Since our last He Said, She Said on buying A $2K tube amp was a hit, we’re going to try it again.
The Background on Today’s Conversation
We’re now in our second holiday season with our $50K duplex fully rented. Unlike last year where one set of renters was having money problems and we were eager to see them go, this year we have 5 sophomore and junior honors students at the local university who treat the place with complete love and respect. They’re great and we’re hoping that they want to sign on for another year. Since part of our philosophy on being a landlord is keeping tenants we like happy, a few weeks ago I asked Mr. PoP if we should add them to the Christmas cookie and card distribution list. His response: “No – we should give them cash.” Since cash costs more than cookies, I wasn’t ready to hop on that train. Here’s the gist of the conversation.
I may be letting in some of my work life here, but I view the renters as clients who are using our services. Unlike the last set of “clients”, (who were fired!) we’re hoping this set stays around for a while. To that end, I’m pretty happy to get ‘em a few gift cards as a way of saying thank you.
After breaking out my trusty calculator I can see that the $100 we spent on the gift cards is about .5% of the $18,000 that we gross on the duplex each year (.5% is .005 fo the liberal arts majors in the room). When you consider that we usually lose a month’s rent when we switch tennants, and that the tennants can really make a mess of the place if they care to, putting a little money into maintaining the relationship doesn’t look so bad in my eyes.
Besides, they’re college kids for petes sake! Doesn’t anybody remember how much $20 was back when we were in school? It was big bucks! It almost seems scrooge-ish not to share our good fortune with those who have contributed to it with their rent this year.
Where Mr. PoP brings elements of his work into the mix when it comes to dealing with our renters as “customers”, I tend to think back on when I was a renter. None of my landlords ever even told me so much as a “Happy Holidays”, so I’d have been pretty freaking stoked to get a card and a tray of cookies.
They pay us, why the heck would we give them money at the holidays? This isn’t even like tipping the garbagemen or anything, since we’re the one providing the service. To use that as an analogy, the renters would have to tip us extra this time of year!
Now, I know our renters are hard-working students. In addition to their studies, they’ve all got jobs on campus and at the mall to help make ends meet, and I have a lot of respect for them for that. But I just don’t feel like money off the rent or giving them a gift card is really going to make that big of an impact on their psyches that when they’re up for renewal in four and six months, respectively, that they’ll remember our holiday card and stay put.
But hey, I’m not the salesperson out of the two of us, so what do I know?
Mr. PoP was seriously digging his heels in on this one. When we started negotiations, he wanted to give each unit in the duplex $100 off the rent for the month of December, which I thought was a little ridiculous. I countered with a $10 gift card to Target, then accepted his $20 Target gift card counter offer. It wasn’t until a few minutes later that it became clear he meant $20 per tenant (we have 5 tenants – so $100!), not $20 per unit.
I growled but accepted it (she sounds like a lioness when she does that, its scary!-mr. pop). Having a fight with Mr. PoP over $60 just wasn’t worth it. End result – a compromise at a cost of $100, exactly in the middle of where negotiations began. But holy hell… they better renew or I’ll be ticked.
What’s your take? Is this a good customer relations strategy or just a ridiculous waste of $100? (Okay ~$75 because it’s deductible as an expense.) What would you have said if you were in the conversation?