Businesses today must utilize digital tools to retain customers and thrive in the real estate industry, especially in the multifamily industry, says Knock CRM, a CRM tool for multifamily property owners and operators.
The proptech company recently expanded its KnockNetwork partner ecosystem and launched its partner directory and portal. The company says in order to deal with factors like emergency repairs, offering renewals for current residents and facilitating communication between owners, investors and law enforcement, property managers must utilize new technology and services to drive efficiency in the marketing and management of properties. Moreover, the housing market is seeing an influx of demand in the multifamily rental segment, driving increased importance of these tools.
Knock also recently had a change in its leadership with the additions of Jen Chestnutt as its Vice President of Marketing, Alex Griffis as VP of Product and Jen Jackson as its SVP of Customer Success. They aim to help Knock’s growth and solution portfolio expansion, while strengthening its customer experience.
These announcements follow the company’s June launch of its new AI-powered leasing tools, called AI Voice and Call Intelligence. Knock says these enables its leasing teams to improve communication and reduce dependency on third party services. It also established the Knocking Down Housing Barriers initiative to help renters get housing despite having a low credit, income and eviction history in partnership with OneApp Guarantee.
Finledger spoke with Demetri Themelis, Knock’s co-founder and CEO about how AI technology and CRM can help the multifamily industry in succeeding in a competitive market, while saving costs and recuperating from the pandemic. Themelis also discusses Knock’s property management system’s integration with AppFolio, a real estate cloud business and property management platform.
Q:Why did you start Knock?
A: The reason we started Knock was because we were frustrated renters. So in my and my co-founder Tom Petry’s careers, we were working in finance. In the five-six year career period, before Knock, we had both been living in different places all over the country. I personally had moved to San Francisco, back to Seattle, back to New York, back to Seattle, back to New York. We were keenly aware of some of the pain points from a renter’s perspective, just thinking through the customer journey.
And we had a lot of different ideas for ways we felt like we could make the experience a better one for renters. But we really didn’t know much about the other side of the transaction, the property management companies. So we started, everything started, by bringing all of our ideas for how we could make things better as a customer and customer to property managers, and asking, “Which of these ideas seemed like things that you could adopt?” and “What’s interesting to you?”
Our very first product was an online scheduling tool, it was very much like a Calendly, that was plugged into an apartment listing, so that you could see an apartment and book an appointment, and know that a landlord is going to be there, instead of having to do back and forth with phone calls and emails.
Our initial widget was scheduling, and it was the value prop to the property managers for converting search traffic to foot traffic, 24 hours a day. That was a great starting point. Customers felt a lot of motivation to adopt that.
Online scheduling, of course, isn’t new to many industries, but it just hadn’t made its way into this particular customer journey. And there was a lot of motivation, and not a lot of perceived risk to try it. There were other ideas we had that people felt like, interesting, but you know, too scared to give that a shot. So that was our foot in the door.
From there, you start to learn the thigh bones connected to the hip bones connected to the knee bone kind of thing, just listening to our customers and trying to smooth out rough edges and find product market fit, we started layering in more communications layers around the scheduling.
Because we found out that you can’t be a calendar of record, if you’re not the inbox of record. And then if you’re the calendar of record and the inbox of record, you have some pretty great data to draw some really great insights into sales and marketing performance.
Now, we better be the analytic system of record for those insights. And to condense five years of really streamlining our product market fit, you wake up one day, and go, “Oh, well, we’re not a scheduling and communications and intelligence platform for property managers, we’re just a CRM for this vertical.”
To wrap up the thought, we did not wake up one day and say, “Let’s go build a really purpose-filled CRM for a vertical that’s notoriously been behind in technology and capture this trend of verticalization of CRM. We didn’t, I wish we were that smart. But really, it was just pulling on the thread of the pain points that we felt as customers, and I think anybody who’s ever rented can appreciate those. They’re pretty universal, and then the organic path to finding product market fit and figuring out who we were in the world and who we wanted to be.
Q: What are some of the recent multifamily housing trends that you have noticed?
A: There’s a number of them I would say. The big one is that our customers nationwide are experiencing the highest occupancies and the highest rents ever, even on an inflation adjusted basis.
So you could say that’s driven by really big macro trends, like overall population growth in urban areas, it’s driven by people’s desire, like family formation happening later, and people living in apartments longer.
[During] COVID, there was not a lot of new supply coming into market. Projects were started, and then peak-pandemic supply chain issues and construction delays created a supply constraint to all these things.
And there’s probably a thousand other factors that come together to create a strong tailwind for the financial performance for our customers. So that’s one really big trend.
Another I would say is sort of a technological Renaissance, where I’d say, COVID woke everybody up to the necessity of technology to operate assets.
During the peak of the pandemic, if I can’t do an in-person tour, then I can’t sign a lease. I don’t have a business. So that brought technology to the forefront of a lot of conversations, and helped to accelerate the adoption curve of technology within this vertical of property management that has notoriously been a little bit behind the times.
Technological innovation and adoption is another big macro trend. And I think those two are really the big macro, then underneath that, there’s a thesis that develops, which is, “My rents are high, my occupancies are high, my costs are also probably pretty high. I’m starting to look at technology. How do I improve performance, customer experience, be competitive, deploy more capital, in order to be able to compete in this market as a housing provider? You know, I’m going to need to really focus on productivity and efficiency, because really, rents can only grow so fast and occupancies are only so high.”
This focus on productivity is subjective to these other macro trends. If you understand those other two macro trends, then you really understand why productivity is top of mind for everybody in this vertical right now.
Q: Recently, Knock integrated its property management system with AppFolio. How is the CRM tool faring today?
A: AppFolio is more of an industry parlance. There’s a category of companies that we call property management systems, or property management software.
Knock is a property management software, everybody who builds technology and software for property management companies could be categorized as property management software. But when we refer or when people in the industry refer to PMS, or property management software systems, they’re really referring to the core accounting platform. That is sort of a back office requirement of operating multifamily assets.
There are a number of large companies out there who fulfill that, and provision those financial products to customers. Companies like RealPage, Yardi, Entrata, MRI, and of course, AppFolio, which is publicly traded.
Appfolio is a little different than the rest of that pack in that they have traditionally made their mark in the SMB segment of the market, and they really focus on single-family housing providers and multi-housing providers.
But in the kind of long tail of the market, not so often huge properties, but portfolios of smaller multifamily housing properties. For illustrative purposes say, a 1000 units of eight plexes and 16 plexes, versus 1000 units in one or two big giant, vertical communities.
AppFolio is a leader in that segment. As they continue to grow and are interested in the mid market, enterprise type customers, I think the sort of product needs to evolve. That means an out of the box solution, that works for a smaller SMB segment, it’s not as useful for big enterprise customers with more bespoke needs.
So we used our experience integrating with all the other PMS systems, RealPage, Yardi, Entrata, and MRI, and built the first CRM integration that AppFolio has done with a third party. In order to offer mutual customers a better experience, and more flexibility and how they build their front office tech stack.
It’s going well, it’s a new partnership. They have a really strong team. They’re fun to work with.
Q: What is the importance of using new tech like AI in multifamily housing today?
A: It’s critical, and especially in addressing some of the macro trends that we talked about at the beginning of the call. We talked about, you know, high occupancies, high rents, and costs just started going up. Managers are always thinking about how to provide a great customer experience, but also how to do it more efficiently.
When you start to really analyze the workflows and the customer journeys, you see that there’s just a tremendous amount of activity in inbound lead activity, in qualifying those inbound leads in order to advance them in the sales pipeline.
Leads start with multifamily properties by phone calls, emails, texts, chats or maybe social media messages. There’s a funnel of different communication channels and phone calls.
Inbound phone calls account for 55% of all initial traffic, lead traffic to property management companies. That’s why we started with AI voice. As we’ve marketed, our intention is to create a truly omni-channel, integrated, conversational AI layer to handle all of that inbound traffic and provide better experiences and better outcomes.
With respect to phone calls, two things can happen when somebody calls the property. The call is either answered or it’s not answered. But the goal remains the same to qualify and convert that prospect.
How do we think about leveraging? How do you solve those problems, whether a call, or the problems that come with real estate, say that the obstacles that come with getting you to your goal? When calls are not answered today, they usually route to a third party call center answering service, which is usually humans that have limited information, and they do their best to lead score and qualify and advance those phone calls. But it’s expensive, and the ability to add value is relatively limited, because there are third parties.
So in those cases, with the voice AI product we can effectively, say, do the same job that an outsourced, contact center or call center that your missed calls roll to. The bots, so to speak, process that volume of calls that are missed, help to better qualify and convert them, and get them what they want in real time, with a nice conversational AI product and being plugged into so much information to be able to offer them appointments or more information, etc.
That’s a way to add business productivity and improve customer experience. In the case of when calls are answered by someone in the leasing team, and that’s a big portion too. Managers still want to know what happens. What happened on those calls? What information did we collect? Did our teams do a good job in serving, providing a customer experience that we expect?
There’s a lot of ways that that’s addressed today. Management companies will pay for secret shops, they will spend a lot of time listening to recorded calls, and putting together sort of a training regimen or recommendations for teammates. Those are all very time consuming.
The voice AI product helps to kind of facilitate better results and better conversions for missed calls. The call intelligence product is really around aggregating a lot of that data that’s happening when calls are answered, in order to understand trends and draw insights from that, that will help provide for a more effective sales organization. Help them build better products for the future, help them shape their marketing and positioning language, and help them provide coaching and enablement to their teams who are looking to grow their careers.
There’s a number of downstream benefits from really aggregating a lot of data, and presenting it to customers in a way that helps them progress in any number of those sort of vectors of productivity enhancement.
Q: How has Knocking Down Housing Barriers as an initiative helped renters in finding affordable housing and overcoming challenges like low credit scores?
A: We have a really amazing partnership with a company called OneApp, based in Portland. We call our initiative Knocking Down Housing Barriers. If a prospective renter doesn’t meet certain qualification criteria to access desirable housing, many times someone like you or someone like me might have the benefit of having someone in our network, like a family member, or a friend who could act as a co-signer for us. Someone that can help us to access that housing, if we independently for whatever circumstances aren’t able to independently access that housing, whether it’s credit or regardless history.
Some people are fortunate to have that kind of network where they’ve got that benefit, and that helps them access housing. Now, what OneApp understands, and what they’re addressing, is that not every individual has that benefit.
They may be a wonderful renter, they’re gonna pay their rent on time, and be a fantastic value added member of the community and really strengthen the neighborhood, and be a great tenant to the owner, and a great member of the community. But there’s a lot of people who can fulfill that, but they don’t have the ability to access housing, because they are not going to have the benefit of that network.
So what OneApp does is it really acts, we’re here to be your co-signer in a sense, and we’ll sort of do our own more holistic qualification. And if we think that you have products like insurance, since you like insurance products to help ensure that they can handle that “risk of taking on acting as the co-signer” and so there’s a there is a cost to providing that sort of co-signer benefit to helping individuals, especially in vulnerable communities access housing.
That’s where Knock steps in and our philanthropic efforts, we want to help to subsidize that cost. When there’s individuals who say, “Hey, independently I’m not able to meet the requirements to access housing,” I can go to OneApp and say, “Hey, we will step up and be your co-signer.” But there is a fee to do that.
If that individual, for whatever reason can’t step up to pay that fee, that’s where our partnership with Knocking Down Housing Barriers comes in, because we partner with OneApp to help make sure that we’re getting essentially that access to housing to the people who need it the most. And it sucks that we live in a world where this problem even needs to be addressed.
But since that is the reality and it’s a pervasive problem, and the fact that predominantly, there’s a lot of single mothers and working mothers of color, it’s shocking what a high rate that is. They have their overall applicant pool, and the fact that we’re able to provide some assistance in helping creating access to housing, especially for a portion of the population that is incredibly value added parts of our communities, and just for whatever circumstances needs that helping hand.
It’s a privilege to be able to have that partnership with OneApp. It’s like I said, it’s sad that it’s a problem. And it’s sad that it’s unfortunately a problem that is so big, that we can really scale our efforts, but we’re really pleased to be a partner in that and excited to continue to scale our efforts on that. That’s really the core of our Knock-driven philanthropic efforts in the multifamily sector, its through this partnership.
In other recent proptech news, Berkadia, a joint commercial real estate venture between Berkshire Hathaway and Jefferies Financial Group, signed a multiyear agreement with rental data reporting fintech Esusu. Walker & Dunlop, Inc., a commercial real estate service provider, expanded its affordable housing platform with a new investment sales team, to help clients “create, preserve and revitalize affordable communities.”