Most people enjoy a good cup of coffee in the morning. It is the ultimate “me time” before we start our day. Just about every place of business (non-retail) has coffee and bottled water nearby during business hours. Why? And what does this have to do with multifamily?
Coffee is an amazing business tool. While probably overlooked by Drucker, it really is utilized across the world as a handshake, a welcoming comfort food. It says “stay a while”. Why is that important? Let’s talk groceries.
Retailers and Grocers devote significant people and resources to store layouts. In any grocery store of size there is absolute rhyme to the reasoning as to why milk is in one corner of the store nowhere near the bread, and one hundred yards from the nearest apples.
The objective is to keep the shopper on property and allow them to walk/move past added merchandise. Be assured every major grocer recognizes the correlation between the average number of dollars spent per minute in the store. For every additional minute a shopper spends on property they spend more money. This correlate to potential new tenants in multifamily.
What is the value of your coffee pot?
In multifamily, our “stores” will have a model unit if possible. This is a place for people to roam around, stay on property and get a feel for the place. Not all properties have a model, but we can have coffee. It is a business tool we have at our disposal to give people a reason to stay a while.
Can your coffee pot produce one additional lease each year? If so, how much value is that creating for your multifamily property over five years? Betcha that’s a big number.
What is the value of one additional lease each year?
And, like with the grocery business, the longer they stay the higher the probability they will buy. In this case, they are usually contemplating a potential one year lease. This may be a $7,000 or $27,000 decision.
Give potential tenants cause to stay a while. Make sure the coffee is good. It may gain you one or two additional leases each year. Have fun determining your return on investment on that!
Reprint from MultifamilyInsight.com by John Wilhoit Jr.