How Apartment Companies Make Buying Decisions

Panelists at the National Apartment Association 2013 Education Conference and Exposition offered advice on how product and services providers should approach apartment companies.

Product and services procurement decisions are made at different levels of apartment companies, so it helps to consider the organizational structure of the targeted company, advised panelists at the National Apartment Association 2013 Education Conference and Exposition, held in San Diego last week.

Speaking on the session “Selling to Different Ownership Entities,” the panelists provided advice to product and services suppliers regarding how to successfully approach and obtain business from apartment companies.

As vendors enter into discussions with apartment companies, it is very important that they understand the buying, authorization and approval structure of the company in question, said Kurt Sullivan, vice president of property management at Douglas Allred Co. Sullivan said it is often immediately apparent during discussions whether the supplier is informed about the company.

Moderator Susan Weston, principal of Susan Weston Co., outlined how various ownership structures could affect the product procurement process: Owner/managers are investor-owners; REITs are third-party managers; L.L.P.s and corporations have institutional clients; and private owners are involved in joint ventures. But identifying the right person to approach could be as simple as asking over the telephone or researching the Web site.

Speakers agreed that very often the C-suite executives do not make the buying decisions. Suppliers often assume that “if they start at the top, they are exposed to all levels of the company,” said Joe Greenblatt, president & CEO of Sunrise Management. “The reality is that I do not have time to dig into every product and service. I am probably the worst guy to speak to.”

There are other reasons apartment companies do not favor a “top down” approach to product and services procurement. One reason is that there is “a lot more work on our end,” said Melise Balastrieri, vice president of property management for MG Properties. The top executives will have to meet with the regional manager to secure their support for the decision, obtain feedback from the site level, and incorporate that feedback into the rollout of the product. If there is “influence from the site (in the buying decision), that makes for a much easier rollout for us,” said Balastrieri.

Once selected by top management, Greenblatt advised that suppliers should not “swagger into the property” with the attitude that “you have to work with me now. That’s brutal.”

Among the most effective ways for vendors to “get their foot in the door” is to offer free trials. Sullivan described an instance in which a cleaning services provider promised to improve results in a mall that was particularly challenging, and the contract was eventually extended to all malls in the portfolio because the service was performed so well. Balastrieri said that 30- or 60-day trials in some cases work very well.

She added that one of the most outstanding ways a supplier caught her attention was to email a point-by-point comparison of the product she was using versus the product they offered. The vendor provided a list regarding how “they do this and (our product) does that,” she said. “I loved it.

“First, know what your potential client is using, and then understand how (your product) is better,” she concluded.