“Despite the economic downturn, our third-party management and construction business lines have experienced strong growth,” said Tom Bozzuto, CEO and co-founder of the 21-year-old, Greenbelt, Md.-based The Bozzuto Group, when Jamie Gorski, who has more than 25 years of multifamily marketing experience, joined the privately-held real estate services organization last April as senior VP of corporate marketing.
“For that reason, we want to make sure we’re marketing our company and our services as effectively as possible,” he said in the announcement that also included the promotion to VP of property marketing of Bozzuto’s own Israel Carunungan, who previously served as director of property marketing. “These long-term investments in our company and in our brand will help ensure we remain competitive and strong,” said Bozzuto, who is looking forward to a spectacular apartment market as the echo boomers graduate over the next four years.
Likewise, Michaels Organization announced the appointment of Laura Zaner to the newly-created position of VP of corporate communications and marketing in March because the 36-year-old company also is anticipating strong future growth. In Michaels’ case much of that growth will come from soldiers, as the government-subsidized housing specialist continues to add military housing to its portfolio.
A story to tell
“For almost four decades now, Michaels has quietly become one of the largest and most innovative real estate organizations in the country,” said John O’Donnell, COO and executive VP of the Michaels Organization, which currently has agreements — three with the U.S.
Army and two with the Air Force — to build new or perform housing makeovers on thousands of units of military housing the company will manage for the next 50 years. “As our portfolio of services continues to expand, this is a good time to start telling our story, which is a story of financial strength, housing expertise and a deep commitment to our residents, our employees, our investment partners and the communities where we build and manage multifamily housing,” he said.
That story was one of the main attractions for Zaner, who has known Michaels Development Company President Bob Greer for years, through his involvement with the National Association of Home Builders (NAHB), where Zaner served as VP for NAHB Multifamily for the nine years prior to joining the company Michael Levitt founded in 1973 that today owns and/or manages around 40,000 units in 26 states from coast to coast and on St. Croix in the Virgin Islands.
“People have heard of Michaels Development and our sister company, Interstate Realty Management (IRM), and know them as leaders in their own right,” the new marketing VP said. “But, what they might not know is that these companies are part of a larger organization that can take a development project from creation to completion and then manage that asset for long-term success.”
The power of the whole
A big part of Zaner’s strategy will be leveraging the power of the entire organization for the benefit of each individual company. “We have a VP of marketing, Charlie Ramos, who has handled the marketing strategy for IRM for more than 20 years,” said Zaner. “And, with an average occupancy rate above 95 percent across our portfolio of 250 properties, Charlie has led us to great success with his apartment marketing efforts. My job is to develop ways to incorporate all of the successes of our individual companies into a national brand, because the whole is even greater than the sum of its parts,” she said in mid- May.
Gorski, who filled the position vacated by Bozzuto’s previous VP of corporate marketing, also plans to focus first on beefing up The Bozzuto Group’s corporate image. Even though the company’s services practically sell themselves, mostly growing by word-of-mouth and recommendations from happy customers, Gorski believes more can be done to elevate the brand to match the company’s stature in the industry.
“So for me, that is a main focus,” she said in late April, towards the end of her second week with Bozzuto.
“The other is to develop marketing strategies that maximize effectiveness, efficiencies and disseminate the best practices and standards throughout the organization,” said Gorski, who left a job as senior VP of marketing and chief marketing officer for KETTLER, a 32- year-old land developer, builder and manager of planned communities, condominiums, commercial buildings and apartments in the Metro Washington, D.C. area, to work for Bozzuto, which has developed, acquired and built more than 31,000 homes and apartments in the Northeast and Mid-Atlantic, with a major focus on the D.C. to Baltimore corridor, since its founding in 1988.
Branding diversification
Zaner’s new job at Michaels Organization, which is made up of seven affiliated companies that range from property management to development and development financing, more than half of which do not yet bear the Michaels name, will be to implement a strategy for branding the company from a corporate perspective, capitalizing on the firm’s national strength and local expertise in all aspects of housing, she said.
She also plans to revamp the company’s Web site and is finding a goldmine of company memorabilia in the Levitt family archives that reveal Michaels’ rich history and will further enhance the company’s updated online presence.
Bozzuto’s six companies that build for-sale homes, buy apartment communities and land and develop, build and manage apartments, ranging from affordable to luxury, for the company’s own account and third- party clients, already share the parent company’s moniker. And Gorski is enjoying the challenge of working her marketing magic across all of those divisions.
Slice, don’t slash
Both Zaner and Gorski believe that this current recessionary environment is fertile territory for a nimble company and that marketing is even more important during today’s economic slippage.
“We really have to invest in our brand and enhance that value. In order to do that, you have to be very careful and selective, nimble and innovative,” said Gorski, who thinks that the companies that are slashing marketing across the board today are behaving unwisely.
“That’s just the opposite of what you should be doing. You have to go at it with a scalpel, not a cleaver, and fine-tune it, asking yourself what is really working and adjusting your strategies and tactics to match your customers’ concerns,” she said.
“Marketing needs to be thought of as company muscle, not fat that needs to be trimmed when times are tough. If you can invest in marketing now, when many of the others in the industry are pulling back, you’ll have much more of a competitive edge when the market does recover,” Zaner agreed.
Customer focus
Gorski points to the Hyundai Assurance Program as an excellent example of considering customer concerns when creating a marketing strategy.
The car company promised its customers that they wouldn’t have to worry about losing their cars if they lost their jobs.
“They said, ‘We’ll pay for the car payments,’ and they were the only one in the car industry that showed any growth. That was adjusting to customers’ concerns and we need to do the same,” she said, adding that increasing emphasis on marketing doesn’t mean spending more money and The Bozzuto Group is being careful and strategic in adjusting to its consumers’ needs.
“It is different than in the past, when conditions were stronger. You have to be even more innovative, careful and strategic. You have to be even better and I like that,” said Gorski, who has seen marketing from both public and private points of view. She worked for a while for real estate veteran Draper and Kramer in the mid-90s, in between stints with Charles E. Smith, first in the early ’90s, when the Chicago high-rise developer became a REIT, and later, when the company was purchased by Archstone and the names merged to create Archstone- Smith, but, by the time that REIT was swallowed up by Tishman Speyer and Lehman Brothers in 2007, she was with KETTLER, where she worked for five years prior to joining Bozzuto.
Bozzuto, be nimble
“On the public side, there’s a different system. I think it’s much more automated. There are more reports. On the private side, it’s much more nimble,” said Gorski, whose boss has experienced the public side as a board member for a bank and says that experience has reinforced his desire to stay private.
Private companies unburdened by the rigid requirements for bureaucratic approval by boards of directors and shareholders and lawyers are better able to flourish during a down time because of the velocity with which they can refocus on growth opportunities, said Gorski, who graduated from college in the early 1980s with a bachelor of science degree in mathematics.
Has that degree been of use to her in the marketing business?
“Absolutely,” she insists. “People always ask me that and I say, ‘I use it every day. It’s a way of thinking,'” said Gorski. “There’s nothing wrong with being innovative, but you have to be strategic with that innovation.”
Focus on the Internet
Bozzuto’s new marketing SVP expects the company will devote 60 percent of its corporate marketing dollars to Internet advertising activity, 33 percent to promotion of brand partnerships, print advertising and consulting and seven percent to generation of press releases, award submissions and event participation this year.
Although Zaner currently is in the process of developing her corporate marketing budget, she is reserving at least 20 percent to print sources — mostly industry publications — as a way to introduce the Michaels Organization’s new brand to potential partners and investors.
The new focus on the corporate brand will allow for efficiencies that will reduce costs across the board, while at the same time allowing for increased opportunities.
“When you have seven companies able to cross-sell one another, you increase your potential customer base exponentially,” Zaner said. She expects that the majority of the remaining marketing dollars will be devoted to the Internet and e-communications. “The Internet is often the first place people go when they want to find information about an organization or the products that organization provides, so it is absolutely essential to allocate significant resources to that area,” she said.
Working under the same premise, the recently promoted Carunungan is putting the company’s money where his mouse is, focusing heavily on Internet social networking channels, in the company-to-consumer side of the marketing.
After analyzing the company’s best-performing ad sources, Bozzuto Management, which custom-builds its media schedules by property, created an overlying strategy for 2009 that relies heavily on Internet advertising, allocating 70 percent to that effort. The rest of the marketing dollars are going to outdoor signage, relevant apartment guide advertising in select markets, and onsite outreach efforts like co-promotions with local retailers and participation in community events, budgeting about 10 percent of the apartment marketing funds to each of those efforts. Clearly, the focus will be online efforts to attract new residents, with social networking a major initiative.
Join the crowd
“Very early on, Bozzuto recognized the power of social media and began engaging consumers in the new platform. We view it as a powerful communications tool for building online communities and for establishing a dialogue with our existing residents,” said Carunungan, who joined the company in 2006 and has been instrumental in transitioning Bozzuto’s property marketing strategy to a primarily online-driven approach.
“A large segment of Bozzuto’s consumer base spends a significant amount of time online, so we are aggressively using social networking channels to expand our marketing efforts outside of traditional Internet listing services,” he said, listing the nine social media efforts Bozzuto has implemented.
“We have customized our marketing strategy around the fact that 70 percent of our prospects come to us through various Internet sources,” he said. Bozzuto makes use of individual property Web sites, the company’s site, search engines like Google and MSN pay-per-click, craigslist.com and other free listings, along with the many Internet listing services (ILS) ranging from old-timers like rent.com to the newer iterations of the ILS concept like Apartment Marketer. That brainchild of two former Google employees taps into the concept of long-tail marketing, Carunungan said.
“The idea is that if you have a ‘classified-type’ listing that is being posted in 100+ niche sites, the amount of leads you get will be more than one posting in a major ILS. Because this long-tail concept is being applied to the apartment industry for the first time, it’s in the early stages of lead generation, but we wanted to be in on the ground floor with them,” he said.
The pricing model is pay-per-lead, so participation is not cost- prohibitive and Bozzuto currently has several test properties with Apartment Marketer, which already counts among its customers such multifamily industry luminaries as Archstone, AvalonBay, Greystar and Water-ton Residential.
Carunungan and his team also are testing more than 10 properties with RentWiki, a new ILS that has a social networking component that allows people to post comments and feedback on neighborhoods. “For example, if someone is interested in finding out about the nightlife in Fells Point or the restaurants in Penn Quarter, while looking for apartments, you can do that in RentWiki,” Carunungan explained.
From tag to Twitter
The majority of the properties Bozzuto manages have their own Facebook business pages, where property managers post open-houses, property news, leasing specials and relevant Bozzuto Management news. And all of the company’s properties’ pictures are posted in Flickr, tagging the albums with keywords like “apartments,” and “rentals” and with geographic locations, further enhancing their searchability. Flickr’s biggest benefit is its search engine optimization, which helps Bozzuto’s organic search results, as do YouTube and other video sites, he said.
Craigslist is a proven lead and lease source for Bozzuto Management, which also has several properties listed on Yelp, a combination of craigslist.com and ApartmentRatings.com, where people, Carunungan believes, are generally more credible than at the latter site, probably because Yelp offers user reviews of numerous other products in more than a dozen other categories from cars to food. LinkedIn is a sort of business crowd Facebook, “but we figure they need apartments, too, right?” he quipped.
And Twitter is used mostly as a communication tool with residents, as opposed to prospects, said Carunungan, who believes there can be no better ambassadors for their communities than the residents. “We know that, because of their positive experiences in Bozzuto-managed communities, our residents are our evangelists and their first- experience, word-of-mouth postings have more impact and credibility than traditional advertising.”
