The massive amount of renter information captured by multifamily owners, both online and within a property management system, would be the envy of many marketers.
Demographics, lifestyle profiles, consumer behaviors: If you think about it, your business generates a ton of data. But how can owners mine and organize all of those facts and figures to unearth real opportunities? Several software companies are already working on it.
“Being able to take this unstructured data, define it, and then put models on top of that is what [industry specialists] are working on,” says Amar Duggasani, executive vice president at Atlanta-based revenue management software provider Rainmaker LRO. “There are a lot external factors that have not factored into revenue management solutions before, and that’s kind of the next big wave in how we can take all of these data sources and apply these data mining principles.”
Several larger owners and managers, like UDR and Riverstone, are already starting to come up with a game plan. But it’s not that smaller operators don’t have the same opportunities or drive to mine data. It’s simply that they lack the tools.
“Primarily the movers in data analytics and multifamily are going to be software providers that see an opportunity to aggregate info and can sell that organized info and interface to owners,” says Steve Lefkovits, president of Emeryville, Ca.-based Joshua Tree Conference Group.
The data driven possibilities are in customer relationship management (CRM), were we’ll see a boom in CRM system use in multifamily, he adds. There’s a strong interest in better disciplined and more transparent ways of managing leads and doing proper customer conversion, and there just might be room in the marketplace for new software companies to flourish.
With the amount of data up for grabs (about 1.8 zeta bytes of data exists online, to begin with) and a dizzying array of data sources, it’s easy for apartment owners to brush off the emerging trend.
But it’s just as easy to learn how to best utilize this data to increase the performance of one’s portfolio. With some key information, even small players can be early adopters of data mining and predictive analytics without feeling overwhelmed. Here are three tips from industry experts on how to get started.
There’s simply too much data for any one person to plow through to make smarter decisions about their properties. And until a surefire system is created to streamline and organize such data, it’s best for operators to search for data in an arena where they’re trying to make immediate changes. “You can’t measure everything,” says Kristy Simonette, senior vice president of strategic services at Houston-based Camden. “We have to pick certain things we think are important.”
Drawing a benchmark is the next step after determining what pieces of information are most valuable to your bottom line, Simonette adds. It’s not enough to have the data in front of you–what do you intend on doing with it? Better yet, how do you stack up against the competition?
Keep an Open Mind
Data sources are constantly changing. It’ll be long before experts finally warehouse the information, and before vendors present software that can adequately collect it. While you may have discovered the best practice to make your property better, be open to the fact that experts are still trying to figure out how to define unstructured data, whose evolution makes the process even more difficult to pinpoint when the multifamily industry will be officially caught up with its retail counterparts.
“It’s not something we can say where six months down the road we’ll have everything addressed,” says Duggasani. “Because then there will be new data sources to look at.”