The Resident Connection, Written Posts

5 Multifamily Marketing/Tech Models in Trouble

13 Comments 03 April 2012

Last week Blackberry/RIM and Best Buy were two businesses that went on a list of dying companies.  It’s often hard to predict what the future holds, and we have a tendency to get tunnel vision when it comes to our own businesses.  It’s unfortunate these companies have found themselves to be in dire straights, but for me I look at situations like this as an opportunity to reflect on my own business and industry. What may look like a solid model today, may not be tomorrow.  With that, I’d like to share my list of five multifamily marketing/tech models that may be in trouble.

1. The ILS (Internet Listing Service) – I’ve actually been known to say that the ILS is an absurd marketing idea.  While I may have been trying to generate some controversy with that statement nearly 3 years ago, it’s interesting to think today I actually believe the ILS model is in trouble a bit.  At least the way the big players look today.  If you look at Apartments.com, ApartmentGuide.com, ForRent.com, Rent.com, Move.com, etc., you’ll find their models really haven’t changed much since they started.  However, the way people search online is changing.  We may see a few fall off over the next 5 years if they don’t evolve in an aggressive way.

2. Pay Per Lease Marketing Model – As tracking becomes more sophisticated we’re finding (and concluding) renters are using more than one source to find an apartment.  Is it fair to give all the credit to a single source and pay them a premium for it?  I say NO FRIGGIN WAY!  Marketers are getting smarter and this model is a gimmick that has taken advantage of people for too long.  I think this fad will most definitely pass in the near future as pay per lead or flat subscription pricing will win.

3. Phone Tracking Services – Now, before Mike Mueller comes after me on this one I’ll just say that I really hope he has something magical up his sleeve for this space with his new acquisition.  I’m just sharing what I know and foresee here.  If people are dropping their ILS expenditures, like Bozzuto (and J.C. Hart), then the demand/need to track phone calls will go down.  Fewer numbers needed and alternate ways to do it.  That, and new sophisticated business phone systems can do it in house.  No need to outsource this service if you don’t want to.  Larger companies will begin to bring this in house and many others will follow as the equipment gets more affordable.

4. Proprietary/Closed-Source Websites – The speed of technology advancement and the Internet today is difficult to keep up with.  New devices (tablet, phones, etc.), new apps, and new social networks move too fast for many closed-source web services to keep up with.  With open-source websites, however, a crowd-sourced larger effort is made to keep up with these tech advances.  It’s just a scale issue and it compounds every year.  Before investing in your next website just keep this in mind.  Ask not what they can do for you today, but what they can do for you a year from now.  (P.S. – Ask them what they will charge you for those innovations a year from now as well.)

5. Closed-Source Software & Services – Hey, I get it.  Keep it all in the family, don’t easily integrate with anyone or any service, and nickel and dime people to access their own data.  Sounds like a profitable business model.  However, it’s all changing, and open-source services are helping many businesses with their sales tracking, accounting, email, and other miscellaneous business functions at a fraction of the cost.  Software for the multifamily industry is actually not the norm in this area, but that could all change.

I’m sure I’ve missed a few.  Agree?  Disagree?  Would you like to add any?  Let me know, and we can discuss some more when I see you AIM 2012!  There’s still time to sign up by the way.

  • Jelliott

    You are spot on, Mark!  I come from automotive which is a few years ahead of multifamily and I saw all your predictions beginning.

    • http://www.markjuleen.com Mark Juleen

      Jim, I like to say I came from automotive as well (although that’s almost 9 years ago now).  Multifamily is definitely lagging in tech.  This really isn’t much of a stretch to think these models could be in trouble.  Thanks for stopping by and see you at AIM!

  • http://twitter.com/SGreenough Sarah Greenough

    Great points.  The evolution of getting “the word” out to the public for any industry has been evolving at such a rapid pace over the past 3-5+ years it seems foolish to stick to old business models.  In fact, yesterday I actually met with one of our local newspaper reps (as a favor so stop rolling your eyes) and they have added a digital media division to their operation offering social, mobile & geo-targeted search advertising.  To me, this epitomizes the need to embrace evolution and change to stay in the game.  Looking forward to chatting about this further at AIM! 

    P.S. You’re becoming the Nostradamus of Multifamily!  ;)

    • http://www.markjuleen.com Mark Juleen

      Woohoo #AIMCONF!  My favorite time of year!!!  Thanks Sarah.

  • duncan

    Don’t forget these – websites with limited functionality – and limited email programs – bad on their own BUT then add in “We’ll buy the domain name for you” and then you have to depend on us forever. “But its ok coz apartment people are used to paying per month” so lets exploit the hell out of them (and throw all ethics to the wind too). Oh and I’ll be your guide and help you up the social media mountain for $200 or $300 bucks a month. Oh wait that company already died. LOL. And one last one – people that have no idea, no experience and no credibility with internet marketing and search (hint: moments) / social who give seminars. 

    • http://www.markjuleen.com Mark Juleen

      Direct and to the point as always.  Thanks Mr. Firebelly!

  • http://www.facebook.com/profile.php?id=506211286 Richard Hughes

    Pay per lead has exactly the same problems as pay-per lease. Multiple touch points before the transaction. If you’re going to credit the refering channel, per lease is still viable and actually adresses qualitative issues in traffic.

    • http://www.markjuleen.com Mark Juleen

      Rich, excellent point on PPL having the same issues.  Not sure if I agree with you on the “qualitative” position for the traffic though.  Is it a better quality lead b/c someone gives the user a $100 reward?  Still some variables to consider in my opinion.  

      The reason I think pay per lead won’t go away soon is because of the cost.  $10-15 per lead can be easier to swallow than $400/lease.  Of course, the PPL model could die as well.  We may not see anything die completely, but I think you and I can agree there are definitely flaws in the “pay per” models.

      • http://www.facebook.com/profile.php?id=506211286 Richard Hughes

        Don’t necessarily disagree, but I strongly suspect that not all channels are the same and not all traffic is the same with regard to propensity to convert to lease, lifetime value, etc.

        • http://www.markjuleen.com Mark Juleen

          Definitely!

  • http://www.40dollarsdaily.blogspot.com/ Mercy

    This is a very resourceful post. It has greatly helped me to learn more and improve in my online ventures. For anybody wishing to know more I recommend this site.

  • Virtual Mike

    Boy do I have a few surprises for you Mark!  Let’s revisit this article in a year.  Hint – Do you really want to track a phone call or do you want to track a communications thread?!?  Another hint – What percentage of traffic comes from mobile today and what will that be in one year?  Five years? Seems to me the “phone” is still very relevant!  

    • http://www.markjuleen.com Mark Juleen

      I’m sure you won’t disappoint Mike!  Look forward to seeing your magic. :)

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