Multifamily KPIs: Aligning marketing & operations for success

Have you ever felt like your marketing team is constantly being asked to generate more leads, while operations questions the cost? Or maybe leads aren’t being followed up on consistently, leading to missed opportunity and lost revenue?

Unfortunately, this disconnect between marketing and operations is all too common in the multifamily industry. We spend a lot of time debating budgets and who’s “spending too much,” but not enough time focusing on what truly matters: return on investment.

This article will help you bridge the gap between marketing and operations by establishing a common language built on key performance indicators (KPIs) that directly impact your bottom line.

What to expect

• Identify common challenges faced by marketing and operations teams
• Explore solutions and process improvements to foster better collaboration
• Learn about 6 essential KPIs for multifamily success
• Gain actionable steps to implement a shared KPI dashboard and communication strategy

Identify common disconnects

Start by seeing if you identify with some common disconnects between the marketing and operations teams. Does any of this sound familiar?

• Marketing generates leads, but operations questions the overall cost. How can you demonstrate the value of your marketing efforts?
• Leads go cold because of inconsistent follow-up. How can you implement a system to ensure timely and consistent communication with prospects?
• High resident turnover eats into your occupancy rates and budget. How can both marketing and operations work together to improve resident retention?

Work to bridge the gap

What can be done to bring teams closer together? Consider gradual shifts to address the disconnects. Even small changes will have a big impact over time:

• Align on common goals: Focus on shared objectives like occupancy rate, resident retention and overall revenue growth. When everyone’s working towards the same goals, decision-making becomes more efficient.
• Embrace data-driven decision making: Analyze lead sources, conversion rates and resident retention data to identify areas for improvement. Regularly share high-level reports with both teams to keep everyone on the same page.
• Schedule regular communication: Consistent meetings between marketing and operations are essential to discuss KPIs, challenges and opportunities for collaboration.

The common language: KPIs for multifamily success

KPIs create a shared understanding of performance, efficiency and impact. Here are 6 KPIs that multifamily marketing and operations can align on.

1. Net operating income (NOI)

• What it is: Total income minus operating expenses
• Impact on revenue: Bottom line, NOI is your revenue. This number has an interconnected impact that should keep everyone focused. Whether something has a measurable impact on your NOI is a great starting point for any budget discussion.

2. Average days vacant

• What it is: The average number of days a unit remains vacant before being leased
• Impact on revenue: Significant. Fewer vacant days means more revenue. Even a small change can make a big difference. See the chart below to see what shaving 5 days off can do for a single unit, then ask yourself where can you save time? Consider inspection, make-ready and lease-up.

3. Trend %

• What it is: The percentage of occupied in the future, usually viewed at 30, 60 and 90 days
• Impact on revenue: Future. Tracking and considering your trend % means you are able to plan ahead. For example, if your occupancy rate is 89% today, but the 60-day trend is 92%, you might not need to spend more money on marketing right now.

4. Average follow-up

• What it is: The average frequency of follow-up with prospects
• Benchmark: 3 times per prospect
• Impact on revenue: Definite. Studies show that increasing follow-ups from 1x to 3x per prospect increases leasing velocity by 7%. How often are your leasing agents touching base with prospects?

5. Online reputation

• What it is: Your property’s aggregate rating
• Benchmark: 4.0 or higher with 1 review/ 100 units/ month
• Impact on revenue: Multifaceted. Bad reviews (or lack of reviews) stop 79% of renters from visiting a properties. Having 10-20 reviews on an ILS increases conversions 3x; having 30+ increases conversions 7x. Properties with a rating of 4.0 or higher have a 12% higher renewal rate. Knowing all that, can you really afford not to track this KPI?

6. Return on ad spend (ROAS)

• What it is: How much rental income your produce for every $1 spent on marketing, calculated by source
• Impact on revenue: Dramatic and measurable. You want to spend your marketing budget where it gets results, right? This is how to find out which sources are working for you and which are underperforming. ROAS is a metric that is easy to understand across departments. 

Next steps

• Create a shared KPI dashboard with the above information that you update monthly
• Include occupancy, tracked month over month
• Set up monthly marketing meetings, invite operations leaders at least quarterly
• Allow plenty of time for questions in the first meeting
• Set the expectation that both teams will leave each meeting with action items

Acknowledgements

This article is inspired by a session titled “Marketing and Operations Aligned!” at this year’s Apartment Innovation and Marketing Conference. We’d like to extend a huge thank you to the experts who presented these multifamily KPIs and shared how they apply these metrics in their roles.

For more information, we encourage you to connect with Sarah Wieman, manager at REACH; Anne Baum, director of marketing at Towne Properties (data is her middle name, after all); and Chris Johnson, director of marketing at Ashland Greene.