As the country reopens, the days of operational triage caused by lockdowns are phasing out and new challenges are phasing in. Several reoccurring questions have surfaced in the past two months, which interestingly enough, are similar to the issues that we were trying to solve before the pandemic.
The preexisting conditions were merely exasperated by the crisis and sent us scrambling to find enterprise solutions at a rapid pace. Thus, it appears that this moment of transition is an appropriate one to pause and reflect on which lessons and best practices we should absorb and sustain into a long-term operations strategy and what else is necessary to solve for the open deficiencies. These were a few of the common issues raised:
- We need more efficient leasing practices; how do we use technology to eliminate tedious and repetitive activities and focus on experiential leasing and management instead?
- Our residents are experiencing financial hardships; how can we assist them to minimize delinquency?
- We need a method to provide transparent and proactive communication that reaches all our residents.
- Deliveries have increased by 40%, and it feels like Black Friday every day.
Not surprisingly, the companies providing solutions to these operational issues have been growing at an exponential rate since April. Operators have discovered or are more broadly utilizing the capabilities provided by these companies and will likely be amenable to seeking out technology solutions moving forward.
So, what’s next? Let’s explore what works and where PropTech has opportunities to improve.
Full-Service Leasing Automation
There was an initial shock and nervous hysteria when physical leasing suddenly ceased and required virtual solutions. Now that numerous success stories have arisen from the overnight shift from physical to virtual, late adopters of virtual leasing, self-guided tours, and AI leasing tools have mostly accepted these technologies. What’s more is that customers, the recipients of these changes, are adopting and embracing these technologies.
However, this has surfaced a shortcoming in solutions that exist today. There is no fully digitized end-to-end solution that allows a prospect to go from lead to tour to lease. Dozens of point solutions exist to solve a piece of the puzzle, but operators are often forced to patch together five or more technologies to create a fully automated funnel, which is anything but efficient.
Creating a holistic solution would require connecting the digital dots between email, chat, text, and voice communication that would then transition to scheduling a tour, conducting ID verifications, facilitating self-showings, answering follow-up questions, and then closing the sale by presenting the customer with an online application, all in a consumer grade package that feels human-like. The goal, again, is not to eliminate humans from the process, but instead create efficiency, instant gratification, and level up the roles of the on-site staff to focus on trust-building and guiding customers through the emotional part of the process.
The company that is closest to developing an end-to-end solution is MeetElise. They are known for offering an AI leasing agent that could rival one of your top salespeople and are building on this technology to close some of the gaps mentioned above. Their plan is to design a journey where Elise can answer questions, suggest apartments based on logic, schedule a self-guided tour, conduct ID verification, answer questions during and after the tour, and of course follow-up with an application once the customer has selected the apartment home they wish to lease.
The industry needs more full-service options, rather than point solutions. It is only then that operators will fully adopt and advance to a high-tech automated, 24/7 process that will allow them to reduce operational expenses. The customer will benefit as their experience will be much more cohesive and fluid.
Unleashing Financial Flexibility
When the pandemic began, many operators began offering alternative payment options, which became a valuable tool from both a function and perception perspective. It also brought to light that people's financial situation can change in an instance due to many reasons regardless of if we are in a pandemic or not.
If we want to be able to unleash long-term financial flexibility, we should allow residents to structure payment plans that align with their specific cash flow, as residents don’t earn a substantial part of their income in the first five days of the month when rent is typically due.
For example, Till has a FlexPay product that creates custom schedules for the renter based on their cash deposits and large expenses. This gives both the renter and operator security as they both know that rent will be paid reliably each month, consequently minimizing delinquency and evictions. Till is proactive in its approach and sends correspondence in advance, reviews cash balances before pulling rent, and provides solutions if the renter cannot pay in case of a change in their financial position. Lastly, they provide income data back to the operator so they can optimize their policies and rates.
The takeaway is that if we provide renters with financial flexibility, then regardless of asset type we can minimize expensive delinquency and eviction issues, while opening up affordable options for a broader base of renters. In the future, most operators will likely offer programs at lease signing, enabled by FinTech companies, that allow the customer to opt into a flex plan for a nominal amount upfront.
Leverage Information to Drive Engagement
Providing proactive and transparent communication to customers is critical as we reopen because the rules are constantly evolving, we may open spaces and then need to close them, and our residents have varying degrees of comfort in re-engaging with public spaces. Also, because of social distancing most spaces will only be able to operate at 25% to 50% capacity for the foreseeable future. Consequently, the goal is not just to communicate, but to ensure that your customers receive, read, and stay compliant with this information.
In order to achieve this, operators need mobile-first tools that have extremely high adoption and utilization rates among the resident base so that push notifications reach them in real-time, unlike email or paper.
Rise Buildings has successfully done this by developing an app that essentially functions as the resident’s remote control to interact with the built environment, driving adoption rates upward of 96%. Additionally, the app proactively facilitates necessary safety measures by showing spatial heat maps that provide transparency to both the resident and the operator as to how many people are occupying a space and clean stamps that give residents 100% visibility into when a room was last cleaned. This gives the resident the power to make their own decisions based on accurate real-time data.
It is imperative to maintain credibility and trust with your customers during this time. Operators should adopt tenant engagement technology not only as a communication portal, but one that enables them to provide real-time, contextual information that customers can engage with.
Packages have been an operational nightmare for the past few years taking up valuable real estate in common areas and burdening on-site staff with management issues. Since the pandemic, package volume has increased by an average of 40%, which is the equivalent to a daily Black Friday, rendering this an even greater problem.
This may be the catalyst needed to create a frictionless in-unit delivery solution and likely one that will be developed by a powerful collaboration between existing companies.
How would this work? Hypothetically, packages would be warehoused either off-site or in a back-of-office space/empty retail bay on-premise. Then a runner-like service with trusted agents assigned to the property would deliver packages during preselected times chosen by the resident (as Fetch currently offers). Because the resident knows the runner, they would feel comfortable granting them secure, permission-based entry into the unit to drop off their package. This access would need to be powered by a smart home provider like SmartRent or Stratis.
The key here is first establishing trust between the runners and the resident, similar to the way they trust their maintenance team, and second, sending the resident live GPS type alerts throughout the process to evoke a sense of safety. This direct-to-consumer model would solve for the last 50 feet of logistics, give back an enormous amount of time to the on-site team, and offer a secure, white-glove service to the customer.
As with all these examples, when PropTech companies provide solutions that drive operational efficiency and create a consumer-grade experience for customers it creates a triple win for all parties involved. There has been so much progress made and so much more opportunity left to seize, making this an especially exciting time to watch and see what comes next.