Dec 18

Are Catastrophic Failures Worse Than Ordinary Ones?

Posted by: Entrata | Category: Newsletters,Residents

Avoiding disastrous mistakes is a primary objective for any onsite team. But there is a more-subtle concept that can help keep residents in the building: consistency.

Companies across all industries generally think that a catastrophic failure is the No. 1 way to lose customers. In actuality, a series of small customer-service failures has more power when it comes to alienating them.

That’s according to Luke Williams, who shared a bevy of customer-service myths at the 2018 Entrata Summit. Here, we’ll examine the catastrophic failure myth and how it pertains to the apartment industry.

Imagine a boiler ruptures at your community and floods the property, causing residents to take alternate routes and tiptoe around water to get back to their homes. Worse, the gym and fitness center get the worst of it and have to be shut down for a week. That qualifies as a catastrophic service failure.

Now, imagine a resident who moves in, only to discover the bathroom hadn’t been sufficiently cleaned prior to move-in. Your team quickly addresses the issue. Then, in the resident’s second month, she submits her rent payment but it doesn’t go through due to an issue with the resident portal. She receives a statement with a late fee and pre-eviction notice. A few weeks later, the onsite team misplaces one of her packages, leading to a delay in her receiving the shipment. Then her car is mistakenly ticketed even though she has a permit for the onsite lot.

Residents will often quickly get over the boiler flood, chalking it up as a one-time inconvenience. But a string of smaller service failures can irritate even the most patient of residents, who might consider other options. Large-scale failures provide the opportunity to offer a sincere apology, correct the problem and move on. The repeated unpleasant customer-service experiences can leave the impression that the community isn’t operated efficiently and push residents out the door at an accelerated rate.

This amplifies the need to remain consistent. Smaller failures have the potential to become more magnified in today’s review-heavy climate, in which residents can jump to the pages of Yelp, Google and others to voice their displeasure to the public. The ripples continue to expand by making a negative impact on prospects who read reviews when considering your community. Tech can certainly help in that regard, particularly property management software that centralizes onsite operations and ensures nothing slips through the cracks.

This is not to imply that a catastrophic service failure will have a negligible impact and can be easily dismissed. But that type of failure can have a less pronounced impact on resident retention than a series of small failures.