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Leveraging Incentives: The Psychology of Rewards in Multifamily Housing
This article originally appeared in the November 2024 issue of the National Apartment Association’s publication, units Magazine.
Imagine a community where residents are not just satisfied but eager to stay. Resident reward programs go beyond simple perks—they’re a strategic tool for boosting retention, increasing engagement, and enhancing a property’s reputation. The right incentives can drive key behaviors like digital payment adoption and lease renewals while fostering a strong sense of community. Understanding how to harness this power can be a game-changer for multifamily operators.
The Power of Rewards
Psychological research consistently highlights the power of rewards. According to a University of Maryland report, 84% of consumers are more likely to repurchase from brands offering rewards. Similarly, the National Multifamily Housing Council (NMHC) reports that 69% of renters already participate in point-based reward programs in their daily lives. This same principle applies to multifamily housing—when residents feel valued, they’re more likely to renew leases, pay rent on time, and promote their community through positive reviews and referrals.
Reward programs also cultivate a sense of belonging. Recognizing and incentivizing positive behaviors fosters pride in the living environment, creating a more engaged and satisfied community. The impact of these programs is clear: a 2024 Apartmentalize poll by Domuso found that 92% of multifamily leaders see resident rewards as beneficial, citing increased digital payment adoption, higher renewal rates, and improved online reputation as key advantages.
Additionally, financial considerations play a significant role. With nearly four out of five Americans living paycheck to paycheck, according to a 2023 Payroll.org poll, it’s no surprise that 66% of consumers actively seek reward programs that offer cost savings. The evidence is compelling—well-structured reward programs are no longer optional but essential for multifamily success.
Identifying Effective Reward Programs
Choosing the right reward program is a strategic decision that can directly impact resident satisfaction and financial performance. The most effective programs align with key business objectives, whether that’s improving retention, increasing occupancy, driving revenue, or encouraging digital adoption.
Diversity in rewards is crucial. Programs that offer a variety of incentives—such as cash back on rent, amenity upgrades, or marketplace rewards—are more likely to resonate with residents. A broad selection ensures higher engagement and inclusivity, making the program more impactful.
Simplicity is another key factor. A rewards program should be easy to understand and participate in—seamless accessibility translates to higher engagement and better results. Moreover, budget constraints shouldn’t be a deterrent; some programs are fully funded by the platform, providing significant benefits at no direct cost to the property.
The Future of Multifamily Rewards
As multifamily housing continues to evolve, so will strategies for resident engagement. Leveraging the psychology of rewards fosters stronger communities, improves financial stability, and enhances the overall living experience.
The momentum behind these programs is growing—Domuso’s poll indicates that 40% of multifamily organizations have already implemented resident reward initiatives. Looking ahead, these programs will likely become standard practice, offering competitive advantages to those who adopt them early. Increased occupancy, happier residents, and greater digital adoption aren’t just possibilities—they’re the future of multifamily housing.
Written by Domuso’s SVP of Accounts, Terri Nicholson, a member of the NAA National Suppliers Council (NSC). The NSC is a prestigious network of suppliers within the National Apartment Association, advocating for industry solution providers. This NSC Insider column offers insights and trend analysis from a service-provider perspective. Visit nsc.naahq.org/directory to explore suppliers, products, and services tailored to your needs.
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