Bethesda, they notice the warm, comemporary look, embellished with
yellow and orange accents. A leasing professional hands them a brochure
that complements the decor. They begin to peruse the community's
amenities and the benefits the Washington, D.C., suburb has to offer,
noting the photos, maps and floor plans that help make this community
memorable.
Its first-class marketing materials seem suited for market-rate
apartments, but The Fields of Bethesda is a tax-credit community--one of
28 managed by KSI Management, the Washington, D.C., area's largest
owner and manager of affordable rental communities. And that's
exactly the point, according to Karen Kossow, KSI's Assistant Vice
President of Sales and Marketing.
"I'm a big believer that the quality of the marketing
materials you hand out have an impact on who applies," Kossow said.
"Previously, there wits some thought in the industry. that the
tax-credit customer was a lesser customer. We believe thin all prospects
at all communities should be treated equally in terms of
marketing."
KSI's philosophy has generated more traffic and higher
occupancy, bringing KSI's portfolio-wide occupancy rate from 93
percent two years ago to 97 percent today. "One Rockville, Md.,
community that had never topped 90 percent occupancy reached 100 percent
in only six months," Kossow said. "And more communities are at
maximum rent. Some of the success is market driven, but we are also
advertising better."
Advertising better doesn't have to break the bank. In fact,
since KSI rolled out its new brand of marketing, costs are down 34
percent from the end of 2003 to the 2005 budget season, according to
Kossow.
Sophistication and Standardization
Jennifer Nevitt Casey, CEO of Bravo Strategic Marketing, has urged
owners and managers to shed their misconceptions of the tax-credit
resident since she became a consultant in 1994.
"The challenge in the industry is that many have false
perceptions about tax-credit renters--that they are lower quality
reuters, that someone who rents in a tax-credit community is just lucky
to have a home," Nevitt Casey said. "Not at all. These
residents deserve to be treated like they made a good housing choice.
Hold the customer in the utmost respect."
Since the Low Income Housing Tax Credit (LIHTC) program was created
by the Tax Reform Act in 1986, the market has endured cycles of
prosperity and decline, at times pitting tax-credit communities against
market-rate communities that were trying to attract the same residents.
"After experiencing that cycle, more owners are willing to invest
in marketing tax-credit communities, knowing the cycle could repeat
itself," Nevitt Casey said. "During the first decade of the
program, owners were pioneers. In the second decade, marketers are
maturing and have a more sophisticated approach."
Part of that sophistication for KSI involved implementing
portfolio-wide branding standards. Since 2003, 14 of its 28 tax-credit
communities have been transitioned to The Fields brand, which includes a
community rename, updated signage and marketing collaterals and
inclusion on The Fields' Web site, www.thefieldsapts.com.
"Previous marketing pieces were not as professional or
appealing," Kossow said. "Onsite staff did its own fliers and
there were no standards. Site teams were used to being able to do what
they wanted, and some still try to. But with 28 communities you must
have consistency from a branding standpoint while maintaining the
individuality of the community."
KSI has extended that branding to the leasing office. "The
scheme ties into our marketing materials," Kossow said. "The
colors are very warm with a contemporary look."
Nevitt Casey said, "I never recommend cutting corners on logo
design, monument signage and the quality of the interior finish of the
rental office. This is because people form brand perception by their
visual experience with you, and these have the highest impact
visually." Nevitt Casey also insists on professional attire or
uniforms with name badges for onsite staff.
Spending and Saving
Rebranding a tax-credit community can carry a hefty price tag for
an asset with fixed rental rates. "From signage to marketing, it
took about $50,000 to transition a community to The Fields brand, and
that is money that someone has to be willing to spend," Kossow
said. "But I truly believe there are ways to do more with less.
Whatever we do, we have to find a lower-cost way of doing it."
While many companies had traditionally relied on expensive print
advertising exclusively, KSI discovered that tax-credit renters have
sophisticated Internet habits as well, contrary to the beliefs of some
apartment owners.
"In 1997, I worked with an owner who thought that the Internet
was just a fad and could not be convinced to spend his marketing dollars
there," Nevitt Casey said. "And he thought that tax-credit
customers would be too 'poor' to access the Internet."
To challenge that belief, RSI hired an advertising agency to
conduct a focus group and found that the data supported widespread
Internet usage among lower-income renters.
"We were very analytical," Kossow said. "KSI had
been focusing exclusively on print advertising because there was a
belief that tax-credit customers did not use the Internet," Kossow
said. "But I've seen it work. We've made it work."
Kossow said that KSI has found ways to incorporate less-expensive
Internet advertising and to use smarter print advertising strategies.
"We shifted from print sources that weren't working as
http://www.youtube.com/watch?v=5CqUYBopWLs
their attention to printed and online marketing materials.
"Our brochures are fun, warm and colorful," Kossow said.
"We use actual community shots woven into our templates. Each
brochure costs between 57 cents and 87 cents, depending on the quantity
of the print run. And the whole marketing package, including the bag it
comes in, is less than $1."
Once it created the brochures, KSI designed its Fields Web site to
match. KSI hired a company to make sure The Fields topped the search
engine listings on sites such as Yahoo! and Google. "We designed
the site to organically optimize well and we paid a lot of attention to
that," Kossow said.
Another high-tech aspect of the site involved adding a third-party
software program to allow residents to make apartment reservations
online. According to Kossow, one community received 30 reservations in
30 days, and in two weeks, KSI received 132 reservations at 18
communities. From the reservations, KSI saw a 20 percent closing rate,
which was in line with typical tax-credit closings. "My
expectations have been exceeded," Kossow said.
One of the challenges unique to tax-credit marketing is deciding
how to position the income requirements in the marketing materials.
"There are two schools of thought," Nevitt Casey said.
"Some owners decide never to show the income grid so as not to
throw it in the face of the world that this is a tax-credit community.
As a result, you get a lot more walk-ins who are over-qualified, and the
extra traffic can wear down the leasing team. Or you can tell it like it
is and put the income grid in your advertising."
KSI opts to include the grid. "We found it valuable to include
the income grid in all advertising," Kossow said. "This helps
pre-qualify customers. We also include an income calculator developed by
a third-party software provider on our Web site that lets customers know
that they over-qualify, but it does not stop them from making
reservations."
According to Nevitt Casey, the best strategy is to study the
competition's income grid placement. "Talk to apartment
publications' account representatives about what other companies
have had success with in your market."
Transitioning Techniques
While changing the way a company views marketing for tax-credit
communities can be daunting, Nevitt Casey recommends some simple steps
to get started.
"Look at your visual brand and see if it needs some dusting
off before totally investing in a new campaign," she said.
"Before spending a dollar, take what is there and dust it off.
Remove the clip art from the logo and give the leasing center a paint
job."
Investing in training for onsite staff can go a long way toward
getting buy-in for a new marketing approach. "If you have been
doing things the old fashioned way for 10 to 15 years, you will need to
educate your team," Nevitt Casey said. "They have been
order-takers for years and need to learn how to be someone who listens
well and creates empathy--and that does a lot for existing customer
relationships. If you have a dynamic tax-credit team, that is an
accomplishment."
Kossow said KSI is continuing to take its marketing efforts to the
next level. "We want all our marketing materials and all our
communities to be the most appealing to residents," she said.
"We did what we thought would work and tried to add a lot more
sophistication to tax-credit marketing."
A POWERFUL PRESS PROGRAM
In addition to advertising strategy and print and online marketing,
community outreach is a key component of a successful tax-credit
marketing initiative, according to Jennifer Nevitt Casey, CEO of Bravo
Strategic Marketing.
"With market-rate communities, it is not imperative that you
have a press program in the community where they are located,"
Nevitt Casey said. "You don't need to send out press releases
and press kits. The community generally understands the value of
market-rate apartment living."
However, for a tax-credit community, the apartment company must
implement a robust outreach program. "You are really going to be
doing a lot of street marketing," Nevitt Casey said. "The
education process is critical to success. Keep in mind that the
community may look down on tax-credit communities and think you are
bringing in prostitutes and drug rings."
Also important is promoting your community, by sharing its Web site
with human resources directors for local service industry companies.
"HR directors look for tax-credit communities to point their
employees to affordable housing," Nevitt Casey said.
Jeanine Gajewski is NAA's Manager of Communications. She can
be reached at 703/518-6141 Ext. 141 or jeanine@naahq.org.
