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How Do You Get Multifamily Residents To Part With Their Data?

Dave Marcinkowski is a Founder/Partner in Madera Residential and Quext, focused on creating smarter, healthier apartment communities. 

In 2021, data is the new oil. The world economy was transformed by “liquid gold” in the last century, and data is proving just as transformative this century. While the value of personal data varies depending on what’s included, a recent report estimated that the value of an average adult’s data in the U.S. is around $35 every month.

Merchants and other organizations collect a veritable treasure trove of data about consumers every day. Yet, with ever-changing data privacy regulations increasing in intensity and strictness across the globe, it’s clear that consumers are worried about the unbridled use of their personal information. So, the real question remains: How can we tap into the potential revenue streams offered by these massive caches of data without losing the trust and goodwill of the consumer?

For owners of multifamily residential communities, the benefit of using and selling resident data can be significant. From contact data to demographic info to behavioral data, multifamily residents are a significant source of valuable data. If the multifamily industry can convince more residents to willingly part with their data, the likelihood of reaping these benefits — without running afoul of privacy regulations — is even greater.

I’ve previously written about the need for putting multifamily data on your company’s “balance sheet,” that is, to monetize this data while also assigning it an innate value as one would any other corporate asset. To take that thinking a step further, we must ask and answer the questions: Who actually owns multifamily data? How we can get residents to willingly part with their data? And, what is the best approach to monetizing data in a climate of consumer distrust?

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Whose Data Is It Anyway?

Before you or any third party can monetize data, you need the legal right to use it. But does the data belong to the person it’s about? The company that collected it? And if the terms and conditions in fine print do grant access, what happens then?

All these questions need to be answered in every scenario where you can collect data. As a rule of thumb, the following boxes need to be checked before you can move forward with monetization.

• You have the legal right to use the data.

• The consumer can reasonably know that you’re using the data.

• The data is appropriately anonymized to remove personally identifiable information.

Despite any fine print in your leases or HOA contracts, public opinion says that the person who provides the data — in this case, the individual consumer — owns that data. I’ve noticed that most Americans seem to believe that they should have ownership over data about them, including whether it’s used for a profit or not.

American consumers prefer when companies are, or at least appear to be, upfront about whether their data is being used and profited off of. Regardless of whether they’ve agreed to it, keeping consumer data anonymous is the best way to make consumers feel like they aren’t being taken advantage of.

So, the answer of who actually owns the data depends on the specific paperwork, such as a signed rental agreement. However, in the eyes of the consumer, they want to feel in control of how their data is being used. In the case of a multifamily residential corporation, it would be easy to sneak data usage into a rental agreement, but you’d risk losing those residents’ trust and thus losing future revenue. Transparency is always the best policy.

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Incentivized Consent

Even if you’re legally entitled to use resident data, offering the opportunity to opt in or out of data mining keeps your residents in good favor. Often, from my experience, Americans will willingly give up their data, even if they don’t realize it.

I’m not speaking here about elusive contracts we’ve seen before that state upfront the potential for liberal consumer data usage. Rather, I’m referring to the relatively minuscule interactions where consumers either don’t take the time to opt out of data mining or they opt into data mining for convenience.

For the multifamily industry, incentivizing consent might look like offering a small discount on rent for residents who allow the use of their data. The reason incentivized consent is so important in the context of data is that you are giving the consumer the idea that they’re in control of their own data. When a resident willingly signs up to receive something of value in exchange for their data, this also establishes the value of the data itself. This ties into getting multifamily data on the balance sheet, but it’s also a good way to make your customers feel like they’re giving you data as opposed to you taking it from them without consent.

Giving Residents A Reason to Say “Yes” To Sharing Data

At this point, consumers are now aware of how important their information is to businesses, and they aren’t going to give it up for free as easily as they once did. To make things more difficult, new consumer privacy laws continue being thrust upon companies in every industry around the globe, including multifamily. Eventually, consumers will own their own data, or at least be able to control how or if it’s used.

With GDPR-like regulations becoming likely in more and more U.S. states, companies must shift from hiding the fact that they’re gathering consumer data to giving consumers a reason to say “yes” to sharing their data. In the world of multifamily, providing reasons can be as simple as giving your residents incentives or making their lives easier. Instead of fighting them for it, why not reward them to the point that they willingly share it with you?

After all, what you receive in exchange is a well brimming with “liquid gold” that you and your business partners can monetize time and time again without fear of reprisal. Everyone wins.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

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