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Resident response reaction: customer satisfaction at the nation's largest apartment owner, AIMCO, has reached an all-time high in part because of its in-house online resident survey.

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A visit to the basement can turn up just about anything. During one such trip, AIMCO and its Chief Property Operations Officer Jeffrey Adler found an effective method for surveying its residents, improving retention, building loyalty and improving employee morale.

Working out of AIMCO's e-commerce leader Jeff Anderson's basement one weekend about five years ago, the company created a simple, Web-based survey that is sent to residents during multiple touch-points. It measures staff effectiveness during a resident's first visit, move-in and maintenance work-order execution, as well as eight months into the lease.

The survey is inexpensive to administer. It takes only an e-mail server, and nothing is printed. "Creating it wasn't rocket science," Adler said. "We wrote the program one weekend. The questions are based logically on what a resident would want in customer service."

The 10-question touchpoint survey includes basic questions specific to the experience surveyed, such as "Did we leave the place clean? Did we perform the work-order correctly and in a timely fashion?" Included is one common question: "Would you recommend this community to your friends, family and co-workers?"

Adler said the concrete feedback from residents on the surveys enables AIMCO's employees to recover quickly from customer service complaints and to "get back up on our feet by making it right, right away."

It is crucial that AIMCO gains this knowledge to maintain its ranking of No. 1 on National Multi Housing Council's Top 50 list of apartment owners and managers with nearly 200,000 units. AIMCO operates a full-product range of apartment communities from luxury high-end, mid-range and workforce to "affordable housing, and targets older, well located communities that can be redeveloped at higher price points over time. Last year, AIMCO redeveloped 5,000 units--the equivalent of 16 new groundup 300-unit communities.

Adler said immediacy is critical in residents' minds. "You have to take care of them right away, and go above and beyond when doing so," he said. "We want our residents to be a life-long advocates for us. We want crazy advocates. Just satisfying them is not enough."

We'll Buy You Dinner

Adler often speaks to MMCO staff about performance in a town hall setting. During a recent gathering, he read a letter written in response to actions taken based on a survey completed by a Salt Lake City couple who said they were a bit miffed when moving in.

"For whatever reason, they indicated in their survey that they felt rushed by the community manager during move-in," Adler said. "The community manager didn't feel as if she had rushed them, but when she got this word about their reaction, she visited the couple the next day and apologized, offering them a gift card for a local restaurant. The community manager didn't speak defensively, talking instead in a non-threatening way. These residents were impressed enough to tell all of their friends about our great service and to send me a letter."

Adler said obtaining customer service information through an outside party in real-time, although not expensive, requires an intense level of management emphasis. "The important thing--the thing that some companies that emphasize customer service miss--is that once you get the information, you have to do something with it," Adler said. "And unless you can react in a relevant way, immediately, nothing changes operationally for your company."

Touchpoint survey results are delivered to the community manager and right on up MMCO's chain of command to regional vice presidents and senior vice presidents.

"We measure the responses monthly and they are part of staff members' annual performance reviews," Adler said. More importantly, he said, they enable staff to enhance their residents' experience.

How Polite of You

Adler said recent reports showed it has 24,000 survey-generated "touches" with residents per month and about 300,000 per year.

Before implementing the survey, Adler said MMCO did very little to measure resident satisfaction.

Community Courtesy

One survey question asks about the courteousness of office staff on a five-point scale. A community with an average score of 90 or more will drive retention, Adler said.

"Any score below that increases resident turnover, which raises costs and reduces occupancy," he said. AIMCO went from 90 to 94 in the past first year. Two years ago, it scored in the mid-80s, Adler said.

Adler, who joined MMCO in January 2002, spent the previous 10 years with Progressive Insurance, helping the company craft its brand. There, he applied his Wharton consumer marketing background and applied again it to AIMCO's circumstances.

The centerpiece of the entire survey system is the Net Promoters Score (NPS) formula (see box below). The NPS is a simple, direct and easily understood measure. "Taking and measuring performance scores galvanizes an organization," he said. "We can't improve our service without the numbers. It puts great service front and center in the same way that we measure occupancy, rental rate and NOI growth. We did a benchmarking study and found that the industry as a whole scored +3, and world-class organizations often score greater than +60. Two years ago, we scored a +18. We reached 40 percent in Q4 2007. That's incredible."

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Adler said there was some resistance from management about using such a survey, because it exposes the performance of everyone. But he said site-level employees have welcomed the method.

"This survey gives them recognition for the good work that they are doing," Adler said. "It empowers them and creates friendly, positive competition. Without this visibility, you don't know how well you are doing. Just looking at financials won't tell you everything."

He said the survey results benefit AIMCO when it shares such information with investment partners. "This shows them who we are, and let's them know they are buying into our people, not just into our properties," he said.

Good Service is Money

Reaching the residents online had presented a challenge.. Today, AIMCO has e-mail addresses for 60 percent of its residents, up from 5 percent when it introduced the survey. Of its student housing residents, living in approximately 5,000 units, 80 percent provided e-mail addresses.

He said AIMCO asks for e-mail addresses from residents at lease signing. If they do not wish to provide one, AIMCO asks them again each time the community has contact with the resident, such as when paying rent.

For those who still object, AIMCO simply tells them to let the company know if they change their minds.

"When you are as big a property management company as we are, it is hard for management to know what is happening at all of their sites," Adler said. "When you have so many communities, you can't just walk the dirt. You have community managers, but you need the information in real time."

Adler said the apartment industry overall is trending toward being a customer-service business rather than one concerned simply with financial-oriented transactions.

"Our goal is to create a set of memorable experiences," he said. "Our surveys are a tool, not an end. It is not a magic bullet. Great service is paying attention to so many small details executed every day."

Net Promoters Score

Companies obtain their Net Promoter Score (NPS) by asking customers a single question, such as "How likely is it that you would recommend us to a friend or colleague?"

Customers are asked to rank their likelihood on a 10-point scale. Based on their responses, customers can be categorized into one of three groups: Promoters (scores 9 and 10), Passives (scores 7 and 8) and Detractors (scores 0-6). In the Net Promoter framework, Promoters are viewed as valuable assets who drive profitable growth because of their repeat or increased purchases, longevity and referrals, while Detractors are seen as liabilities who destroy profitable growth because of their complaints, reduced purchases/defection and negative word-of-mouth. Passives neither hurt nor promote the company.

Companies calculate NPS by subtracting their percent of Detractors from their percent of Promoters. Proponents of the Net Promoter approach claim the score can be used to motivate an organization to become more focused on improving products and services for customers. They further claim that a company's relative NPS (its score relative to competitors) correlates with revenue growth relative to competitors.

First introduced in a 2003 article in the Harvard Business Review, the concept is discussed at length in "The Ultimate Question: Driving Good Profits and True Growth," written by loyalty business-model expert Fred Reichheld of Bain & Company, The Net Promoter approach has been adopted by many large companies, including General Electric, Allianz, Procter & Gamble and American Express.

Source: Wikipedia.com

Paul R. Bergeron is NAA's Director of Communications. tie can be reached at 703/797-0606 or paul@naahq.org.
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Author:Bergeron, Paul R. III
Publication:Units
Date:Apr 1, 2008
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