Understanding and reducing resident churn is foundational in the competitive community management landscape. For homeowners’ association (HOA) managers and management companies, mastering the art of low churn can significantly impact your community’s vitality and bottom line. So what is churn, and why should you care?

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What Is HOA Churn & Why Is It Crucial?

Churn rate, also referred to as attrition rate or churn, is a key metric that measures the rate at which customers leave a business. In the HOA industry, this translates to tracking the percentage of residents who move out or discontinue their membership over a specific period. A clear understanding of your resident churn rate is critical, as it directly influences your customer retention rate (CRR), a fundamental factor in maintaining a stable, profitable community association.

Customer retention, or the number of customers who intentionally purchase your products or services more than once over an extended time, tends to be more influential to a company’s longevity than one-off buyers. Returning customers spend, on average, 67% more than first-time customers and with greater consistency. Typically, gaining new customers requires five to 20 times the resources needed to keep existing ones, making satisfied, loyal residents the bread and butter of an HOA’s lifespan.

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How To Calculate HOA Churn

To determine your HOA’s churn rate, use the following formula:

Churn Rate = (Number of Lost Residents / Total Residents at Start of Period) × 100

For example, if you managed 600 condo residents in January and the number dropped to 550 by December, you experienced a loss of 50 residents over the year. To calculate the churn rate:

1. Divide the number of lost residents by the number of residents at the start: 50 / 600 = 0.083
2. Multiply the result by 100: 0.083 × 100 = 8.3%

Thus, the annual churn rate is 8.3%.

A healthy churn rate for established businesses typically falls between 5% and 7%. If your churn is higher, it may indicate that your resident retention strategies need an overhaul. Read on for practical tips on boosting resident retention and reducing HOA churn.  

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Resident Retention Ideas for HOA Managers

Several factors can contribute to a high churn rate, including poor management practices, lack of engagement, and inadequate communication. To tackle these challenges:

1. Collect & act on resident feedback.

Routinely gathering and assessing client feedback is essential to understanding what drives resident dissatisfaction. Work with your board to identify the best feedback tools for your community. Consider surveys, polls, suggestion boxes, and online communication to compile insights. Focus on negative feedback, identifying recurring issues where residents feel their needs aren’t being met. For instance, if you receive several complaints about maintenance delays, you can implement a more efficient request system or improve response times. Prioritizing feedback that highlights improvement opportunities can help you address issues before they lead to churn.

2. Enhance management training.

Efficient management is the cornerstone of resident retention. Invest in comprehensive training programs for your community managers. A well-trained staff can handle resident issues more effectively and create a positive atmosphere. Training should not only cover operational skills but also interpersonal communication, conflict resolution, and customer service. For example, teaching managers how to handle complaints with empathy and swiftness can significantly improve community relationships and minimize churn.

3. Promote transparency.

Encourage board members to emphasize transparency in the association. Being open about the state of the community fosters trust and engagement among residents. Managers should work closely with boards to share information regarding financial matters, like budgets and expenditures, to ensure everyone understands the association's fiscal health. Suggest that board members regularly communicate goals and progress through newsletters, community forums, and updates. This approach not only empowers residents by keeping them informed but inspires them to participate in discussions and decision-making processes, ultimately strengthening the sense of community and decreasing the likelihood of turnover.

4. Leverage technology.

Encourage your board to use the latest technology to streamline operations and improve the resident experience. Managers and boards can implement HOA management software, like TownSq, to automate tasks like maintenance requests, payment processing, and communication. Digital tools can help you efficiently manage administrative functions and tasks, track feedback, and facilitate deeper engagement with homeowners. Harnessing the power of tech both improves operational efficiency and amplifies resident satisfaction by offering convenience and visibility.

5. Monitor industry trends.

Stay current on industry trends and best practices to guarantee seamless community management strategies. Attend industry conferences, participate in webinars, and read relevant publications to stay up-to-date. Implementing the latest trends and practices can sharpen your competitive edge and address emerging challenges before they become hurdles.

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Maximize Resident Retention With TownSq!

Minimizing churn isn’t just about improving numbers; it’s about fostering a vibrant, engaged community of happy homeowners. By understanding your churn rate and implementing practical approaches, like robust consumer feedback, strengthened management practices, open communication, advanced technology, and the latest industry trends, you can help increase resident satisfaction and achieve greater stability and profitability for your HOA.

Ready to upgrade your HOA by maximizing homeowner retention? Request a personalized demo of TownSq today to see how our leading, all-in-one HOA software and services can help you create a community that thrives for years to come.

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