Rental Marketing Analysis: How to Crunch the Numbers
Holla if you played Number Crunchers in elementary school.
In modern rental marketing, there are several distinct stages that a person passes through on the way from ‘person who has seen one of your ads’ to ‘signed tenant.’ In modern rental marketing analysis, each transition between those stages is something that can and should be measured and analyzed. We’re going to give you a quick breakdown of the stages, the transitions, and what the calculated numbers mean in terms of your advertising.
The Stages of a Future Tenant
- Viewer: they have clicked on a link that took them to one of your advertisements.
- Inquirer: they have called, emailed, or submitted an online form on one of your advertisements to start the process toward becoming a tenant.
- Prospect: they have scheduled and then attended a showing for the home, and have taken an application packet home with them.
- Applicant: they have paid the application fee and filled out the paperwork allowing you to perform your tenant screening process on them.
- Draft Tenant: they have passed tenant screening, given you the required deposit, and maybe even pre-signed a lease agreement.
- Tenant: they currently occupy the property.
Each of these stages is a number you can, presumably, gather by examining the data on the sites that you post your ads. (Craigslist is the overwhelmingly annoying exception — their ban on almost every method of marketing analysis techniques is a huge pain.) For example, on one of our recent advertisements, we had 1101 views, 103 inquiries, 98 showings (minus 38 no-shows), and 4 applications in a two-week period.
Crunching the Numbers
There are two ways to look at the numbers that you gather for each advertisement. First, you can look at each number independently in the context of time. In the above example, we had 550.5 views, 52.5 inquiries, 49 scheduled showings, 30 successful showings, and 2 applications per week.
The other way you can read the numbers is to look at them in terms of how many of one successfully moved down the path to the next stage — the ‘conversion rate’. In the above example, the conversion rate from Views to Inquiries was 9.36%, from Inquiries to Scheduled Showings was 95.15%, from Scheduled Showings to Successful Showings was 61.22%, and from Successful Showings to Applications was 18.76%.
Refining Your Crunching Technique
When we turn in reports to our owners twice monthly, we call attention to any ads whose per-week numbers are among the bottom of our ads and any whose conversion rates are among the bottom of our ads. With one further detail — we separate our properties into geographical areas, because there’s no point in comparing the numbers of a downtown-Detroit ad to the numbers of an ad in Royal Oak or Grosse Pointe.
It’s also possible (and sometimes useful) to calculate these numbers independently for each of the advertising channels you use — because the numbers from Zillow will often be completely different than the numbers from your company website or HotPads or Craigslist, etc. While this level of marketing analysis is less useful in many cases, it can be used to tell you which of your advertising channels are the ones giving you the most tenants (and thus the ones you should be focusing on).