Multi Housing News July 2012 : Page 22
property management Shopping for Revenues E-commerce is becoming the new ‘go to’ ancillary income opportunity By Keat Foong, Executive Editor T he “Big Three” of ancillary income are often said to be submetering, telecom-munications and laundry. However, pro-viders are emerging in the marketplace to devise a variety of other types of services that can provide apartment companies with side income while also enhancing their custom-ers’ experience of living in the community. One of the creative options that has emerged in recent years takes advantage of loyalty and rewards programs the apartment company may already have in place or may want to implement. Under Resident Gifts LLC’s pro-gram, apartment companies can incentivize their residents to perform desired activities— without having to give free rent—and obtain ancillary income that will lower the cost of that incentives program. ResidentGifts provides an automated and integrated platform that allows the resident— or apartment company employee—to win points that can be redeemed for goods and services at national and local brands. For ex-ample, a certain number of points accumu-lated by the resident will convert to a certain dollar amount, say $10, which can be used to purchase goods and services with name brand companies listed on the website. Activities that can be incentivized under this program include lease signing, resident refer-rals, lease renewals, paying rent on time, and even participation in social media, surveys and community events, notes Gerry Wiat-rowski, co-founder and chief marketing offi cer of ResidentGifts. For employees, the rewards program can be tied to meeting budget, leas-ing or customer satisfaction goals, signing up residents for renters insurance and winning employee of the month awards. ResidentGifts’ rewards program is “bud-get neutral” for the apartment owner, says Wiatrowski. “There is no incremental spend. Property owners do not have to fi nd additional budget to cover [the incentives program]. It is whatever they spend today.” Currently, about 18 national merchants are participating in the ResidentGifts incentives program. These include PotteryBarn, Marriott, can be added. ResidentGifts buys the inven-tory in bulk from the merchants at a discount of fi ve to 70 percent, says Wiatrowski. The company splits those discounts 50-50 with the property owner, such that $10 in redeemable value, for example, may cost the owner only $8. The resident or employee “obtains dollar-for-dollar value or more, but the gift card al-ways costs the owner less than face value,” explains Wiatrowski. Additionally, property owners will receive revenues from unused gift cards. Statistically, a certain percentage of gift ❝ Apartment companies participating in the rewards program can expect a minimum return of 10 to 15 percent on their existing incentives budget. ❞ Sports Authority, Bath and Body Works, Lands End, Overstock.com, 1-800 Flowers, Cabela’s, Omaha Steaks, Fandango and K-Mart. There are guidelines ResidentGifts follows in selecting the participating merchants. The suppliers offer goods and services that are particularly suited to the apartment renter; a range of products and services are offered; and retailers are included in the line up, for shopping convenience. Owners and managers can also arrange to have their products and services, such as carpet shampooing, accent wall painting or clubhouse rentals, listed on the ResidentGifts website, and local merchants cards are not activated by their holders. This is termed “breakage” in the premium and incen-tives business. ResidentGifts will also split 50-50 with the owner the value from any unused cards, says Wiatrowski. Currently, ResidentGifts has a goal of signing up more than 100,000 to 200,000 apartment units by the end of the year, says Wiatrowski. Ultimately, apartment companies participating in a rewards program with ResidentGifts can expect to obtain a minimum return of 10 to 15 percent on their existing incentives budget, he says. Returns can be signifi cant depending on the size of the company’s incentives budget. 22 July 2012 | Multi-Housing News
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