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RATINGS REFORM: 3 Benefits of Objective Data in Commercial Real Estate

September 17, 2019

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When it comes to picking a place to live, renters want ratings and reviews they can trust. 

The average user rating of products has become a significant factor in driving sales across many industries, including multifamily.

However, there is a problem with online ratings; they are often based on a biased subset of those who purchased the product or service.

Subjective information is based on a resident’s personal opinion, interpretation, emotions, and judgment. In the world of commercial real estate, subjective does not always provide a good indication of the community’s living and service quality. 

Objective information, on the other hand, is measurable and observable. While subjective reviews are still important, supplementing those with objective ratings can be a game-changer in the multifamily market.

Below, we explore three key benefits of automated, objective ratings:

 

1. Authentic and Unbiased

Subjective ratings are no longer as trustworthy and transparent as they once were. From unauthentic reviews to cases of mistaken identity, a business’s ratings can suffer through no fault of its own.

For example, a multifamily property might receive negative ratings due to the local postal worker losing resident mail, the level of crime in the neighborhood, or how difficult it is to find available parking.

Additionally, many groups also now actively seek to manipulate average ratings by creating fake reviews.

According to a Binary Fountain survey, 31% of prospective renters claimed the most significant pain point in the apartment shopping process was finding accurate information online about the property.

In the future, subjective ratings will lose their power to help consumers make decisions. Fortunately, alternative ratings based on unbiased, objective data, and real residents are beginning to revolutionize the multifamily market.

 

2. No Need to Solicit Ratings

In the world of traditional ratings, very few happy customers offer feedback. Recent studies show that only one in 10 satisfied customers rate a business. When your business needs four, five-star ratings to make up for every one-star, it’s critical to obtain new reviews and maintain a positive online reputation. 

Soliciting reviews from residents is considered a critical step in the apartment marketing and online reputation management process. However, with objective ratings, you will no longer need to prompt residents with multiple requests to give their feedback.

Considering objective ratings are automatic, your property can receive one rating for every resident who moves out — versus receiving a few sporadic subjective reviews from renters (upon request).

An objective apartment ratings platform can build more ratings in less time than subjective review sites. With approximately 50% of residents moving out each year, a 200-unit property can generate 100 ratings.

 

3. Automatic Process

When subjective ratings first launched, they added a key element to the online experience. Today, subjective ratings are no longer as authentic as they once were — and can be difficult to obtain. Consumers are often are paid by companies to leave a rating or incentivized with free products to write a “review.”

According to one dataset, the percentage of buyers who left a review for a large private-label retailer was just 1.5%, which means that 98.5% of eligible consumers chose not to give feedback.

Imagine having an automated way to collect ratings from every resident and potentially drive leads to your property with little to no effort required. In short, objective ratings offer a seamless way to build an eye-catching number of ratings and potentially promote an accurate ratings reputation for your property.

 

Separating Fact From Fiction

Previously, consumers had to seek out personal recommendations or rely on word-of-mouth referrals when seeking a place to rent. Now, 85% of prospective renters look at online ratings at the beginning of their apartment search, and 85% also consulted reviews even if they had already received a personal referral.

With this in mind, it’s critical to consider investing in a ratings platform that helps separate the fact from fiction. Stay tuned to our blog to learn more!