By Stephen Ursery (MultiFamilyExecutive.com Article) — Executives at Alliance Residential Co. recognize the indispensable role regular market surveys play in getting pricing right.
That’s why, some time ago, they decided the company had to move away from the traditional Excel-based approach to the surveys. These days, the operator is relying on a third-party, cloud-based database to make the execution of the surveys more efficient and the information they contain more accurate.
“We think it’s just foolish to not use every piece of technology that allows you to make better decisions faster,” says Brad Cribbins, president and CEO of Alliance Residential’s management division. “And it was clear to us that the way market surveys are often compiled is not as sophisticated and helpful as it needs to be.”
A Cumbersome Process
The apartment industry has a reputation for being behind the times when it comes to technology. Perhaps nowhere is this stereotype more valid than in the way a community surveys its competitors.
The production of these surveys often unfolds this way: associates who already have many other demands on their time place phone call after phone call to comparable properties to gather information about asking rents, occupancy rates and concessions. Often, the person they need to talk to isn’t immediately available, necessitating rounds of phone tag. This process can easily consume three to four hours of a given day, depending on the number of properties within a community’s comp set.
Another problem: these onsite associates often are unprepared to ask the kinds of questions that will ensure the data they receive is accurate and represents a true apples-to-apples comparison to other competing properties.
Then comes the compilation of the data. Typically, associates manually input the data they collect into Excel spreadsheets. This, however, can lead to a lot of problems. Time-pressed team members may enter the information incorrectly – assuming the data is correct to start with. They can even spend too much time doing little things like adjusting the column widths and the row heights to make the spreadsheets easier to read for other associates.
Additionally, there is the challenge of version control: once a market survey in Excel is passed along for review and study, team members begin saving and emailing each other different versions of the same spreadsheet.
“Excel is not a database,” says Blerim Zeqiri, founder of BI:Radix, a web-based business intelligence solution and market survey platform. “Granted, it does enable users to track, sort and filter data to a certain extent. But not in a way that allows operators to quickly and easily identify trends. And when you’re pricing apartment homes, a knowledge and consideration of both short- and long-term submarket trends is absolutely vital.”
A More Sophisticated Approach
By focusing on real-time market intelligence, Cribbins says, Alliance Residential has gained a more streamlined and high-quality process.
Onsite teams are no longer spending countless hours working to collect competitive data. By leveraging cloud-based technologies, Alliance Residential enables a community’s competitive properties to easily and automatically upload information about asking rents and other key business intelligence metrics like availability and any new amenities details. Additionally, limiting the role of onsite teams and standardizing the information submitted by other properties has resulted in more accurate data and true apples-to-apples comparisons.
“When you’re relying so much on onsite associates, the human element has a huge impact on the quality of the surveys,” Cribbins says. “Did your associates look at the comp set the right way? Did they understand who and what their product type was competing with? All these things start to play into the way we actually get these numbers.”
Apples-to-apples data removes the need for knowledge-based assumptions. The data is there and in black and white – enabling the firm to more effectively analyze pricing trends in their community’s submarkets.
“In Excel, once you’ve populated that data in a single market survey, it’s kind of dead,” Cribbins says. “You can look at it, read it and evaluate it, but it’s not actually in a database where it’s continuing to live and can be compared to older and newer surveys. Now, our survey data is in a living environment that allows us to identify trends and look at analysis as it relates to different unit types, different submarket dynamics.”
Better Positioned to Price Right
When it comes to pricing its apartment homes, Alliance Residential relies on a variety of sources. To start with, there’s macro market data that’s supplied by the likes of Axiometrics. All of it is valuable, Cribbins says, and all of it informs the decisions the company makes about rates.
But it’s hard to overstate the importance of accurate, real-time and transparent information about a community’s comp set and the surrounding sub-market. Now, according to Cribbins, Alliance Residential is more confident than ever that it’s putting together its market surveys in a way that ensures it’s getting the information and analysis it needs about competitive properties.
“We’ve made it easier for our teams to gather that information in a single location and analyze the data in a real-time way,” Cribbins says. “That’s having a powerful effect on our ability to make sure our rates are where they can and should be.”