When evaluating the pricing of its communities, Alliance Residential likes to use a wealth of information.
The operator considers the macro data contained in monthly and quarterly MSA market reports
produced by third parties such as Reis and others. But when it comes down to it, it’s impossible to top the importance of micro data. Specifically, real-time information about pricing in a community’s comp set.
And to get that indispensable data, Alliance turned to Radix.
“As is the case with most operators, our team members weren’t using a very cutting-edge process to get comp data through their market surveys. They were calling properties and putting the information they gathered in an Excel spreadsheet,” says Brad Cribbins, President and CEO of Alliance’s management division. “Now, with Radix, we have a substantially more sophisticated platform that allows more strategic analysis than anything an Excel spreadsheet could offer.”
The Problems with the Old Way
Before implementing Radix’s cloud-based solution, Alliance used the traditional process for conducting market surveys of competitive properties. This methodology not only impacted operations but hindered the firm’s ability to effectively price apartment homes to the submarket.
To summarize, onsite associates would spend hours making call after call to competitive properties to gather data about the properties’ asking rents, concessions, occupancy rates, etc. The busy associates already had many other demands on their time. Therefore, compiling the data from all of the comp communities represented a considerable challenge.
Additionally, too many associates were ill-equipped to ensure they were receiving accurate data that would pave the way for real apples-to-apples comparisons with Alliance’s communities. And sometimes, they weren’t as tuned in as they needed to be about who their competitors were.
“Did your associates look at the comp set the right way?” Cribbins says. “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.”
By relying heavily on the onsite teams to gather competitor data combined with leveraging 30-or-60-day regression market data from third-party providers, Alliance recognized they may not be as proactive in pricing as possible.
“In revenue management it doesn’t matter what method or system you use to price. But what is vital is being able to accurately determine where you fit within your submarket,” said Tyler Rife, VP of Revenue Strategies for Alliance. “Most ways to aggregate data have a certain level of error to them – either from the collection process itself or the timeliness of the data – and we needed a way to improve that accuracy.”
Powered Up Pricing
Now, Alliance has completely revamped the way it’s conducting its market surveys and aggregating data. And the impact has been more than just streamlined operations; with Radix data in place, Alliance has powered-up its pricing to become more agile and proactive within its submarkets.
Radix streamlines the data collection process in couple different ways, including direct integrations with property PMSs and with its patented SurveySwap™, which enables communities to automatically exchange information with their comps through a cloud-based platform. The result is more accurate and timely data and less time spent by associates making comp calls.
“It’s dramatically limited the amount of time and energy that our teams at the site level have to take to call other properties. It gives them time back to handle all of the other responsibilities they have,” Cribbins says.
Furthermore, the idea of sharing data between competitive communities elicits the ‘get something in return’ notion, Rife remarks.
“Not only does the SurveySwap make things easy for property team members, it offers a way for them to benefit as well. As they share data, they receive data back and that improves their pricing opportunities as well.”
Radix also offers another layer of validation to the data collected and shared. If there seems to be an extreme variation in pricing at one of the properties in the competitor set, the Radix team flags it and reaches out directly to that property to gather the correct information.
The cloud-based product also provides a centralized database for team members to view data. Its analytical tools illuminate pricing trends over time, something Excel can’t do.
“It allows the data to be in a living environment to start going through trends,” Cribbins says. “You can start looking at analysis as it relates to different unit types, different submarket dynamics. There’s a whole range of things that you can look at and that might have an influence on how you change your pricing.”
Rife agrees, “the way the Radix platform is designed – with its sharing capabilities, second-level of validation, and real-time data – we believe we are now getting closer to truly clean data that is as close to 100% accurate as possible,” he says. “Pricing in the industry can change on a daily basis and the data from Radix will allow us to get to the next level of pricing to be more accurate and more proactive.”
In the end, Cribbins and Rife believe there’s no doubt that Radix enabled Alliance communities to more quickly identify pricing trends in their submarkets and adjust rents accordingly. It’s empowered the company to have more confidence that its rents are where they need to be.