It’s no secret that word-of-mouth advertising works. According to Zillow Group research, friends, relatives and neighbors are a resource for 42 percent of renters searching for a home, making personal connections the top resource after looking online. And 17 percent of renters first learn of their new home from their personal networks.  

One way you can turn this data into a marketing advantage is to build a resident referral program, so your renters are motivated to help you find new ones. Use these tips to build an effective referral program that will help generate leases, lower marketing costs and fill vacancies.

Give great service and nurture relationships

Grow your fan base from the ground up by providing responsive, professional and fair service to all residents. Residents are much more likely to promote your units when they’ve had a great experience living in them. Your business needs to earn its place at the top of residents’ minds.

Talk to satisfied residents, or those who have referred their friends, to see how they promoted your open units, what they like about living in your community and why they’ve recommended it. Knowing how current residents talk about your community and brand can help you shape and direct the conversation around it.

Offer your residents an incentive

Your community may be a wonderful place to live, but sometimes residents need an extra push to speak out and recruit their friends. Recognize and reward your residents for referrals through rent credits, gift cards or cash — survey them to see what kind of reward they prefer. A $100 check or rent reduction per resident referral can help you boost occupancy rates, save on marketing costs and reduce the time units sit empty on the market.

Related: How to Recognize Top Residents 

Increase awareness about your referral program

Maybe you already have a referral program for your residents but aren’t getting results. Is it because there’s a lack of awareness about the program and its incentives? Once your program is in place, market it to your residents through email, newsletters, social media channels and even elevator signs so they know to take advantage of it.

Make sure you explain how the program works — clarify whether prospective renters need to mention the referring resident’s name at first contact or if your resident should forward you their interested friends. Once the lease is signed, make sure you follow through with your resident so they receive the reward.

The more satisfied your residents are, the more likely they are to recommend your community to friends and family. But even content renters move on. In fact, almost half (46 percent) of renters who moved within the last 12 months already have plans to move again, now or within the next year, according to Zillow Group data. It's all the more reason to nurture your renters and use their ideas to refine your referral program on an ongoing basis.