3/13/20: COVID-19 - Reid & David
[00:00:00] David Staley: [00:00:00] All right. I'm David from the digital dudes podcast.
[00:00:03] Reid Wicoff: [00:00:03] I'm Reid.
[00:00:04] David Staley: [00:00:04] And I think, Reid, this may be the, I don't know, maybe it seems like it's the episode you've been most excited about for some reason.
[00:00:12] Well, in a little while. Yeah,
[00:00:13] yeah, yeah. I mean, you've been there. You always get excited to do an episode, but I just made in particular like we got it.
[00:00:19] You're like, Oh, we got to get this done.
[00:00:20] Reid Wicoff: [00:00:20] Yeah, and hopefully it doesn't come off the wrong way. I just think it's really fascinating. And of course, we're. Want to do everything we can to, to help the industry, not just our clients, but, um, we have some strong opinions about how to handle, uh, the current climate right now with the Corona virus.
[00:00:36] You know, uh, pandemic.
[00:00:39] David Staley: [00:00:39] Yeah. So, uh, in this episode we start out by talking about how you might want to change your messaging and creative. Um, we talk about some options about, about targeting changes on different platforms, um, and we for sure towards the middle of the episode. I mean, we definitely get derailed, but, and I think one of your favorite parts Reid was starting to get into the budgets.
[00:01:00] [00:01:00] Yup. What else did we talk about that, why they may want to continue past the break?
[00:01:05] Reid Wicoff: [00:01:05] No, I think, I mean, we had also a few predictions about who's going to win and who's going to lose within multifamily. And you know, potentially I guess everybody loses. But, um, I think there's going to be some interesting, you know, shifts.
[00:01:15] Uh, but those are just predictions. It was more about budget, targeting, and creative platforms.
[00:01:20] David Staley: [00:01:20] Yup. And we talked a little bit about the difference between multifamily, student housing, and active adult or senior living and, and the slight nuances you may see there. That's a little bit muddied. Somewhere in the first or second, third, but it's there if you, if you, uh, yeah, decided to listen on.
[00:01:37] All right. See you on the other side.
[00:01:38] Okay. Well, Reid. Usually I'm flying by the seat of my pants. No. [00:02:00] Yes. I mean, yeah. Yeah. But oftentimes if there is prep, I might prep more than you, but this time it seems like you really got into this topic, so I'll let you start off, but I know, well, I'll just let you start off.
[00:02:11] Yeah. Well, one section of it, but, uh, it is our COVID-19, podcast, and we probably won't be the first, and this.
[00:02:20] May not be the last, but, um, yeah. So the question is, is how does it affect this industry? Um, specifically our peeps, which are the marketing folks, but also the operators and how they're thinking about it. Uh, I think we're seeing, you know, some knee jerk reactions and then folks that are. You know, kind of thinking through things, um, and look and maybe a little bit more at the long game.
[00:02:41] So I figured that'd be a good topic to talk through. And, uh, as I see it just kind of breaking it down, general impact that we're seeing and that we're anticipating. And then talking through the budget element, um, as well as targeting creative and media mix.
[00:02:56] Yeah, I mean, just so today's the, wow. Friday [00:03:00] the 13th I know how you feel about this.
[00:03:01] Reid Wicoff: [00:03:01] Very auspicious for this podcast,
[00:03:05] David Staley: [00:03:05] but we sent out, we sent out a newsletter this morning that was talking about just our quick. Like the meeting we had yesterday, just quickly to say, how should we be treating things differently? Um, and we broke down our newsletter by platform. So I don't know if we should necessarily go that much in depth, but we'll just give a few highlights here.
[00:03:22] So we're saying from the paid search perspective, some of the main things you should really care about are changing your, your creative. So maybe remove things about, you know, a schedule tour and instead replace them with things about like virtual tours or call for more information instead of visiting us.
[00:03:38] Um. You should definitely add more negative keywords. And this was a thing from Adam, I thought it was so smart, but I'm thinking about your retargeting campaigns, which often go hand in hand with search, but, um, you want to, you want to make sure your display creative is not showing up next to articles that are talking about covert or the Corona virus or anything that could be done there.
[00:03:58] So you're going to need a pretty [00:04:00] in depth, um, negative keyword list. So you're going to tie to your display campaigns as well as to your paid search campaigns. Um.
[00:04:07] Reid Wicoff: [00:04:07] And I'd just, just adding there that a ton of, of, uh, impressions are served on new sites. They often generate the most traffic. Certainly there's plenty of other, you know, publishers out there, but I think that is why that's such an important step to take.
[00:04:22] Uh, I couldn't ballpark it and I know you couldn't either. We'd have to do an audit to know, like fortunately do 50% of my impressions run on new sites. Um,
[00:04:30] David Staley: [00:04:30] well done. I mean. That's B as far as like regular display, meaning like, sure, there's social impressions, which I consider separate, which isn't going to be the news item, but otherwise, frankly, in most cases, I'm going to say news, right.
[00:04:42] Cause then you'll have like ESPN, right? Or sports sites, which I'm going to say it's new sites. Even if it's a sports site, and it's going to be talking about. You know, the NBA and all of this stuff. So I feel like it use an
[00:04:53] Reid Wicoff: [00:04:53] umbrella term. I just mean like, there's health care sites, like web MD is a new site,
[00:04:58] David Staley: [00:04:58] right?
[00:04:58] So there's like, yet [00:05:00] we talking overwhelming,
[00:05:01] Reid Wicoff: [00:05:01] right? Yeah. That one's probably lighting up right now. Sorry to interrupt. I was just saying that, no, you're right. A significant thing. That's a big tip.
[00:05:10] David Staley: [00:05:10] So let's say that like when I go online and if it's not an industry stuff, um, then I guess it is. It would be news or it could be qualified as news.
[00:05:19] So that immediately may have you or customers wondering about pacing. And so far we, I know, even though folks are seeing a downturn in their lead volume at properties, or at least like onsite traffic, we, so far in their early, early days here, haven't seen pacing be impacted. And I'm curious to see how that goes.
[00:05:38] Um, particularly for. Like search and display. Um, because frankly, like, we all know that nobody has as much of a search budget as they want in this industry. So I could see maybe pacing becoming more of an issue for the ILS is, um, and their search campaigns at the 150 million we talked about versus an, an individual property, if they'd necessarily have pacing concerns.
[00:05:58] Reid Wicoff: [00:05:58] Yeah, it makes sense [00:06:00] in my comment on that, I think yesterday, I'll say it again today is. Uh, the good news, especially I'll say with the psychographic or behavioral targeting, is that, you know, no impression, B S should be served without the proper criteria, meaning that it is being served to somebody that's been reading that type of content, meaning related to multifamily or has been searching or has been.
[00:06:21] Interacting with ads, et cetera. So to David's point, like if the pacing's there, then you shouldn't be worried that, you know, um, a, you're, you're serving too bad people, that the quality is not going to be there. Um. I said, Hey, but that's my only thing there.
[00:06:37] David Staley: [00:06:37] Well, I almost am going to bite on the budget conversation, but I'm going to hold on that for a second and get through at least like what you should do today.
[00:06:45] Reid Wicoff: [00:06:45] so one other thing.
[00:06:46] David Staley: [00:06:46] Yeah.
[00:06:47] Reid Wicoff: [00:06:47] Um, on the, on the, yeah, it just took me like two minute delay, uh, on. On the traffic. What I'll be curious to see, and this is just curiosity at this point, and [00:07:00] you know we're going to be looking at all this, but is the quality leads go up through coronavirus because for those that are still out looking at our apartment, and I don't want to assume the worst, that they're just not, yeah.
[00:07:11] The most intelligent human beings in the planet, are they the ones that are most desperate? Therefore, your close ratio should go up during Corona virus, not down. As far as people walking in the door.
[00:07:22] David Staley: [00:07:22] Well, I, I could definitely see the quality of calls going up that you do have. So I think there, there, you could imagine there'd be less people that are gonna like call you and sort of play hard to get where like, Oh, do you have a one bedroom?
[00:07:35] Oh cool. I, I used to do this like, like not, I didn't want to show you my full interest because I didn't want you to like try sell me. Right. So I would like be like, okay, let me just see you have a one bedroom. Okay. 1100 bucks a month. Okay, cool. Well, you know, whatever, I'll, I'll check you out later. But now I could see like, okay, am I as likely to now say I'll check you out later.
[00:07:54] Meaning I'll just randomly come in or would I instead try to grill you and say like, great, what are moving dates? [00:08:00] Like let's talk about terms. So maybe it'd be much higher quality conversation cause I don't want to. You know, be bumping around town
[00:08:06] Reid Wicoff: [00:08:06] or they're just getting more calls because they're getting less foot traffic and therefore call quality actually goes down.
[00:08:12] So I think it'd be interesting whether it neutralizes itself or if it happens more the way you're describing where it's like, you know, you're going to see call quality, improve, um, because you're going to have less people that are just kicking the tires and wasting the time. But then again. People are going to have a lot of time on their hands.
[00:08:26] David Staley: [00:08:26] You know what you need to specifically for search, sticking on this. Um, I don't know if you remember some of the data we dove into when the, after the Houston hurricane hit, but we saw after that hurricane wiped out a lot of the availability in that market. There were, there was a spike in calls because people were just calling anybody.
[00:08:44] The problem was they weren't great quality. Yeah. So it's like, sure. . Well now, particularly when people are even more sensitive about demographic targeting, right? So most folks, uh, have well as they should, but they did not always [00:09:00] remove demographic targeting from their search campaigns. Like they think about demographic targeting on social, but it is there for search.
[00:09:05] So since you can't target by demographic or sh shouldn't be, then, um, then you need people to prequalify themselves to say like, apartments. At 3000 bucks or whatever it is, and then I would even wonder if you start getting, if for your creative each, you start being even more standoffish or like, like no affordable offered or like, no.
[00:09:31] Um, no short term. Housing available or something like that in there. So it's like, Oh shoot, I shouldn't even call it, cause this isn't a short term available. Right.
[00:09:40] Reid Wicoff: [00:09:40] Yeah. In other words, is now a time to double down on trying to get people to, you know, kind of not self-select, but uh, be more self qualified.
[00:09:48] David Staley: [00:09:48] Totally.
[00:09:49] Reid Wicoff: [00:09:49] I think that's interesting. Um, I'm curious, uh, with the gosh dog it, I think I lost it. It had to do with phone calls. Oh, let's [00:10:00] move on.
[00:10:00] David Staley: [00:10:00] Well, one last thing on the, at least for now on the search creative. Um, we briefly mentioned changing your creative from a schedule a tour. Um, but what I didn't hit was like the virtual tour or the self guided tour.
[00:10:13] So we know that self guided tours are more prominent these days. Um, those may see an uptick cause maybe they would just want it, they still want to go to work, but they want to do it on their own. Uh, but you certainly could start having folks just scheduling, uh, I'll say remote tours, right? Where whether you do FaceTime or like a zoom or whatever, uh, uh, Facebook messenger video, but your leasing teams start to walking people through as a, as a guided tour, but in a remote capacity.
[00:10:41] So perhaps your creative should really focus around that and your scheduling. Link or options should be focused on that and not as if in person. So your creative would definitely say like schedule a remote tour or video tour perhaps, or something like that.
[00:10:56] Reid Wicoff: [00:10:56] Yeah, I think the question is, is how far do you take it?
[00:10:59] You know, and [00:11:00] it goes with questions for us too, as an agency, like, um, when it comes to copy and creative. Oh, certainly being sensitive to the topic of the issue, but you know, will you start seeing in people's ad words, campaigns, things, uh, related to coven, um, and promoting, you know, you mentioned earlier, David, FaceTime or zoom is as opportunities for, uh, at least remote staffs.
[00:11:22] Cause we've heard some of that's happening, at least up in the Northwest, to still stay, you know, be able to communicate and try and sell, you know, um, units. So. I, I'm just, we don't, I don't think we've fully made that determination, but we're, we're, we're leaning. And where I would recommend or expect maybe some other agencies in the industry to lean is, let's not overreact.
[00:11:42] You know, we have to know where and how we would pivot or optimize, but I don't think it's a, and back me up here, but in anyone's best interest to rush out and start changing all their copy to scheduling online tours. Um, you know, as we said. Yeah. You'll see it in the ad [00:12:00] delivery, whether that you know, is really effective or whether that's needed, I should say, not effective, but then you'll see it in the data, whether it's effective or
[00:12:06] David Staley: [00:12:06] not.
[00:12:07] I think it, yeah, it definitely depends on your market, right? So we have some folks in Seattle that are saying their onsite teams don't even want to show up. And so that's a different story. But you obviously . Well, just how big of a problem it would be if you had onsite staff. They refuse to go. Um, so I think it, I, I would say, I guess it depends, um, particularly as this thing evolves in the next, you know, weeks and months.
[00:12:28] Reid Wicoff: [00:12:28] Well, my last question on the call quality or the just call quality on quality is. Is the customer journey going to accelerate or decelerate? And I think most operators, and obviously, you know, if you look at foot traffic, that doesn't have anything to do with the customer journey. That's just strictly like how many people are coming to the door.
[00:12:46] We're seeing less. We're concerned. Maybe we should pull back on budget. What do we do versus, you know, if. Everybody is really as paranoid as I think we all. I mean, clearly we are. Then do I want to see eight [00:13:00] different apartments before I make a choice or do I only want to see a couple? You know, because I don't want to spend a, you know, maybe the ordinary time that I would.
[00:13:09] For that simple fact is I'm trying to limit my interactions, and I might be a little bit hastier through the process than I normally would. I mean, that you'd have to see at a macro level, um, or is it going to be the opposite where people are putting these things off? But the reality is, and on some level, this helps protect the multifamily industry is when Elisa's up Elisa's up.
[00:13:28] So depending on how owners want to handle it, I don't see them offering a ton of exemptions. They're going to want to maintain the rent, the tenants they have. Um, and so I don't. See unless you disagree, like exceptions or it's like, well prolong it a month so you have more time to think about it. They're probably gonna want to capitalize on it and say sorry.
[00:13:45] And so it's going to force the tenant's hand or the resident and that will be kind of two directions they can go with it, which is like, I'm going to just sign for another 12 months cause I'm freaked out by this. Or I actually need to hustle, but I'm going to spend less time doing it, finding my next [00:14:00] place.
[00:14:00] David Staley: [00:14:00] Super interesting. Because back to if you were. Your revenue management, right? So should you be raising rents even more? Right. You know, or, or do you actually think the opposite will happen? Cause certainly as you said, it's people are still going to move. Right? And if, if they do move out, then that means maybe you're offering crazy concessions to get their butts in the door right now.
[00:14:21] So if you try to raise rents to get heat people there, but at the same time you're offering insane concessions to get to replace the people you lost. Yeah. That's really interesting. For revenue management.
[00:14:31] Reid Wicoff: [00:14:31] Yeah. The coven concession. It's not funny. Sorry.
[00:14:36] David Staley: [00:14:36] Um, so the couple of other things, and then we'll, I'll, we'll move on, but I just, as far as what you should do.
[00:14:43] There's definitely a delineation between the types of assets you have, right? So I'll say like if your student housing versus multifamily versus, you know, active adult or senior living, right? So that's where geo-fencing comes in. So what we, what w what we've recommended to our clients for student housing [00:15:00] campaigns is most campuses are closed now, are doing remote sessions.
[00:15:03] So switch from targeting folks that are on campus now to folks that have previously been to campus. And so most platforms when it comes to geo-fencing, have the ability to look. Back 90 days, sometimes a little bit longer, but usually people clear their cookies for the 90 days. So you can look back historically over the last 90 days, who the heck has visited campus?
[00:15:22] And let's hit them with ads if they're still in the area. Um, for our geo-fencing. So that, I think that's, uh, something to do for student. But multifamily, maybe you still focus on your comps and then for senior living or active active adults, I mean, that's, I mean, that's. I guess I'm not sure how, uh, what I would do differently, I guess I'd still probably remain the same and see if my impression delivery was, um, was still holding true.
[00:15:48] Uh. I will say though, we have had clients with, um, that are, that are targeting empty nesters that are already seeing a big decrease in their lead volume because empty [00:16:00] nesters that we're looking to move, or like, you know what? F it, let's put it on hold. Let's ride this thing out. I don't want to move from my palatial estate and then, uh, and then go to a building that has 400 people.
[00:16:12] So it's going to be tough. Tough. Go for them.
[00:16:15] Reid Wicoff: [00:16:15] Yup. I think, uh, on the geo fencing, the, um. Again, it's more about what to do if you're not seeing delivery and you're seeing engagement slip. Um, because you don't want to prematurely change all your, your geo fencing, you know, targeting, just making the assumption that people aren't out there.
[00:16:33] I mean, we heard that internally when we talked to the team and everybody's like, yeah, I mean, there's, there's just not going to be people out walking around anymore. It's like, we're not quite, I think to the Armageddon state, you know, where this is like PSI Phi or Orson Welles, as I was telling . The aliens have landed and you can't find anybody on the street, but we're not trying to understate it.
[00:16:52] I just can't emphasize that enough. Like don't overreact or optimize. That's maybe a good segue, but I don't know if you had more you wanted [00:17:00] to get at before we talk about just, you know, budgeting.
[00:17:02] David Staley: [00:17:02] Yeah. A little. Just to add on the optimizations real quick, so don't forget about your organic social, right?
[00:17:08] You, uh, you typically schedule posts. 30 or 30 days in advance. And so you want to make sure there's nothing insensitive there. And I would err on the side of like pulling down posts and being more dormant as opposed to saying like, let's swap all this out for other stuff. Um, and then the other thing is SEO.
[00:17:26] So most folks probably don't believe that they, I don't think they would naturally believe they should do anything for SEO at the moment. But. I actually think it's a, it's an opportunity to lean in. So we've been talking more recently internally about click through rate on SEO and how a lot of people kind of dismiss title tags and metatags and all that stuff.
[00:17:46] Um, but those are what Google pulls as your headlines in SEO. And so think about, at least for now, updating your title tags and meta tags, even if you can't generate new content to talk about back to the virtual tours or, or [00:18:00] things of that nature that may, um. That may give people the reason to click on your listing versus someone else's listing on Google.
[00:18:08] Um, and then one last thing there. If you had time and the ability to build out additional content, then again, you can lean into it by starting the up. That stuff. So more recently, this is totally separate, but I was. I'm working with someone that had Tesla charging stations and they were able to start ranking super well in a major Metro for Tesla charging stations.
[00:18:27] And that was just by adding it to the website because nobody else talks about Tesla charging stations. Well, a lot of people, when they talk about schedule a tour, if they have virtual tours or remote tours, it's more in, in like, uh, oftentimes it can be an an image and it can just say like. Um, virtual tour, it doesn't have anything beyond that.
[00:18:45] So now is the opportunity for you, whether it's through a pop up that's text and not just image or that's on the homepage that says, Hey, we offer remote tours that are video where we walk you through the apartment as if you were here and show you anything you want, [00:19:00] blah, blah, blah, blah. Something of that nature.
[00:19:01] So just, just some thoughts where SEO may apply that you may not be thinking.
[00:19:06] Reid Wicoff: [00:19:06] Yeah, great call out. Um. And again, how far too, and it's too early, I think to you're, you're talking about leaning in I think a healthy way, but you know, are we going to start seeing, uh, properties, websites with popups that are.
[00:19:23] You know, overtly, I guess hitting the coven or do you just make it more subtle the way you're describing where it's like, let's just make sure it's clear that we offer remote tours so that we can do FaceTime, zoom, things like that, which I think is the right way to start. Um, if it gets extreme enough, maybe some people will consider an even stronger stance where they are.
[00:19:42] Very deliberately, you know, using, uh, the coronavirus in their copy on their website or, or through popups. Um, what I wanted to, uh, God, it wasn't on the SEO, it was on what did you do before the SEO.
[00:19:55] David Staley: [00:19:55] Okay. Exceptional.
[00:19:56] Reid Wicoff: [00:19:56] Organic, social. Thank you. Um, must be the tacos, you know. [00:20:00] Yeah, it's raining tacos. This song just popped into my, my girls listened to every time I make them tacos, they play the most ridiculous song.
[00:20:10] I wish we could do a drop or something, uh, for raining tacos. Um, so yeah, someday. Um, but back to organic social, um, I think this is an interesting opportunity perhaps. And it's not at all about exploiting. It's truly. Yeah. As I know how passionate our marketers are, like our, our clients and the whole industry seems to be about customer experience.
[00:20:31] Like how important is that residence field, you know, engaged and connected within the community, and they hit that all the time with us. It's like, it's not a property manager, it's a community manager. It's community, community, community. Well, if that's the case, then you know. You don't want to go dark on your organic social.
[00:20:50] It's a different challenge for being open an agency that's supporting that because of the scalability or lack thereof, where you would want on your [00:21:00] page, hyper-local, uh, content related to what's going on with the virus. Um, because if I'm a, if I'm a resident, I would almost expect that, where it's like, how is it that we say we're a community and my.
[00:21:13] My property is not even mentioning this. I want some tips. I want to know what's happening with restaurants around me. I want to know what's happening with schools, and they have obviously the same access we all do to all these, you know, huge publishers and sites and they surely have some local news sites that they follow.
[00:21:30] But this is an opportunity to not be a hero per se, but really lean in, as you were saying. And connect with your residents. It just puts a whole other level of, of stress and maybe just unrealistic, um, you know, as far as what we can support as an agency in doing that. So I don't know if you have anything to add that, cause that was definitely a point of discussion yesterday as we were thinking about our own stance and what we can deliver to clients.
[00:21:54] David Staley: [00:21:54] Yeah. I think it's healthy. Like we used to talk about internally when clients. We do do [00:22:00] Twitter posts for, for, for certain clients if they want it. But oftentimes we'll encourage that Twitter becomes like their public messaging or awareness system and less about content for us to, to generate for folks.
[00:22:11] So at this point with how this is taking over, you know, the, uh. The cycle at the moment, I would say that you should treat every one of your channels as if it's your Twitter public announcement, um, side of things. So, um, what I'm saying by that is that would include things like, Oh okay, what are we doing?
[00:22:29] So you probably pushed out emails that are, they're saying, Hey, here's how the building's taking it seriously, your management team. Right. Then I would say even on the social channels like, cause. If I lived in an apartment right now, I wouldn't be using my primary email address. I'd probably use be using a junk man just to be more open.
[00:22:45] I don't want, Oh, that's just how I work. So I'm just saying you should get it out there and every, every facet, like, here's the steps we're taking internally. You know, yada, yada. I would even. Go so far as to say, um, if there are tips that you can give them [00:23:00] as far as like what to do, like when accessing their mailbox or their packages, like things like that.
[00:23:05] And then as you were saying yesterday in our brainstorming meeting, you would want the onsite team to be saying like, Hey, there's nothing available at whatever grocery store, but if you're looking for it, we have a hot tip that's over here.
[00:23:16] Reid Wicoff: [00:23:16] Definitely. I think that this is a. For those that do a blend in.
[00:23:22] Many of our clients, that's the setup they're in right now is a hybrid where they have some properties that are managing the content and others that are with an agency or they actually have both going at the same time where the ad agency is just supplementing the content they put out. But I'm saying this because as we go to market, David, we often.
[00:23:41] We, we always say, Hey, we're an extension of your team. So no better time, in my opinion, for us or anyone else that's trying to support or is involved with the content of a property's website or social channels to, to have an open discussion with them right now about what the, what the position is, where they begin and end, how can we support you?
[00:24:00] [00:24:00] Because if you think about it. No, I mean we haven't talked about it yet, but what, what about the potential backlash? Right. That a lot of properties could face on this whole issue where it's like, cause I've been seeing that all over the news where it's like you didn't protect us well enough. What are you doing to descend?
[00:24:15] You know, there's no disinfectant, whatever, blah, blah, blah. So there's the potential for a lot of criticism and you have to arm your, your teams to be prepared for that. And that's where it could make sense to say, Hey, we need to get on the phone with our agency because a, and it's not about us. I'm just saying.
[00:24:32] Everyone involved needs to think through all the different possibilities and that's what we were just getting started with yesterday. The last note I'll say, or last kind of comment on this is that there is still time, you know, and can't stress that enough. I don't want to sit here and predict like the worst, but nobody's predicting that this is going to stop next week.
[00:24:53] That's what's scaring people. And so take advantage of that. Don't wait another month to have that planning session [00:25:00] and figure out those different tracks because it's most likely that that's exactly what's going to happen. It's going to unfold that way. So take advantage of of it, of the time you have now to to prepare yourself.
[00:25:12] David Staley: [00:25:12] All right. So, um, we move through most of the tips as far as what you should do with your campaigns right now. And we briefly hit on pacing, and that's when I said I'm not going to quite go down the budgeting conversation, but now I think it's a good time to switch to the budgeting conversation. Um, so I know this is where you said you did the most,
[00:25:30] Reid Wicoff: [00:25:30] well, it's not so much prep as it was just, you know, I guess thinking through it.
[00:25:34] In the most realistic way that I could as far as what I'm expecting to happen between operators and marketers. So before I, uh, since even though I'm more prepared, I'm still gonna have some fun with you, I guess, and, and say, talk to me, uh, about your thoughts around budgeting. Um, you know, what, what should you do in this case?
[00:25:55] And, and, and maybe the easiest way to step into this or lead into it is the most basic question. [00:26:00] Do I turn off my marketing? Do I pause my marketing? Do I dial back my marketing? What's your thoughts there?
[00:26:07] David Staley: [00:26:07] Well, at the moment I say no. Um, I think, uh, my reasoning for that is we, if you remove like special events from here, hurricanes or covert or whatever, um, folks get into this situation when they start to get stabilized anyways, right?
[00:26:26] And so let's say you hit 96%, and so they turn off marketing and then all of a sudden, like three months later, they're, they're like. 89% and they're trending worse. And it's like, because they just shut things off and it's so hard to get started back again and regrade regain your ground. So at the moment, I don't believe you should be turning off, uh, turning off anything.
[00:26:45] I think you need to keep, keep yourself out there, but you just need to know it's going to be . It's been 10 years of really good time for apartments right now. Right? And so this is the first little bump in the road for apartments. That's nationwide. It's probably just going to [00:27:00] mean harder to get those leads.
[00:27:01] And, um, I think also, this is a slight aside, I think, um, the more. Uh, humanity. You can show during this process the better. Cause I, I feel many times when we work with clients and we work at their onsite teams and we listen to calls and audit how things have gone, there's not a lot of humanity. It, there's a lot of like order-taking that happens like, no, we don't have a one bedroom available.
[00:27:23] Oh, we do. It's whatever. See you later. There's not like, there's not, there's, they just don't. Yeah. There's just not a lot of effort cause it's just kind of happened for them. So we've had 10 years for that. The fallout of the culture of the onsite teams. So I'm saying humanity. Think about it. Try to instill that with your teams.
[00:27:41] Uh, back to a scaling. I think right now folks should probably keep their budgets about the same because you don't know what's going to happen. So I think back to the 2008. A recession. And when that happened, uh, there's, there's dozens of examples from startups and even large companies. So there were large companies [00:28:00] that pulled back and tried to get defensive.
[00:28:02] And then there were companies that leaned into it, and the ones that leaned into it were the ones that came out on the other side ahead of things. Um, there was a, MailChimp is actually one really good example of that. Their competitors can't campaign monitor and a few others. And what was the, uh. What was the really big constant contact?
[00:28:18] Constant contact had pulled back on a lot of things during 2008. I'm just saying like, Hey, let's, let's weather the storm. And, um, MailChimp's never been one that push a lot of marketing, but they just like continued, continued the fight. Uh, and then they came out on the other side and, uh, they had way more momentum than constant contact, who's now been on their heels for awhile.
[00:28:38] And there's dozens more examples like that where folks lean into it. Um. I mean, you see that during the 2001 bubble with, uh, with companies. So Amazon took out a big chunk of cash right before the crash happened. Crash happens. They did change strategy a little bit, but they really leaned into expanding and covering these other markets.
[00:28:59] And then what do [00:29:00] you know? Amazon gets the momentum that Amazon has and all the other ones flamed out. So it's not a lot of people in the boom times, they, that's when they're aggressive as opposed to when things are on the downside. And. Heck, you've been reading good to great. So I don't know if there's an example in there about, about, uh, this kind of thing, but I wouldn't doubt if there was,
[00:29:19] Reid Wicoff: [00:29:19] I haven't come across that yet.
[00:29:22] Um, it's definitely about though, kind of big macro events, um, and how companies respond to them and, and certainly a difference you just described as far as those that moved to, to grade, uh, during those stretches, those that stay where they're at and those, um, obviously that. End up in a worse position than they were before.
[00:29:39] So I, you somewhat stole some of my thunder, but I expected you to, um, you know, as scratch text far as your position or your thinking about how to handle this right now, I met, uh, and I don't think that this is any kind of radical question, but we did touch on this just briefly before the podcast, but what's your thoughts on increasing your budget?
[00:29:58] And you kind of were, [00:30:00] you know, almost providing a segue into that, but as you say, some actually leaned into it. Um. You know, if, if it was your money right now and you were up in Seattle, since that seems to be the most extreme case, I'm going to try and give you like as real world as possible. You own one of those buildings.
[00:30:18] You're seeing that tours are way down. Lead volume is down. What's your strategy from a budgeting perspective?
[00:30:27] David Staley: [00:30:27] This is gonna be the first commercial break. We take, ah, say, hang on a second. I'm going to pause, but I'm going to remember Seattle. Uh, would I increase budget? And I'm going to cut, we're gonna come right back and hit that.
[00:30:38] So hang on a second. .
[00:30:41] All right, Reed. We're back from our commercial break. I hope we earned tons of money on that, uh, sponsorship. Um, all right, so you were saying Seattle, um, and would I [00:31:00] raise my budget, but what was your Seattle connection to raising budget? Because it's so impacted by the,
[00:31:04] Reid Wicoff: [00:31:04] I just said that's who we've heard.
[00:31:06] Uh, from, as, as most impacted. And so if your tours are down, your lead volumes down, restaurants are closing around you, all the employers are working remotely. Basically, the sky is falling. What's your move from a marketing standpoint? And specifically, what are you doing with your budgets?
[00:31:23] David Staley: [00:31:23] Well, it comes back to NRI, to me and NLI, right.
[00:31:27] So. Uh, how much, what's my opportunity cost? Right? So a lot of folks want to lease apartments somewhere between 200 and $600 for their, their costs to lease it. But during this period of time, if you think that this is going to go on, let's say for 60 days, 90 days, um, what's the opportunity cost of losing a couple grand a month?
[00:31:47] Right? So $6,000. So I believe I would probably, depending on the market I was in, I would probably end up, I would be willing to throw. My CPL KPI's out the door [00:32:00] in my like lease target numbers out the door from a meeting budget, like how much I'm willing to spend. I, we've constantly talked about this, how much should be concessions and how much should be marketing, like how much budget, cause I've always are, and we have often said perhaps there should be less spent on concessions, right?
[00:32:19] If you give two months free for concessions and let's say your rent is 2000 bucks, you just get 4,000 bucks away. Imagine if you took half of that and said and put it in marketing, would you need to give any concession away? So I don't know how much concessions would impact a scenario like this versus marketing.
[00:32:35] But I believe I would feel like, let me not go out the door with concessions right now. I, cause I don't think people in this environment are going to be price sensitive or. I don't think they're going to be looking for the best deal. I think there's going to be other factors that come top of mind for consumers as they're searching.
[00:32:53] So to your point, like there, you may get fewer leads, but the leads you get may be more interested in, um, [00:33:00] so higher quality and thus like why focus on trying to stand out. Again, six people like he used to have to, now you're standing out against two or three. Thus we don't need to throw concessions at it.
[00:33:10] We can just throw a move the concession money into marketing dollars and be willing to spend not $400 for our lease and marketing, but perhaps 800 1200 heck, should you even be willing to spend the full month's rent on marketing per, uh, per, because of that whole 60 day, 90 day or however long this thing is going to last.
[00:33:29] Reid Wicoff: [00:33:29] Yeah. Whoa. What do you think the impact would be for those that take the opposite approach and say, we're going to, we're going to just stop cold. We need to see how things are gonna play out here. There's a lot of panic, you know, clearly. Um, but it seems to me, and we're not naming names, and it's not, it's not just with our clients, but that on the operating side, you know, it's, it's a pretty natural reaction.
[00:33:55] Right. And that's how. These recessions and other financial crisis, [00:34:00] uh, come about is folks with the purse strings say, um, I'm not comfortable
[00:34:07] David Staley: [00:34:07] anymore. Like they want to like almost
[00:34:08] Reid Wicoff: [00:34:08] hunker down. They want to shut it down. Yeah.
[00:34:11] David Staley: [00:34:11] And you want to talk about your hedgehog versus Fox?
[00:34:15] Reid Wicoff: [00:34:15] I could probably a squeeze it, squeeze that in here.
[00:34:18] But, um, I, I just, when you really ask yourself that, because in most cases, isn't marketing less than 1%. You know of, of of the total budget, like when you look at these properties, what they spend and what their opera acts is, it's like less than 1% so you hit it well, like as far as the opportunity costs.
[00:34:38] But am I really coming out on top by saving, let's just use our average budget's like five grand. I'm including everything, ILS, all that stuff. Right? Even for three months, I just save $15,000 I guess. But. What did I compromise? Um, so I, I'd be T I would be inclined, and I don't know that you [00:35:00] were specifically saying this.
[00:35:01] That's why I was curious. Would you be spending more money or would you be spending the same amount of money or would you stop spending money if you're in Seattle right now?
[00:35:10] David Staley: [00:35:10] Yeah. I, this is not in any way, hopefully it folks that listen, like we're not. We're not self-serving. We believe in like what's best.
[00:35:19] I believe that you should spend the same for now and see how it goes. And if you're, to your point earlier on, on pacing, um, don't worry about the pacing. Cause if it's intent based marketing that you're doing. And they're only the qualified people that are, have intent, are going to be spending your budget.
[00:35:35] And so then if your budget is not, if you have too much budget, your vendor's going to roll that over into the next month. You can settle up afterwards. Don't, I wouldn't worry about it. So then, um, as you said, all in marketing budget, well a lot of properties are throwing monthly events and that comes out of the marketing budget to, at this point in time.
[00:35:53] Are you going to have taco Tuesday? I have some finger food slinging around. Probably not. Right. So why don't you just roll your. If [00:36:00] you're going to cut back at all, cut back on the events, great. I saved $1,200 on my event. Otherwise, roll your 1200 bucks into your, into your marketing budget. And that doesn't mean it has to be digital, right?
[00:36:08] You could, you could consider other things. Um, I don't think drive by traffic. I mean, to your point, you're not going to have people that aren't. It's not like the streets are going to be like the walking dead where no one's out. Right? You're, you're so, but you probably aren't going to have as many people just cruising around town, like looking for an apartment, which is going to help with your like A-frame signage or whatever.
[00:36:29] Right. So then you're still doing more awareness or outbound marketing, and that could be flyers. That could be, you know. Well, let's just say a direct mail, something of that nature, which is normally too expensive for someone to work into their budget. So maybe it's an opportunity to test something there if you've wanted to.
[00:36:46] Uh, but the lead time on those as long, right. And now with how things are changing, you can't be as nimble with something like a, like a flyer or a direct mail piece as you can with your digital advertising. Therefore, like let's say you plan the direct mail that go out and then [00:37:00] something happens that would make the seem crazy insensitive, your messaging or whatever.
[00:37:04] Well, now you can't pull back on it. Like that's a problem. So I guess now I'm talking myself into, you're probably going to be more in your digital channels and then your digital channels not going to be ILS, right? Cause you're not nimble there. So you need to focus on the areas where you can like flex up, flex down, change messaging on, on a dime.
[00:37:21] Uh, so I would say at least the same if not possibly increase in all of this. Depends on your rent roll too, right? If you're a rent roll, if you're like, if you were a lease up that, that, uh, basically just got the stabilize and you're not going to really be taking units or like churning units for the next three months, or maybe let's say six months maybe.
[00:37:42] Then like you could pull back on your branding stuff, but leave your leave, leave the intense stuff for any capacity you have. But otherwise, I think you want to. As you were saying, like your 15 grand, like when it comes to one single lease, like you'll lose that like over the year if you were to pause on things.
[00:38:00] [00:38:00] Reid Wicoff: [00:38:00] Well, I think that's some really good advice. Uh, so it sounded like you would land today on keep budgets as they are, but try to move as much as I can to a more versatile mix, um, or platforms. Um, and makes total sense. I would be a little more aggressive. Um, and. And I'm also not saying this self-serving, but I would, I would ratchet up my budgets if I'm in Seattle.
[00:38:23] I'm not saying that I do that across the board, but based on what I heard, I say this, making comparisons and, you know, there's too many to list, but to what we've seen in other big industries, uh, when crisises have happened. So our crises, uh, you think about, you know, the airline industry 10, 15 years ago, um, after nine 11, um.
[00:38:43] They advertise more than they've ever advertised, and it was a matter of survival. They could not just sit idle and, and. And watch it all kind of go up in flames. And some airlines did. Um, you think about other, you know, more, I guess, single one-off catastrophes. But like with ExxonMobil, [00:39:00] Valdez, you know, like the oil spill, they didn't stay quiet for the next three years.
[00:39:04] They put a huge amount of money. In this case, it was more in PR. So I understand that. But then when you see things like with Ford and Toyota, I remember when I was at the statesman and Austin, and, uh, they had all the recalls on the Prius's. That was the most money that, um, and this was even off, I'm probably sharing too much, but, uh, there were for different reasons a Toyota was not wanting to spend with, with the newspaper at that time based on some bad press they had gotten.
[00:39:28] This was predated the recalls when the recalls hit. After a very, um, long break, uh, with the newspaper, they spent more money that year than they had spent in the last five years. And it was in response again to crises. And so, um, you can keep going again, whether it's carnival cruise, you know, with like outbreak of food poisoning, but, um, some of this is more PR granted.
[00:39:52] So, uh, but I think that. It still holds true. You cannot sit idle in these scenarios, especially if you're already seeing [00:40:00] the signals, which Seattle is, is that their tours are down, their leads are down, and panic has started, uh, to set in and then you can start quantifying it the way we just did. It's like, you know, the damage that's being done right now far exceeds $15,000, like for 90 days, and nobody knows.
[00:40:17] That's the other thing, right? What's going to be the timeline, um, before this changes? And so. For that reason. Again, I think that you spend equal, if not more, um, and stay in more of an aggressive stance. The other thing I think you have to, uh, pay attention to very closely that we've already pointed to, but.
[00:40:35] You really should be looking closely and saying, okay, our is our lead quality going up or down, you know, because you may be spending more money, like you said, David, where it's like, well, I'm used to 400 now I'm at 800 now I'm at 1200. But that would be really fascinating. Um, and I don't mean that in some weird OBS, you know, like fun obser observation, uh, observatory, like kind of a comment.
[00:40:57] But whether the people that are [00:41:00] coming in the door are closing, um, and if they're closing more because there's less of 'em out there, then why not put more money into it? Right? I mean, we've talked about this, and I give Melissa Robbins a lot of credit. I'm sitting in a. On a marketing round table here in Denver with her.
[00:41:17] And she was just talking about the future and what her predictions were is that there would be a point where instead of multifamily marketers, you know, let's just say for a 200 unit asset, talking about getting to 300 400 leads a month, that they'd be talking about getting 25 or 30 and. The point was clear.
[00:41:35] She was like, it should get to a point where there is so much self qualifying technology is evolved so much that we would be laughing at ourselves, talking about needing two, three, 400 leads in order to get something leased up. And so I think it's interesting, at least in concept, to think that. The Corona virus could, you know, give some glimpse of that where it, uh, by default, it's like, because of what's happening, you're going to get extremely high [00:42:00] quality.
[00:42:00] I don't know that to be true, but I'm fascinated
[00:42:02] David Staley: [00:42:02] by it. Also, let's go back to a second, like what happened in, in the previous, like recessions and downturns. Like if other, if your competitors are all pulling back, that's usually when you. search forward, right? Because it becomes less competitive. So advertising gets less expensive.
[00:42:16] The question is, will the ILS has maintain their same kind of advertising push, right? Cause if they continue with increasing $100 million in spend, they're already driving up cost per click. We've seen around the nation. And if they continue to do that, when there's, let's say, less appetite for these types of searches and they're going to drive it up even more.
[00:42:33] However, if they start to pull back and all of your competitors start to pull back, that gives you a place. A place to move. Um, like uh, cause the noise has died down for you to Excel. It's interesting cause I had to pull the Amazon numbers and um. This Forbes article said that I was referencing Amazon during the 2001 bubble, but they referenced Amazon during the great recession, so they were saying that sales or whatever, spending in America dropped by 22% during 2008 [00:43:00] but yet Amazon sales grew by 28% in 2009.
[00:43:04] During the same recession category. They give other examples too. Like, um, uh, post, uh, the brand for cereal stopped advertising during the great depression in the 1920s, but then Kellogg doubled its advertising spend, and that's how they took over with rice Krispie treats. And since, uh, snap crackle pop and it talks about another example with automotive.
[00:43:24] So, um, Volkswagen was doing really well in the 70s. Uh, then the recession hit and the energy crisis hit. Uh, Volkswagen remained the same, but Toyota leaned into it and then their Corolla ended up surpassing. Volkswagen is the number one imported car in 1976. So there's plenty of examples here about, uh, about, uh, you being the one to move forward versus the one that that leans back.
[00:43:48] Reid Wicoff: [00:43:48] Yeah, those are terrific. So we also touched on this, but what's your, um, Oh, I don't know if it's assumptions, but. We, we both were [00:44:00] saying people are still going to be buying apartments or renting apartments, I should say. And people of course, back in the 20s, they're going to still eat cereal. So, you know, it wasn't as if, you know, suddenly that that category just evaporates.
[00:44:13] Um, and certainly that's not going to happen here, but what's your sense as far as, um, how much this will affect? Um, yeah, the multifamily industry, I guess in large, but. Do you think that people are going to be, um, less inclined to be renting right now? Do you think they're going to, there's going to be more, there's actually going to be an accelerate.
[00:44:32] Uh, you know, the trends can accelerate. You think it's gonna stay flat and why?
[00:44:39] David Staley: [00:44:39] Our friends at Bigos when I was in Minneapolis this week told me that they listened to the 2020 predictions podcast. I was like, Oh, cool. And they're like, you said, there'd be no major acquisitions this year as like, did I
[00:44:52] Reid Wicoff: [00:44:52] set ourselves up? Yeah, guys, I think I agreed with you too. Yeah. So I said maybe apartment list.
[00:44:58] Uh, I
[00:44:58] David Staley: [00:44:58] don't know. I think he did. I [00:45:00] think he may have been on one of the smaller players. Yeah. I was way wrong. And of course, uh, they told me, they're like, we saw this coming. I was like, what do you mean? They're like the way our reps were acting, whatever, whatever, whatever. I was like, okay, 20, 20. Um, anyways, um.
[00:45:15] Yeah. I don't know. I feel like, um, in, in many cases, I think it will, at least for the time being, people aren't gonna want to make major changes in their lives. I mean, I could certainly see, like if your apartment, like where, where I live in Bailey, right at 9,000 feet with mountain lions. We have like, like an eight Plex there.
[00:45:35] Yeah. If that thing was empty, it is getting leased the hell out. Cause people are gonna want to leave Denver right there. Like if it was anything that like played towards the prepper mentality or something about getting away from major populations, I think you would probably see an uptick. Uh, but as far as like, you know, what most people are dealing with with major urban areas and things, I think.
[00:45:54] You're probably going to see less, less of it. I think what, uh, could end up happening though is like, [00:46:00] student housing could be severely impacted, right? So I wonder if folks are going to play chicken with it where it's like, well, I'm not going to sign for that fall. At least right now. I'm going to wait to see what happens.
[00:46:11] But, um, but then fall, then I wonder what the, what the legality would be in the fall about, um. Not running concessions. Right. Cause a lot of student housing runs concessions now, uh, to, to make sure that they hit their phone numbers. But if you are willing to play chicken with it, meaning the, the ownership group and wait until fall when everyone's like, like, Oh crap, I didn't get a place.
[00:46:34] No. It's like, who needs offer concession? So I almost feel like maybe student housing is one that you could wait on. Uh, but for multifamily, I think, I think at least for the next like 30, 60 days, I definitely think less people are going to want to make major changes unless they're forced out of their apartments.
[00:46:49] So back to the empty nesters. So you need people that are, although, uh, now that we're talking through this, there are people leaving college right now. So if they're exiting college, if they [00:47:00] happen to be getting a job and they're not one of those industries that are impacted, they're going to have to find a place to live.
[00:47:04] So through the summertime, they're going to have to find something. You just wouldn't have those people downgrading from their homes. I don't know. Let's say it cancels itself out.
[00:47:13] Reid Wicoff: [00:47:13] Well, you just, yeah, I, I won't make you, uh, ask me. I'm just going to tell you what I think on this. I do think that on some level it's going to cancel itself out there.
[00:47:23] Certainly. Um, I mean, maybe not perfectly evenly, but where I'm going with this is I see C assets. Potentially having a boom, um, it may be BS. So what I'm expecting is, is that a assets are going to be fighting for their lives because people aren't gonna want to splurge and spend more money to move into a, uh, you know, big time luxury and then the people that are spending money.
[00:47:46] David Staley: [00:47:46] Um, why that part?
[00:47:48] Reid Wicoff: [00:47:48] What do you mean? Why that part?
[00:47:49] David Staley: [00:47:49] Why, why wouldn't someone want spend money on luxury?
[00:47:53] Reid Wicoff: [00:47:53] I'm saying that when you have a financial or economic global crisis, you're going to have less people saying, Hey, let's spend an extra [00:48:00] $2,000 a month.
[00:48:00] David Staley: [00:48:00] Honey are either jobs at risk or something.
[00:48:02] Reid Wicoff: [00:48:02] Right.
[00:48:03] And just seeing what's around them very, this is, to me, this is normal. Anytime. I mean like there is a lot less discretional spending when there's a financial crisis.
[00:48:13] David Staley: [00:48:13] I wonder if though, to make your devil's argument, I do want to hear the rest of it, but with the luxury assets, I wonder if people feel more.
[00:48:21] Secure or safe about it. You know what I mean? Like if I'm going into a place that's brand new, it's not like I have to, like if you were moving into a place and you're like, shoot, this building's been around 25 years. Did they switch out that carpet when the last people left? You know what I mean? And instead, like in the luxury place, it's like I'm the first one live in here.
[00:48:39] Reid Wicoff: [00:48:39] I think they'll put their pocket books first, but you know, there might be a few that, uh, make a decision, um, based on, you know, what they see as the stability of the property or the grade of the property. But I think way more often it's going to be driven by their pocketbooks and they're going to say. I am not about, even though I was yesterday or last month before this thing [00:49:00] just totally took off, I was thinking about going up another 500,000 bucks a month in my rent so I could get that dope place downtown.
[00:49:06] I don't think they're going to be thinking that way over the next few months. And I do think that there's plenty that are stuck in those high rises or luxury apartments that are saying, I cannot keep up with this rent, or I'm afraid to keep up this commitment to this rent. Cause I don't know. My job's at risk.
[00:49:22] I am seeing what's happening around me. I'm panicking. I have got to, I've got to downsize or find a more affordable apartment. Guess what. Then the C and the B assets, like, come on over. Yeah, the water's fine. And then guess who gets the raise rent. Now it's the C and the BS assets that actually haven't replaced their carpet in $25 cause they're like, now you have to like prioritize your pocketbook.
[00:49:45] I'm here waiting for you. So I think that that's a trend that's going to happen. Affordable housing may also pick up. So I see the bottom, you know, tiers really benefiting from a coronavirus and I see the ones up top really suffering,
[00:49:57] David Staley: [00:49:57] you know, super . Interesting about the [00:50:00] picture you painted is I could then imagine.
[00:50:03] Typically properties that are away from the urban center struggle to get leased up cause you have to get people off the beaten path. But what if those folks were the ones to ramp up their advertising and try to, because maybe people don't want to be in as much of the urban center of things and they'd rather be on the garden style outside of town or on the outskirts and they'll take the commute now cause they don't want to be rubbing shoulders with people in the subway.
[00:50:23] Reid Wicoff: [00:50:23] Totally. Totally. Uh. We should, uh, and I don't want to say should have done more homework on this, but you know, it is going to be a very active topic with us, but I am curious to see like 2008 and you could probably search this while I'm talking, David, but how multifamily was impacted because you mentioned, Hey, maybe, you know, things just kind of cancel themselves out.
[00:50:43] Uh. And that's what I'm most curious about is if, let's just say this is correct as far as the forecast or the assumptions is that, you know, those lower tier or grade of assets really, um, see a boom and up top really suffers. [00:51:00] Is it kind of neutral though? Net neutral as far as renters? Don't you think though, when you have a financial crisis that you also have a lot of single family home, uh, homeowners saying.
[00:51:13] We're going to have to, we're going to have to find an apartment. We're going to have to rent. Because you have, as you mentioned, Trump pouring in $7 billion in SBA to try and solve our, you know, help a rescue. Frankly, a bunch of small business owners, those people are homeowners. I'm not saying in totality, but a lot of them are.
[00:51:33] Right? And if we lost our business, I mean, I will speak completely vulnerably here and open, you know, what am I going to do? You know? I, I have to find a solution that offers me some flexibility and can get me through this stage if I can't make my mortgage, you know? And so it seems to me that not only will you see that shift I was talking about from a class standpoint on who wins and who loses, but you will see.
[00:51:58] Multifamily [00:52:00] at large actually have an uptick as a result of a recession because it's harder to hold onto a home, you know, when you don't have money. Then making, uh, making rent on a, you know, one or two bedroom apartment.
[00:52:12] David Staley: [00:52:12] That's interesting. It's a great, um. I guess like data article from CPRE on the subject cause I wasn't, I wasn't sure either.
[00:52:21] And it, and I see what you're saying, meaning like longterm. Um, but what this is saying is that, okay, as far as like the real estate market, multifamily is the most resilient. So after the 2001 recession, multifamily rents declined 6.7% versus out of office declined 17.7%, which by the way, we. Have already signed on a new office and they're slated to move in Tuesday.
[00:52:46] I wish we had this time to negotiate if our rent dropped 17%
[00:52:51] Reid Wicoff: [00:52:51] yeah, no doubt.
[00:52:52] David Staley: [00:52:52] Um, okay. But if you get to the, um, let's go to 2001. So the 2001 receptionist, [00:53:00] this CBR, he says, okay. It went from, um, the end of 2001 to the beginning of 2004 before rent and growth returns to the prior. So it looks like it was like nine.
[00:53:10] Quarters and the 2008 it only lasted for maybe five quarters. So it really started after QI, one of 2009 and then by, Oh, not even five quarters before 2010 it was back up to normal. And then, you know, by 2011 they were on the growth growth side of things. So I don't know how. Okay. Going, this is on rent growth.
[00:53:34] So typically when it looks at rent growth, a lot of the times you're then factoring also for the, for the concessions. So back to it, like in a recession, if you start offering a bunch of concessions that hurts your rent growth, your effect, different growth. So if there, if folks, then we're leaning too much into giving away concessions and they didn't need to, to your point.
[00:53:52] Um, but it doesn't, this doesn't speak specifically to occupancy. So I wonder if the overall properties weren't as impacted. [00:54:00] Uh, because maybe occupancy rates increased even though you were giving up more on, on rent.
[00:54:06] Reid Wicoff: [00:54:06] Yeah. Well, good question. I think the other huge variable here, right, is this is a virus. Um, this isn't, uh, you know, the stock market, although it is crashing.
[00:54:17] Um, the driver behind this is something that is believed to be temporary. Meaning, you know, a lot of folks are speculating, Oh, by the summer, you know, it's going to be better. And you know, we're. It'll all be behind us. And I'm exaggerating the fact, but I just, as you think about the drivers behind economic crisis, that has to be a factor as well for multifamily and all industry.
[00:54:39] But how they react to that, because if it is kind of more of a temporary or short term thing, then that may not be enough to motivate, you know, single family, uh, you know, to make changes for people, you know, that would be holding off on that or luxury like. So this is still playing out, is all I'm saying.
[00:54:56] And I don't think we have a whole lot of examples of this. I mean, so [00:55:00] many people are saying this is, you know, everyone feels weird and nobody knows what to do. Like America just hasn't faced this before. Um, so yeah. Uh. A lot of TBD, I guess.
[00:55:10] David Staley: [00:55:10] Yeah. Um,
[00:55:12] Reid Wicoff: [00:55:12] one of the thing I was going to bring up just as far as reasons not to, you know, I guess collapse or pause, uh, your marketing budgets is also just campaign equity.
[00:55:23] And this is all getting into the opportunity cost that you pointed to. And we're both well aware, but you know, Google. Dictates like your, your position based on relevance. I mean, that's what they keep saying over and over. It's all about relevance. You don't want to compromise your own relevance by saying, I'm going to pause for the next 90 days and give up all the equity that I just built with my search campaign with social.
[00:55:45] So, you know, you're, you're getting engagement metrics, you're getting shares, you're getting comments, you're active, you know, Google saying, Hey, there's a lot of signals over here. This properties, you know, must be relevant. And then boom, you just disappear off of online for 90 days, maybe [00:56:00] longer. I think big mistake.
[00:56:02] I think the consequences of that, um, from a digital marketing specifically, uh, are significant.
[00:56:09] David Staley: [00:56:09] Yeah, well, the Forbes article, uh, that I was reading off the stats from was, um, it was saying that that's what they believe the psychology was of consumers was that if you keep advertising that consumers will believe that your brand is more stable than those brands that just disappear.
[00:56:26] Um, so yeah, I mean, it makes sense, right? We've, we've had, we've all had that impact from one thing or another. It's like, I w I was seeing this every day and now I don't see it anymore. What happened right there. Prom.
[00:56:37] Reid Wicoff: [00:56:37] Totally. You increase trust. It's so true.
[00:56:39] David Staley: [00:56:39] I do think though, back to content changes. One thing, if you think about like, okay, so what are people.
[00:56:48] I feel like we should do a whole nother episode on rep management during this time. But, uh, a lot of people love to read the reviews. I feel I could see how someone would be more intense at reading reviews these days. Uh, particularly when it comes that we, we look [00:57:00] at, um, we use different technology, look at the review sentiment.
[00:57:02] So some of the reviews, sentiment that we track is cleanliness of a building. And I could see how someone, if they saw a reviews talking about how unclean a building was, they're like. Okay. I'm outta here. Versus how clean the building was. So good example here is local to Denver's red peak, red peak. Um, we've talked to multiple renters that are impressed by red beak.
[00:57:21] And specifically, some of the quotes I had was when I moved in, they had a . Two bottles of cleaner on my countertop to say, Hey, use this cleaner when your hand, when you're cleaning your kitchen countertop so that it stays nice and fresh or whatever, and that anytime the cleaner runs out, they provide another set of the cleaner.
[00:57:40] So they cared that much to not just say, go buy your own crap at the store. Use this special stuff. And they made it a part of the thing. So to me, if I'm, if I'm a consumer and I have red peak, I'm thinking. Even more about it now. Like, Oh, great, there it's clean and things are safe. Um, so back to reputation.
[00:57:57] Something to think about. But, uh, the reason I said [00:58:00] that is, cause a lot of times people will see your property and then they'll Google your name to find, to check your reputation. And so your Google reviews are important. So what should you like? Okay, well what if you can't change your Google reviews cause you have a reputation that's not so hot.
[00:58:12] Hey, how about the Google posts? Right. So have a Google post and just every week cause it expires. Why don't you have something there that can speak to that to try to jump in front of, in front of it if you're concerned about your reputation, about how, I dunno. Whatever property ABC, we're now doing a full, like.
[00:58:31] Nightly cleanings ofX , Y, Z or something, but use it almost like a Twitter feed type of thing for your Google post regarding how you're responding to this so that people are, I can get, um, you can jump in front of them reading the reviews about the lack of cleanliness. Also, you may think about adding your own FAQ to your Google my business.
[00:58:47] Oh, I was about
[00:58:48] Reid Wicoff: [00:58:48] to ask
[00:58:48] David Staley: [00:58:48] you about that. Yeah. So what, what would you add? An FAQ and what would it be
[00:58:52] Reid Wicoff: [00:58:52] about? I would, I think maybe some general things around cleanliness. Um, I'm still not there yet as [00:59:00] far as, Hey, let's rush out, um, and do a FAQ just around the Corona virus. But if, if things get worse, I don't, I wouldn't be shy.
[00:59:09] Uh, I think that could be really smart. Just as far as, you know, we talked about being tone deaf yesterday quite a bit, and we certainly don't want to be categorizes that, um, as an agent. See and the way that we're working with our clients are handling it. But I would think that as community managers, the last thing you want is to appear tone deaf.
[00:59:28] And. What I mean by that, if it's not clear already, is that you're just ignoring it or that you're not talking about it. Cause that can come off really poorly where it's like, is anyone here at the fricking property going to acknowledge the fact you know that it is apocalyptic out there? Or if I'm a prospect and I'm searching your property, it's like there's nothing on your site about coronavirus.
[00:59:49] There's nothing about, you're using general term of cleanliness, but. You know, I, I'm looking for that right now. I am in a state of anxiety and panic and you [01:00:00] don't seem to be even aware that that's going on. Not a good look. Cool.
[01:00:05] David Staley: [01:00:05] Well, um, I know we have a, we don't want to take a third commercial or second commercial break cause we have another thing coming up here in a second.
[01:00:12] So what else do you have on your list that you want to get everybody clued into before we head out?
[01:00:17] Reid Wicoff: [01:00:17] No, no, I think, like I said, a lot is unfolding and what you can count on from us and you know, it won't be tomorrow, but we will, uh, I think have kind of called a periodic update updates. It's not that we're trying to be news anchors here or anything like that.
[01:00:30] Um, but there's a lot that is. You know, going, I guess bear itself or play itself out, um, through data. And that's one thing that you and I have already, um, kind of geeked out about. And, and again, not some kind of sick way, but we're just super interested for our clients on what the data is telling us and how, and when, you know, we might need to make some changes.
[01:00:50] So we will definitely bring back, I think some, don't you agree? Some pretty interesting kind of case studies and learnings over the next couple of months.
[01:00:56] David Staley: [01:00:56] Totally. And I think back to your point, like EV, everyone's [01:01:00] been concerned that at some point the market is going to turn for apartments. Um, nobody thought it was gonna happen yet.
[01:01:05] All indications were that it was going to continue. But I think this is a really interesting micro test, um, that we can learn a lot from that we can then share with everybody as far as how to react in situations like this when the market's not. Is bubbly. Right? Um, so that could, that could seed really well for the next two to three years.
[01:01:22] Um, if, if everyone sets the stage right. So make sure that you have your goals set up so that you can start tracking, like look back historically have before versus after, during situation, which can help inform your strategy when the actual, uh, if an actual downturn happens in the next couple of years.
[01:01:38] So back to your point. Yes. We will update in again more just, um, cause a lot of folks tend to look at us for word tracking cause they get blown up by the different ownership groups and they want to have something that sounds like they've, they've been smart. So we'll share our learnings along the
[01:01:52] Reid Wicoff: [01:01:52] way.
[01:01:53] Yup. If it wasn't clear from both David and I do not. And again, not, this isn't on our bath. [01:02:00] Uh, do not kill your budgets. Um, this is all about being smarter from the strategic and how you market through this climate. Um, I think the last thing you want to do is just play chicken with your marketing dollars.
[01:02:11] So that's my, my last note.
[01:02:14] David Staley: [01:02:14] Yeah. All right. C, let's see, a, B, and now C.
[01:02:18] Reid Wicoff: [01:02:18] yeah. Kept up with that, I think. I don't remember what I said for B. yeah. Nobody does.
[01:02:24] David Staley: [01:02:24] Yeah. All right. We're out of here.