Six Centralization Frequently Asked Questions
Answers to the multifamily centralization questions you really need to know.
If you’ve been hearing about “centralization this” or “centralization that” and want your questions answered, then you’ve come to the right place. We’ll cover many of the most common questions we hear about centralization to cut through some of the noise. (We’ll include a few short videos on the topic, too).
#1. What is the point of centralization?
Before we go any further, let’s answer this one. In one word: productivity.
In many words: centralization gives property management companies the flexibility they want to operate their business how it makes best sense for their portfolio, for their teams, and for their needs. Greater efficiencies, reduced costs and a better experience for renters and leasing teams. A centralized model isn’t one-size-fits-all, it’s truly tailored to the underlying goals and objectives of the property management company. Generally speaking, centralization allows operators to insulate their business from tumultuous external forces (erratic labor markets, customer behavior and preferences, etc) by increasing the flexibility of the business model. It also gives stretched-thin teams a hand by leveraging AI and automation, creates a thoughtfully crafted renter experience, and increases revenue.
Watch our Tyler Christiansen’s take below, and keep reading for more multifamily centralization information.
#2. Is centralization only for large property management companies?
Not a chance. Centralization increases productivity, and allows operators to do more with less. These aren’t pain points that are exclusive to only large property management companies, in fact, many of these pain points are heightened for smaller operators with fewer resources.
For small to mid-sized operators, centralization allows them to punch above their weight. Don’t take our word for it, we asked an expert, Cris (Sullivan) Wheeler, multifamily veteran, Funnel board member, and former COO of Gables Residential:
“Centralization is revolutionizing multifamily in many ways. It levels the playing field for smaller to mid-sized companies operating with fewer resources, and back-of-house capabilities by creating efficiencies,” said Wheeler. “A centralized model powered by the right technology leverages resources and maximizes marketing spend; resulting in cost savings for the owner, less work for the team, and better experience for the customer.”
“Centralization is revolutionizing multifamily in many ways. It levels the playing field for smaller to mid-sized companies operating with fewer resources, and back-of-house capabilities by creating efficiencies. A centralized model powered by the right technology leverages resources and maximizes marketing spend; resulting in cost savings for the owner, less work for the team, and better experience for the customer.”
— Cris (Sullivan) Wheeler, multifamily veteran, Funnel board member, and former COO of Gables Residential.
#3. How does centralization impact teams?
The 1:100 multifamily staffing model was established decades ago and in many cases hasn’t adapted with the times. Things have changed since then. Renter expectations, tech capabilities, and tech adoption all increased.
A few things to keep in mind about the “old way” of leasing, what brought us to this point, and the tipping point we’re in right now.
- First, COVID increased the amount of time that renters spend at their homes, with an increase in remote-friendly and hybrid roles, this isn’t going away. It also increased the demand for real-time purchases and a streamlined and personalized digital experience.
- Second, multifamily doesn’t operate in a vacuum. Consumers are able to order a new car in four clicks, anything online in one, reserve a table at their favorite restaurant from an app, and order all their groceries online. They expect a modern, “ecommerce” apartment shopping experience that aligns with their buying patterns in every other area of their life. They demand flawless customer service from every interaction. Now that they have effortless experiences from other key companies in their lives, they demand it for their most important financial decision: where they call home.
- Third, on the operator side of things, leasing teams are overwhelmed with the amount of communication and follow-up demanded of them on a daily basis. They need a hand taking care of these important, but repetitive administrative tasks, so that they can focus fully on the most important thing: renters.
- Fourth, labor markets have been tumultuous over the past few years, increasing turnover, making hiring more difficult, and MUCH more competitive. Through lockdowns many traditionally “in-office” roles proved that they could work from home, or at least have a more adaptable and less rigid approach than they did before. This demand for increased flexibility from teams is here to stay. A flexible approach to staffing is ALSO good for companies, insulating them from tumultuous labor markets, and keeping their teams happier in their roles.
What does all of this mean for teams and centralization? “Centralization is enabling the transformation of the outdated staffing model. Administrative functions such as processing lease paperwork and applications can be more efficiently handled by teams dedicated to those functions, allowing the sales team to focus on leasing and customer service,” said Wheeler. “Creating a model that aligns roles with strengths, results in better associate satisfaction and a career path that rewards team members for what they do best. Everyone is competing for the best and the brightest, companies that centralize will be better positioned to attract top talent.”
Centralization is enabling the transformation of the outdated staffing model. Administrative functions such as processing lease paperwork and applications can be more efficiently handled by teams dedicated to those functions, allowing the sales team to focus on leasing and customer service. Creating a model that aligns roles with strengths, results in better associate satisfaction and a career path that rewards team members for what they do best.”
— Cris (Sullivan) Wheeler, multifamily veteran, Funnel board member, and former COO of Gables Residential.
#4. Why do we need centralization, when we already have automation?
Let’s set the record straight, while automation is intertwined into any centralization plan, they’re not the same thing. Yes, of course, they both create efficiencies.
AI and automation are great at taking route, administrative tasks off of onsite teams. It excels at things like fast follow-up, and speedy responses. However it’s not perfect at complex questions, and at a core level, it’s not the same as restructuring your business at the intersection of people, processes, and technology. With automation, the 1:100 staffing ratio doesn’t change. With centralization, it absolutely will become more efficient.
AI is a vital component of a tech stack, but it’s not the same as centralization. So yes, to leverage the operating model of the future, you need both. To have a better version of the “old way” to lease, you could just stick with cobbling together a few AI solutions, but it won’t set up you up for success.
#5. Does centralization apply to third-party managers?
Louder for the ones in the back? YESSSSSS it does apply. YES centralization DOES make sense for third-party managers.
Watch our CEO Tyler’s Take on this below, and keep reading to learn more.
We keep coming back to this, but it’s essential to understand. So excuse us for climbing on our soapbox. Centralization is more than lead sharing or cross-selling. Centralization IS full business transformation. Centralized teams, no matter if you’re third party managed or owner operator managed, can work across the portfolio to take care of vital, administrative tasks like leasing, renewals and follow up. A centralized multi-property sales team can work across the portfolio, to give tours, and close with renters. Both teams create a better experience for the renter, increasing the propensity to higher lifetime customer value and loyalty.
Plus, as Tyler noted in the video above, within the hospitality industry, lead sharing across owner groups is a common practice within loyalty programs. Renter loyalty programs, much like hospitality’s Mariott-Bonvoy with inter-ownership group lead sharing agreements, are waiting for third-party managers to lead the charge. Multifamily is at a tipping point, centralization is the model of the future. Thinking “centralization doesn’t apply to me” is the fastest one-way ticket to getting left behind.
#6. Is centralization worth it?
Absolutely. Attracting and retaining talent is increasingly difficult for property management companies. Centralization not only allows them to run more efficiently and increase the productivity of their teams. It also allows them to create clearer career pathing for team members. Happier teams, more business efficiency, a better experience for renters. Win-win-win.
Want specifics? As the only platform to have empowered proven centralization models for the largest and leading PMCs, we have them.
- Our client, Camden Property Trust was able to give their leasing teams Sundays off, for the first time in company history, without a performance drop after centralizing and adding AI and automation. They also projected $4-5 million in savings on a full-year basis.
- Essex was able to increase their unit-to-agent ratio, without a performance drop, through centralization because they’re arming their team with the tools and the organizational structure to do more, with less.
Want more success stories? Read this blog to learn how the transformative Funnel Platform is changing REIT bottom lines.
Don’t go it alone or run your company on an old tired playbook
We get it, centralization is complex. Change is difficult. Centralization is a business change that’s worth it, and Funnel can help.
Funnel developed proven centralization strategies by working alongside the leading and largest property management companies to develop and tailor our tech and professional services for the multifamily industry. We are taking what we learned, and applying it to your portfolio. We call it Centralization as a ServiceSM (CaaSSM). Funnel’s CaaS is the ultimate lever to accelerate centralization. CaaSSM is a customizable program uniquely crafted for your portfolio, technology stack, and business initiatives.
We’ll work with you to challenge the status quo. Our partnership will be grounded in transparent communication, respectfully challenging ideas, and urgency around solving problems. We build trusted, consultative, partnerships with multifamily visionaries, like you, as they burn their old property management software-reliant playbooks and craft flexible, renter-centric, portfolio-tailored, operating models that give teams of all sizes a way to win.