracking and reporting available with social
   Assuming that signed leases prevent about two months of            media provides valuable data to better understand the communi-
vacancy, the revenue generated by 54 leases at an average             cation preferences of residents. The online tool used by Waterton
monthly rent of $900 yields $97,200 in revenue generated. The         allowed the company to precisely track resident referral activity
campaign cost an average of $1,500 per community for a total          and offer early participants a small incentive to increase overall
cost of $30,000, indicating an ROI of 324 percent.                    participation rates.
   Waterton also witnessed increased resident referral rates from        With the tracking capability, companies can know exactly
using the social media-based online referral program. The refer-      who contacted whom and whether they used Facebook, Twitter,
ral rate for the program was 6 percent, two and a half times          MySpace or e-mail. This in-depth information allows companies
higher than the company’s standard 2.4 percent referral rate.         to track which residents are top referrers, while the program
   The company’s largest community, the 2,340-unit Presidential       enables those top referrers to easily reach their friends, co-workers
Towers, had an even more significant ROI. The community               and beyond.
closed 19 referral leases through the program, generating
$34,200 in revenue from filling vacant apartments while               Virginia Love is Vice President, Training and Marketing,
spending $2,000.                                                      Waterton Residential. Ed Spiegel is CEO, Rentmineonline.com.


w w w. n a a h q . o r g                                                                                       July 2010      UNITS 41

								
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