Referral programs are useful tools for all sorts of businesses to grow a customer base and promote brand recognition and loyalty. It’s no different for multifamily residential communities.
What Is a Resident Referral Program?
In multifamily apartment residences, a resident referral program is a lead strategy that building management uses to provide incentives to current residents for referring new residents that they know personally. These incentives are typically rewarded if the referrals become residents, not simply if they apply for residence. Rewards most often come in the form of rent discounts, cash, gift cards, or household items.
These types of programs are often a real win-win because residents truly appreciate the perks and managers see the value of word-of-mouth marketing and facilitated resident relationships. Nevertheless, it is always important to make sure your multifamily building’s referral program is well-suited to its community and its occupancy and revenue goals. Continually measuring and adapting your apartment building’s resident referral program based on its ROI, or return on investment is the best way to make sure you’ll see desirable results.
Above: Example of a resident referral program from NEMA in Chicago, IL.
5 Benefits of a Resident Referral Program
1. Reduces Vacancy Rates
Referral programs are only one piece of the puzzle, of course, but they can help reduce vacancy rates by keeping your residents engaged and feeling appreciated. Rewarding residents helps ensure that they have a great living experience in your building, which can lead them to stay in their apartments longer, leaving you with fewer vacancies.
2. Lowers Resident Acquisition Cost
The true costs of attracting applicants and acquiring new residents from scratch can be steep, but with resident referral programs many of the costs that typically come with securing new residents can be significantly cut. A smaller pool of great applicants means you spend less time and money on your multifamily marketing and advertisements, showing apartment homes, and moving in new residents.
3. Attracts Better Tenants
The relationship between a resident and their property management team is a two way street. In much the same way that you can use resident referral programs to demonstrate your appreciation for your tenants, they can demonstrate their loyalty as community members by referring trustworthy applicants. According to the Apartment Association of Metro Denver, referrals are “18% more loyal than other customers, and are four times more likely to refer more customers to your brand.”
4. Builds a Better Community
When new residents come in already knowing (and liking) some of your existing residents, it increases the likelihood that they’ll already feel like they’re involved in your apartment community. This can lead to higher participation rates in community events, and boost residents’ overall happiness with your multifamily building.
5. Rewards Your Current Residents
Showing residents that their contributions are appreciated is a great way to make sure they feel satisfied and increase the likelihood that they will refer more of their friends and family to become residents in your community. The rewards you offer should really be all about the residents – make sure that what you’re offering matches up with their wants and needs. You can even send out a survey to find out the types of perks that would be most appreciated!
How to Start a Resident Referral Program for Your Multifamily Community
1. Determine the Referral Program’s Incentive and Rules
Start by looking at what types of incentives you can feasibly offer for resident referrals based on your budget and the cost-savings from a successful referral. Then find out what your residents would appreciate most. You can zero in on one reward or find a way to offer residents a choice between a few different options, like rent discounts (you can offer this to both referrer and referral), gift cards, household appliances, amenity perks, or home gifts like an Amazon Alexa or a Google Home.
2. Educate Your Property & Leasing Staff
Every team member at your property should be able to provide residents with information about your resident referral program or point them in the right direction. It can be especially helpful to sit everyone down and tell them about the program in person, which can sometimes help the information stick better than simply sending an email.
3. Draft an Email and Landing Page
Distribute information about your resident referral program to all existing tenants by sending it to them in an email and adding a landing page to your multifamily building’s website. The email and landing page should both let residents know how they can submit their referrals, what incentive they will receive for qualifying referrals, and what criteria their referral needs to meet to be considered “qualifying”.
4. Drive Awareness of Your Resident Referral Program
This isn’t a one-and-done scenario. Keep reminding your tenants about your resident referral program and be sure to make sure all new residents are aware of it on move-in as well. In addition to informing your residents via email and on a website landing page, you can put signs up on the property, link to your landing page on social media, and send reminders along with building newsletters and notices.
5. Track Referrals
Keep an organized log of all the referrals made by your residents. Some of them may not apply right away and you’ll want to make sure your referrers get the credit they deserve. Keeping an organized log of referrals will be incredibly useful when a vacancy arises. It will give you a solid pool of leads to work from as you work to fill the apartment home.
6. Keep Residents Updated on Referral Status
Let your residents know when you’ve reached out to their referrals and follow up once it’s been determined whether the referral will qualify. You may not be able to tell them why or why not their referral worked out or not, but they will appreciate the transparency. It can also be nice to send residents who submit referrals, successful or not, personalized thank you notes or a small gift to drive the message home.
7. Reward Residents Quickly
Once you’ve moved in a resident referral, take the next step and reward your referring resident promptly. If they provided a referral, it’s because they’re interested in the reward and will expect to receive it in a timely manner.
5 Examples of Killer Resident Referral Programs in 2021
1. NEMA Chicago
NEMA Chicago is a “smart” luxury residence based in Chicago’s South Loop. Its referral program pairs nicely with its many amenities, giving its residents a comprehensive customer-appreciation experience. NEMA Chicago rewards residents with a $1,500 rent credit when their referral signs a new lease and moves in.
2. Rent SF Now
Rent SF Now is a Bay-Area property management company focused on updating classic and historic buildings and promoting neighborhood living. Residents with Rent SF Now can receive up to $2,000 in rent credit per referral. Residents’ first qualifying referrals get them $750, their second gets them $1,250, and every referral after that earns them another $2,000 credit.
3. Center Square Lofts
Center Square Lofts is a luxury apartment building in Allentown, Pennsylvania that offers residents high-end features and an abundance of amenities. This company’s referral program offers residents $250 for each referral that moves into a City Center Residential property.
4. Planned Property Management Apartments
PPM Apartments in Chicago manages more than 3,700 apartments throughout the city. Its buildings range from vintage to modern and the property group prides themselves on its well-maintained buildings and quality amenities. PPM’s referrers receive a $1500 rent credit when their referral signs a lease.
5. Highland Management Group
Highland Management Group in Edina, Minnesota manages and owns 35 properties across the Twin Cities. This company offers referrers $300 when their referral signs a one-year lease, and $150 for a 6-to-11-month lease.
Madelaine is a regular contributor to the 2ndKitchen blog. She is also a Compliance Monitor at The Habitat Company and Chief of Staff at Obvi, a non-profit organization focused on promoting gender equality through storytelling and self-expression.