BiggerPockets

Hygiene Theory Guide To Resident Retention At Your Apartment Communities

One of the constant confusions our industry faces relates to the concept of resident retention. Without forming any type of realistic plan, the general procedure for handling resident retention is finding some "cute" activities to do a couple of times a year. And what role does maintenance and customer service have in resident retention? If you can more clearly identify what comprises resident retention, you will have an advantage in creating an effective resident retention plan to reduce turnover, improve profitability, and effectively market your property.

In order to understand what comprises a quality resident retention program, we can look at the lessons learned in a related field, that of job satisfaction. As you will soon see, theories on job satisfaction have extremely strong parallels with our own challenges with resident satisfaction. Frederick Herzberg found that certain factors at work help avoid dissatisfaction while other factors provided satisfaction. At first glance, those two seem to be the same thing, right? In reality, they are quite different and can have a very large impact on how you market your property and amenities.

Hygiene Factors & Motivation Factors
The most dramatic conclusion of Herzberg's theory showed that factors that cause satisfaction and those that reduce dissatisfaction are two completely separate ideas. Those factors that are necessary to prevent dissatisfaction, either in a workplace or apartment community, are called, "Hygiene Factors." For instance, imagine dining at a restaurant and your food comes out cold, which would obviously cause dissatisfaction with your dining experience. However, what if your food had been served warm? It is likely that you would have never noticed, instead focusing on other aspects of your meal, such as taste, texture, and ambiance. So in this example, you have a factor that results in dissatisfaction if not done properly but does not provide any positive satisfaction if it is done properly.

In general, hygiene factors are your residents "basic expectations" with the community. For example, they expect a roof over their head, running water, and other basic necessities. The nicer the community, the more residents expect. At a luxury community, residents might expect a reserved covered parking spot and a concierge whereas a resident at a Class C property would not have those expectations. In that way, hygiene factors are specific to the clientele of your property.

So if you have covered your residents' basic expectations, or hygiene factors, they should be satisfied, right? Wrong! Fulfilling your residents' basic expectations brings you to a level playing field with your competition, but does not exceed it. Providing these expectations stops you from inadvertently pushing your residents out the door, but it does not provide your residents reasons to stay! In order to achieve satisfaction from your residents, you must meet both their basic expectations as well as provide "Motivation Factors," which are essentially your competitive advantage relative to your peers and reasons for your residents to continue living at your community. See the illustration below:

Illustration 1

In this illustration, successfully providing hygiene factors allows you to reach the midpoint, where your residents are neither satisfied nor dissatisfied. They are much like a leaf on the wind, going where the breeze blows them, or in our industry, going where the latest concession is! Providing both of these sets of factors can help stop the "concession cycle" and close the infamous back door.

In my next article, I'll explain how to classify your assets and amenities into Hygiene Factors and motivational factors, as well as how to actually use this information!

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