Strategic Thinking
A marketing pro leverages the Internet to lower his company’s cost-per-lease.
What can a guy who has marketed hotel rooms, dog food, and underwear know about marketing apartments? Plenty, says Dirk Herrman, chief marketing officer of AvalonBay Communities, who recruited just that guy Kevin Thompson for AvalonBay six years ago.
“His experience from outside this category is critical, and it’s why I hired him,” says Herrman, who had worked with Thompson at Fruit of the Loom. “He knows how to build a brand and integrate it through a company.”
Today, Thompson, 39, is senior director of marketing for the Alexandria, Va.-based apartment REIT. He directs AvalonBay’s day-to-day marketing agenda, including advertising, marketing collateral/signage, Internet, promotions, and public and investor relations.
“Marketing is marketing while the products may be different, many of the methodologies remain the same,” Thompson says. “My first challenge was to understand the multifamily industry and then to apply specific marketing strategies that have proven successful in the past.”
Thompson’s biggest accomplishment has been harnessing the power of the Internet. He started by rebuilding the company’s national Web site to consolidate the Avalon brand across 140 communities. The new approach helped prospective renters find properties and gave current residents an online community resource. It also won an NAHB Pillars of the Industry “best Web site” award in 2003.
After the Web site redesign, Thompson concentrated on lowering AvalonBay’s cost-per-lease and strengthening resident communities all while reducing company’s marketing and advertising expenses by more than 10 percent for three years running.
To drive more traffic to the redesigned site, he oversaw a search engine optimization project that generated a 400 percent increase in unique visitors (nearly 100,000 per month). Those leads cost the company nothing after the upfront cost of developing and delivering the campaign.
Then Thompson really shook things up by moving away from print guides, focusing instead on online sources, which are less costly and increasingly effective. By listing properties in online guides, placing banner ads on Web sites, and selectively pulling out of print guides, the company has significantly reduced its cost-per-lease for the last three years running. Today only about 6.4 percent of AvalonBay’s leases are generated by print guides (down from 18.4 percent in 2002) versus 37.4 percent from the Internet (up from 19.8 percent in 2002). The cost-per-lease for Internet sources? Just $175, hundreds of dollars less than a print ad.
For instance, a placement on Rent.com in June 2005 would have been seen by 3.1 million visitors to that site, according to comScore Media Metrix. The leading apartment guides and locator services averaged about 2.5 million visitors overall.
“We were right at the beginning of cybermarketing when we hired Kevin,” Herrman says. “He brought an ability to interpret and guide our work. Now we’re at the forefront of the multifamily business with regards to Internet marketing.”