Monday, May 29, 2006
Q &A With John Helm, CEO of MyNewPlace
Q.) Why did you come out of retirement to build a rental property website?
A.) I was watching the online apartment rental space over the last several years and saw that both consumers and property owner/managers were being underserved relative to the new capabilities possible with the evolution of the internet. On the consumer side, no one had introduced Web 2.0 functionality such as search result/mapping mash-ups and AJAX-style applications. Additionally, most of the sites were still cluttered with annoying banner ads and links to all sorts of â€œmoving resourcesâ€? that just degraded the consumer experience.
Q.) Why is pay for action a better model than lead generation for rental properties?
A.) Property owners look at all their marketing costs on a per signed lease basis, so why not just price the product that way? Pricing the product this way is familiar to them, as theyâ€™ve been paying locators anywhere from one-half to a full monthâ€™s rent for decades. And, since weâ€™ve taken all of the uncertainty out of the equation, we are able to price the product closer to its actual value.
Q.) How can advertisers who deal in off-line transactions ensure that they receive a commission?
A.) Since for the foreseeable future the vast majority of renters are still going to go offline to visit the property and execute a lease, a service such as MNPâ€™s and the manager are going to need to cooperate closely to track the activity. On MNPâ€™s side, we need to track the renterâ€™s behavior on our website to make sure they used our service to view the property before a lease is signed, and we need to encourage that renter to communicate with the property via our website by e-mail or phone. The consumer should reference us when they visit the leasing office, and the property needs to track this activity and attribute credit. The owner offers to pay the renter a $100 rebate, which they may only receive if they come to the MNP website to submit their claim. Unfortunately, this requires MNP to require users to register, as this is the only way we can track their activity. But for a $100 rebate we believe this is a tradeoff that most consumers are willing to make.
Q.) How can blogging and RSS feeds be used to enhance your message to consumers?
A.) Itâ€™s not as much about getting â€œour messageâ€? to consumers as it is a way to have a direct conversation with them. Thatâ€™s an important distinction. Blogs give us a way to have a two-way, informal conversation with users, and better help us live up to our promise of â€œhonesty and transparencyâ€? in our dealings with both renters and property owner/managers. Indeed, we have already received feedback from users telling us that our blog shows us as real people and not a faceless company. Thatâ€™s important in establishing trust with our users. Our participation in the blogosphere by reading and commenting on other blogs has allowed us to get direct feedback about our site. For example, on the Business 2.0 blog, readers asked questions about our business model and I was able to respond directly to answer their questions. On Lifehacker, our Director of Product was able to talk with users about our registration process. As a result, weâ€™re making changes to our registration process early next month to make it easier for users. In short, blogs allows us to have a relationship with prospective renters and owner/managers that is more open and direct. Ultimately, that should enable us to build a better service and grow our business.
Q.) How did you assess the risk and opportunity of releasing a work-in-progress website to the public?
A.) In our view, there is very little risk involved. We launched with a base site that worked well for a basic apartment search, but may not have had all of the functionality that we eventually wanted. However, even the most imaginative product development team cannot replace live consumer feedback. By placing the Beta on our website and soliciting feedback directly from our users and clients, we not only gathered valuable market research, but also generated a greater degree of loyalty among our users and clients, as we were giving them a voice in how our site could be improved. The feedback we received directly from users and clients via email, as well as indirectly by watching their search paths, let us to make numerous improvements to the site during the first few weeks of our launch. As a result, when we take our Beta off in June and start driving traffic, we will have a much more robust site that is better able to handle the high levels of traffic we plan on generating. Additionally, we now have a stable of â€œbeta testersâ€? that weâ€™re in contact with, and who seem quite happy to provide us with valuable, continuous feedback!
Q.) Why don't you have advertising on your website, and how does providing listings for free fit into your business model?
A.) As a for profit consumer service we need to tread a fine line between delivering what consumers want and running a commercially viable enterprise. If we do this properly, over time we will build a virtuous cycle of satisfied consumers who both return and refer their friends, which will in turn drive more traffic to our site and thus our clients, and in turn drive higher revenues. We believe that by providing free listings we are improving the consumer search process so much that the lost revenues by referring some users to properties that are not under contract will be offset in the long run by higher traffic, and thus more leases for our paying clients. We also return our paying clients first in any search result, as we have better information on their properties and they pay a rebate. This is a tradeoff that consumers are happy with, and it provides a strong differentiator for our paying clients, who end up getting a disproportionate share of the activity as consumers value their richer content and the rebate. As for advertising, our consumer feedback tells us that people come to our site to do one thing, find a new place to live. Anything else is an often annoying distraction, and, although we could generate some ancillary revenues, we do not think that is worth the degradation that our service would suffer in the eyes of the consumer or property owner/manager (thereby resulting in lower overall usage and thus lower revenues).
By John Gartner at 02:38 PM | Comments (1)