VAMA Conference Take Away: WTF Technology?

We live in a real-time, social, mobile world - an era fueled by big data, consumer technologies and the digital economy. Technologies are transforming the business landscape and blurring boundaries between business departments as well as companies and consumers. Digital information abounds; but, uncertainty prevails when it comes to the disruptive force of technology in today’s marketplace.

Marketing has its hands in both enterprise technologies (those technologies that drive our business processes and marketing strategies) as well as consumer facing technologies (those technologies that allow our prospects and residents to find our communities online, interact with onsite teams and improve the resident life cycle). These technologies are being disrupted at a furious pace. Thus being in marketing today is like being a hamster on an accelerating wheel. 

Because all businesses are so entrenched in technology and technology is inherently unpredictable and wrought with change, management today – whether you’re managing people or properties – is change management. As marketers we need to drive change within our own organizations in order to match the pace of change in the consumer market. That requires us to understand how technologies change and why they change. 

During our presentation, we discussed two theories of change through which many of the recent technology developments and innoavations can be viewed and understood. The first theory we reviewed was Clayton Christensen’s paradigm of "disruptive technologies" as described in his landmark book The Innovator’s Dilemma. With disruptive technologies, market leaders almost always confuse the market that they’re in. They think they’re in the Walkman business, when they’re actually in the music dissemination business. Thus, when new innovations come along (like the MP3 player), the market leaders dismiss them. The problem for market leads is that disruptive innovations improve at a much faster pace than existing technologies until at some point they actually better serve the customer needs. Disruptive innovations are best described by Henry Ford when he said, "If I had asked people what they wanted, they would have said faster horses." 

The pace of technological change has necessitated a second theory about technological innovation to explain those innovations that come out of left field. In an article published in March 2013 in the Harvard Business Review, researchers Larry Downs and Paul Nunes posited that these types of changes were more than just disruptive - they were Big Bang Disruptions. These innovations are far more difficult to identify as a threat for incumbents because they combine existing technologies that don’t even compete in the incumbent’s marketplace to create a superior product. According to Downs and Nunes, "they're not just creating dilemmas for innovators, they're triggering disasters for innovators." 

Consider how Pandora and Spotify changed radio; how the smart phone replaced the snap and shoot digital camera; how Twitter has disrupted the news cycle; how Netflix and Hulu changed how we watch TV (and even TV consumption behavior - did anyone else binge watch House of Cards in a single day?). Because these big bang disruptions result in better technologies, it’s changing how customers adopt technologies. According to Everett Rogers’ classic bell curve, there were previously five equally disbursed segments of the adoption process. Now there’s just two - trial users and everyone else.

What does that mean for multifamily marketers? Technology change is both constant and, in the case of software, ephemeral. In business, we can’t escape technology. Thus, we can’t escape change. We must understand that the ability to adapt is not only key to survival but the single greatest asset in gaining a competitive edge in the multifamily housing industry.

Yet, despite the need to adapt to the pace of technological change, the apartment industry has been slower to respond to the dynamics of consumer technology. One of the primary reasons for this is that there is still a significant skills gap in the multifamily market. This skills gap is especially prominent in smaller metro areas and smaller companies where they have not embraced many of the technologies being used in larger metro areas or in larger companies. In March and April 2014, we completed a member survey of the Virginia Apartment Management Association (VAMA) and found some startling results.

Of those surveyed who indicated that they make financial decisions for their community(ies), 50% responded that they have made a decision not to launch a technology at their community because they did not understand that technology or felt that they lacked the technical skills to effectively implement that technology. 42% responded that they have launched a technology at their community that they did not fully understand. Thus, not only is the multifamily industry falling behind in their ability to match consumers’ use of technology, but we aren’t fully utilizing our current technology resources.

To exasperate this problem further, we simply don’t know what we don’t know. During the survey, we asked respondents to rate their knowledge of marketing on a scale of 1 to 10, with 1 being poor and 10 being expert. The average respondent rated their knowledge as a 7. Yet, 72% of respondents were unfamiliar with 19 of the most common marketing technologies available today. Another 72% were unfamiliar with 21 of the most fundamental technology terms. If we can’t communicate with our technology vendors, we can’t effectively identify those technologies that would help us improve our enterprise and customer facing strategies.

We are confusing what industry we’re in. We think we’re in the apartment industry; but, we’re actually in the customer relationship industry. Our customers are driving technological change, so we have to keep up with the pace of technology.

By Lauren Curley