A few weeks ago, Eric Liu, the founder of Chicago-based RocketLease reached out to me with this really fantastic result:
Eric was excited by the results. I was excited by his results. So I interviewed him to to learn more about Eric and his business.
If you have a business or are about start one, there are some fantastic lessons from the way Eric has built RocketLease.
Onwards to the interview:
What does RocketLease do?
Eric:: RocketLease is an app that lets landlords and property managers screen their applicants using an online form. It’s an alternative to a paper application process and a manual credit check process. RocketLease streamlines the process for landlords to get a new tenant into a property.
What does Rocketlease replace?
Eric: Right now, the majority of landlords are still using paper applications. Leasing agents and property managers will typically have a huge filing cabinet full of applications for the various people they work with. Every property manager might have a different application form. They’ll have stacks of manila folders with 20 or 30 applications, and then once they start running out they Xerox a bunch more and put it back in that folder.
When an applicant is interested in a property, they’ll give them a paper form and ask them to fill it out and then attach copies of their W-2, pay stubs, whatever information the landlord is going to require. Then they’ll take that resulting information on the paper document and type it into a system online for getting background checks or credit reports. That stuff is typically acquired from third party vendors and manually procured by the landlord or property manager.
What’s the competition like?
Eric: Real estate is a competitive space, but rental applications in particular are a really small niche. A lot of the companies that do rental applications aren’t specifically targeting rental applications.
For example, you have bigger companies that are trying to do full, like snout to tail, all property management. So applications to online rent payments, tenant management, repair tickets and that kind of stuff. They have a really different charge structure, and generally they’re ranking for stuff like property management software or something like that.
This is super niche and super focused. For example, leasing agents and landlords often don’t want a full solution because they just want to get someone in the door. Like they don’t actually manage rent payments and that kind of stuff necessarily. It’s a lot more niche and it’s more focused on that specific kind of landlord. I think it’s been a lot easier to rank for that than I would have initially guessed.
Why did you start Rocketlease?
Eric: Rocket Lease is largely borne of a personal need. A couple of years ago, I started investing in real estate. Me and a couple of buddies started buying multi-unit houses and renting them out in Chicago. I still remember the first time I got an actual applicant, and I was afraid. I didn’t want to get a deadbeat tenant. What I really want to do is make sure that I had an iron-clad guarantee that he was going to pay his rent. Of course that’s not really possible, but as a first time landlord that’s what you’re trying to get.
I talked to a friend of mine who is a leasing agent. He gave me his company’s rental application form. It was this super faded, barely readable document. It asked for anything you can possibly want about a person, and once I had my applicant fill that out, I was supposed to take that document and fax it to a company in Elmhurst. The only way I knew about this company was through him, and the only piece of information I had about the company was their fax number. I at that time didn’t even have a fax machine. I distinctly remember I had to go to Kinko’s to fax it. I’d write down my office number’s fax number so that I can receive the fax back.
The deal with this company in Elmhurst, I don’t even know where Elmhurst is. I know it’s like within a couple of hours of Chicago, but it’s like some suburb in Illinois. The deal was you would fax it to them and then within 48 hours they would fax back a credit report, background check, whatever they could about this person. I remember thinking like this paper process, faxing from Kinkos and then going back to pick up the credit report, was just ridiculous and archaic with a 48-hour turnaround time.
It kind of sat in the back of my head. It didn’t really turn into anything until about a year and a half ago. I remember when I was trying to figure out what the next step was. It’s like, “Well, this is a real problem. It’s a problem that I understand. It’s a problem that other people I’ve talked to understand as well.” It’s slowly turned into RocketLease.
Do you focus on search engine optimization (SEO) for Rocketlease?
Eric: Yeah. I’ve done a lot of work around trying to rank for what I think are available keywords. SEO is always an ongoing strategy for us. We also try to rank for terms like online rental applications. A friend of mine, Kevin and I scour all these real estate forums for landlords. We look at the kinds of questions that people are asking and we take each of those questions that a landlord might ask. We basically create some of the blog posts around that and we organize them into this repository on the Rocket Lease blog.
That’s kind of one of the channels. Generally terms like what’s the security deposit law in Texas aren’t going to be really competitive terms. It is easier to rank quickly for that, but the tradeoff is that you’re writing this article for a keyword that doesn’t have a ton of volume. It’s time intensive to create enough surface area to capture enough incoming links from those kinds search terms.
Have you tried any search engine marketing (SEM) like google adwords?
Eric: I’ve experimented a lot with SEMs. I think, for example, like Google AdWords is pretty close to being a valuable channel for me, but it’s really time intensive. If I pay other people to manage it for me then it’s not really a good ROI anymore. If I manage adwords myself, it just sucks out all my time and I think it’s not the highest value use of my time yet. Either I need to get a lot better at generating long term value relative to the cost so that I can spend on it, or I need to just burn it. Right now, I’m not doing anything with it.
Let’s talk a bit about your 16.2% response rate to your emails.
Eric: I remember being shocked at the time. I was like, “Okay, so basically one in six people who receive an e-mail from me is actually responding.” Like that was shocking to me and it was really important to me because I realized that I think that’s why a lot of my customers are staying onboard. Every time somebody e-mails me, I try to really, really understand their problems and make a personal connection with what they’re trying to accomplish with the site and help guide them through it and help them figure out the best way for them to use the product.
At the time, and even now, it’s resulted in a really heavy customer support load. What I find is that so my Customer.io e-mails are going out like right as a new landlord is onboarding.
What I want to do to push them through this activation funnel.
Eric: After they sign up I want them to:
- Enter some information about a rental property
- Try creating an application
- Send out an application to an applicant
- Then, after they sent one, I want them to obviously receive a completed application.
At each of those break points, I am sending out Customer.io e-mails to say things like, “Hey, I noticed you haven’t yet entered information about your rental property. Are you having problems? If so, call me here,” and I actually put my personal cellphone number and all that stuff. I say, “Call me here. I’ll walk you through it anytime.” Or I’ll say like if they have just signed up and they haven’t done anything, I’ll send them a note saying, “Hey, I just want to remind you, you signed up for this, but you haven’t done anything yet. This is why a lot of people do like it. If you have any questions, hit me up.”
At each of those levels, I do get responses from people who have fallen off. Once I get them through the activation for the first time, which is … so it’s really time-intensive for me to get into the first time, but after the first time I think it makes them your customers for life. After that, they require almost no support because they figured out the process. To me it’s really valuable investment to get this landlord in the funnel and he’s going to just keep using Rocket Lease in perpetuity.
Any parting words or things to plug?
Eric: Well, if you’re a landlord, use Rocket Lease. More importantly, 35% of Americans are actually renting property. You might not be a landlord, but you for sure know somebody who is a landlord or you know other people who are renters who know landlords. Word of mouth has been really, really big for Rocket Lease. Let people know that they should be using RocketLease instead of paper applications.
Thanks Eric Liu for taking the time to chat with all of us!