According to a 2009 NAHB Multifamily Preferences survey, the top three reasons why tenants move are for:
1) Better quality place
2) Single-family unit
3) Better location
But what if you could offer your tenant a different property across town that is a single-family home with better amenities and closer to work? Give them a free moving truck for a day and take $500 off the first month’s rent. They just might take it, and you could save a customer!
Ever wonder why your wireless phone provider will bend over backward and give away free unlimited texting and throw in a new phone to keep you as a customer? Because it works. They know the lifetime value of each customer is far greater than the cost of that new phone and a bunch of text messages.
This same principle applies to landlords and property managers as well. The easiest way to boost your rental profits is by keeping your best tenants longer. If your average rental price is $1,500 per month and your average “lifetime” with each tenant is 30 months, that’s a lifetime value of $45,000. But what if your best tenants stayed a little bit longer, like say 34 months, that’s an additional $6,000 you could generate from each tenant! Not only that, but you reduce your risk of getting a deadbeat tenant when you rent the place again.
When reaching former tenants, use two tactics to your advantage –
1) Timing. Consider how long it’s been since they left; they may be locked in to another lease agreement in their place. So, you should contact them at 10-11 months after their departure, assuming that they are in the 10th or 11th month of a one-year lease agreement and may be up for renewal soon. Your winback message (whether it’s a personal letter, a phone call or an email) should reach them a month or two before their new agreement expires to give them time to consider and evaluate your offer. Just in case they were thinking of moving again at their end of their first year lease.
2) Pain points. You have to address the reason why they moved out in the first place. Often it’s for some external factor out of your control like a new job, bought a home, or such. But for things that you do have control over, address any specific pain points “head-on”.
That is, show how you are different or how you’ve changed to respond to their specific reasons for leaving in the first place. The only chance you have of winning them back to one of your properties is to show specifically how your properties have improved or how a different location is exactly what they need. This is no time for subtlety; so be direct. Let’s face it. It costs your former tenant time, money, and hassle to move out and find a new place. So, to it’s going to take a lot for them to even consider returning.
Maybe it doesn’t seem worth it. Oh, but it is!
Of the dozens of marketing campaigns I’ve been involved in, former customers always, always, always respond better and are more profitable to reach than new prospects. A message of “we miss you” or “discover why we’re different” can break through and get attention, convey your sincerity and put your properties right back in their consideration set of options for their next new and better place to live.