The second Funnel Forum is in the books, and it was a great few days in paradise—sorry, I mean Terranea—one of the most beautiful resorts on the conference circuit. A busy week saw lots of announcements and deep conversations about the hot topics of AI and centralization.
A few things stood out from this year's show that indicate the industry's progress in these areas, a couple of which I will share in this post.
First, it was my pleasure to run a workshop with a group of operators on one of my current favorite topics: centralization for third-party management. (For those unfamiliar with this talk track, the evidence shows that our industry is getting more third-party-managed, which has profound implications for progress toward centralization). This session yielded a rich conversation about the opportunities, challenges and emerging strategies for delivering centralization in multi-owner environments.
Why Contact Centers Matter
Much of the conversation focused on companies' contact center strategies. To date, contact centers have not fallen within the traditional scope of third-party management. But they are an increasingly common thread between operators achieving tangible success in centralization.
We tend to think of contact centers in terms of leasing, but when companies centralize functions, it is usually property admin (the work typically done by the assistant property manager) that moves first. It is becoming increasingly clear that admin centralization also entails enabling shared services to communicate with residents.
Tasks like move-in and move-out admin, collections, and (for some companies) renewals all have a potentially high touch with customers. AI does a growing share of the work, but some calls to humans are still necessary. Addressing that need is one of the most foundational challenges for centralizing operations in a multi-owner environment. And while admin seems to be the driver of contact center adoption, it is by no means the endpoint. Lead nurturing and coordination are obvious uses for specialized, central teams.
It is unsurprising, then, that much of the most interesting discussion during the workshop was about how contact centers work in multiple-owner environments. BH Management shared valuable learnings from their operational transformation over the past couple of years. That entailed changing how property teams work with centralized services and careful management of handoffs between central resources and properties, and a growing AI footprint.
As the AI footprint grows, so will the importance of managing handoffs from AI to people—some of whom work virtually and some of whom work at property. There is a lot to this, but it is obvious from the way the discussions played out that companies who invest in developing these capabilities—some of which are technological and some of which are people-focused—will have the greatest opportunities to improve their operating models.
Making Moves in AI
AI got extensive coverage at the show because of a couple of important items of news. Recently, Funnel announced that it was to acquire selected LeaseHawk assets, creating a standalone product, "Fenix." At the same time, they announced a partnership with Sierra, a leading provider of conversational AI to many household brands.
In a discussion with Bret Taylor, co-founder and CEO of Sierra, Funnel's Tyler Christiansen explored the adoption of Sierra's AI by some marquee consumer brands like Weight Watchers and Chubbies. They discussed the opportunity for multifamily operators to benefit from a platform trained on a vast set of consumer interaction data.
The LeaseHawk acquisition means Funnel also gains an industry-leading sentiment capability that analyzes calls and helps operators understand quality, identify training opportunities, and surface general opportunities to improve the service delivered by contact centers. That is an interesting development, given the importance of contact centers to the centralization picture.
While AI is doing ever more of the work of interacting with prospects and residents, leasing shows no signs of doing away with people. For as long as there are people involved in property management, operators will need CRM. They will also need reliable ways to monitor and manage the people who are more frequently the escalation point in an increasingly AI-dominated service model.
This domain is changing rapidly. A year from now, we will know much more about how centralization is shaking out—especially for third-party operators, several (though by no means, all) of whom are making impressive progress on offering centralization to their owners. It seems likely that when property trading returns to more "normal" levels, competition for deals will push operators to accelerate progress toward more efficient, flexible operating models.
For now, though, we can reflect on another year of progress in the evolution of the multifamily operating model. I thank Tyler and his team for creating and growing the Forum as the event where those committed to driving this change can share ideas and developments, and for hosting it in a jaw-droppingly beautiful location.