How can you measure the success of tenant referral programs?

1 Referral rate

The referral rate is the percentage of your current tenants who refer someone to your property. It indicates how satisfied your tenants are with your services and how willing they are to spread the word about your property. To calculate the referral rate, divide the number of referrals you receive by the number of tenants you have in a given period. For example, if you have 100 tenants and you receive 20 referrals in a month, your referral rate is 20%. A high referral rate means that your tenants are happy and loyal, and that your referral program is effective and attractive.

2 Conversion rate

The conversion rate is the percentage of referrals who sign a lease with you. It indicates how qualified your referrals are and how well you handle them. To calculate the conversion rate, divide the number of leases you sign from referrals by the number of referrals you receive in a given period. For example, if you receive 20 referrals and sign 10 leases from them in a month, your conversion rate is 50%. A high conversion rate means that your referrals are interested and motivated, and that you have a smooth and efficient leasing process.

3 Retention rate

The retention rate is the percentage of referrals who renew their lease with you. It indicates how satisfied your referrals are with your property and how loyal they are to you. To calculate the retention rate, divide the number of referrals who renew their lease by the number of referrals who signed a lease in a given period. For example, if you signed 10 leases from referrals and 8 of them renewed their lease in a year, your retention rate is 80%. A high retention rate means that your referrals are happy and engaged, and that you provide excellent customer service and maintenance.

4 Return on investment

The return on investment (ROI) is the ratio of the profit you make from referrals to the cost of running your referral program. It indicates how profitable your referral program is and how well you manage your expenses. To calculate the ROI, subtract the cost of your referral program from the revenue you generate from referrals, and then divide the result by the cost of your referral program. For example, if you spend $1,000 on your referral program and earn $10,000 from referrals in a year, your ROI is 900%. A high ROI means that your referral program is a smart and effective marketing strategy that pays off.

5 How to improve your referral program

Now that you know how to measure the success of tenant referral programs, you may be wondering how to improve your referral program and increase your performance. To help you, here are some tips: Offer incentives that appeal to your tenants and referrals, such as cash, gift cards, discounts, or free services. Communicate your referral program clearly and frequently using different channels like email, text, social media, flyers, or newsletters. Make it easy for tenants to refer someone by providing them with referral cards, links, codes, or forms to share. Follow up with referrals promptly and professionally and keep tenants updated on their status. Show appreciation and recognition to referring tenants by sending them a thank you note, a testimonial request, or a feedback survey. Track and analyze your referral program data and adjust accordingly to optimize results. Tenant referral programs can grow your rental business and build a loyal community. By measuring the success of these programs using four metrics, you can evaluate performance and identify areas of improvement. We hope this article has given you useful insights and tips on how to measure and improve your referral program. If you have any questions or comments, feel free to share them with us.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?