If you’re marketing a multifamily property, you have a variety of marketing channels available to you—these range from sophisticated data mining techniques like regression analysis, to something as simple as the guy in the dinosaur suit flipping a sign on the sidewalk (our personal favorite). You then have to decide how much of your marketing dollars to put toward those channel options.
We’d all like to think that the more sophisticated the marketing channel, the better the results. However, everything needs to be considered in light of its appropriate context. For example, if it’s homecoming and there’s a big prospective student welcome event on campus, we’ll venture to guess that the Leaseasaurus Rex is probably going to get more people checking out your amenities than a data-driven Facebook campaign. But, let’s go back two weeks before the big weekend and now, Facebook is probably your best option for finding alumni with high school-aged children.
So where does the ILS fit in? It’s not black and white. Internet listing services are not necessarily bad in every situation. Just as there’s a certain portion of the apartment-shopping public that only uses Craigslist, or only talks to their friends, there are also those who only use ILSs.
Airplane Tickets to Apartment Leases
Let’s compare it to airlines for a minute. Most airlines can be booked through Orbitz, Expedia, Priceline, etc. but what about Southwest? Southwest has made the choice to forgo the ticket sales from those channels and instead, only offer their tickets through their own direct channel. Why? For several reasons:
Perhaps the most obvious is that Southwest would rather not pay a percentage of the ticket price to those third-party websites.
But going a bit deeper, Southwest has recognized that the money they pay to those third-party sites in commission is actually used against them to redirect people, who might otherwise go directly to Southwest, to those sites. Also, those third-party sites are competing with the direct site on ticket price and special promotions.
There’s also a brand loyalty impact, why would you condition your customers to shop around for the lowest price rather than choosing your brand for the virtues they’ve come to associate with your brand? Shopping on a third-party site strips away the brand nuance and compares the cold hard commoditized facts of one offering to another. Why should Southwest subject their brand to that kind of heartless scrutiny? All these same issues are applicable to using an ILS to fill vacant apartments.
The Cold, Hard Truth About ILSs
Can an ILS rent some units? Sure. But at what cost? Are you prepared to pay an ILS that uses your own marketing money to compete against you to ensure that you have to: (a) keep paying them and (b) pay them more than you would otherwise pay?
If you give your money to an ILS, they will use it to weaken your brand, dilute your SEO and PPC efforts, and commoditize-away your community’s unique character, while conditioning your tenants to make their decision purely on the dollars and cents while setting them up to think of everything you do or don’t do as a comparable to the other places they researched on the ILS.
Your decision to advertise with Internet listing services ultimately comes down to your exit plan. If you just need to fill some units and dump the building on a buyer who isn’t smart enough to discount these kinds of hard-money leases, then go for it. But, if you’re looking to find and keep loyal residents, and build your brand into something lasting, GTMA can help you find a better way.