Data-driven software programs have become so prevalent in the multifamily industry in recent years that making decisions about the numbers these programs crunch—and the near-term futures they profess—has become more important than ever. Monday-morning calls to your comps may still be a valid method of confirming your own indicators, but the real key to data mining comes from the aggregate and knowing how to pick out the intelligence that will give you an edge over the competition. With a rental market that continues to accelerate in nearly all areas of the country, the goal becomes capturing, and calibrating, the right data at the right time to stay ahead of the curve and capitalize on the uptick, without leaving leases on the table. Yet, with so many metrics available, reading the tea leaves floating on that data stream is anything but easy.
To gain some insight into gleaning intelligence from information and finding the right path to maximize profits, Multifamily Executive held a virtual chat with four of multifamily’s data denizens: Tom Bumpass, chief information officer at Charleston, S.C.–based Greystar; Dave Cardwell, vice president of capital markets and technology for the National Multi Housing Council (NMHC), headquartered in Washington, D.C.; Bob Lamb, vice president of information technology at Atlanta-based Gables Residential; and Kristy Simonette, senior vice president of strategic services and chief information officer for Houston-based Camden Property Trust. One thing on which they all agree: Technology is central to optimal engagement with customers.
MFE: As an industry, we’re in an enviable position in 2012. How are you using technology to catch as much of the upside as possible in the market today?
Cardwell: As an industry, I think most owners are focused on technology that’s achieving three things: improving resident services, bringing efficiencies to operations, and driving greater revenue and net operating income. I think, for a lot of owners in 2012, it’s about mining the data, linking lead traffic to sources, and expanding the use of mobile apps. Everybody’s trying to drive more residents to the community portal not just to communicate, but to actually transact.
Simonette: For us at Camden, we’ve been calling this the Age of the Customer. We really want to understand our customers’ preferences for doing business with us and for talking with us. That includes everything from social media to interactive floor plans to 360-degree tours.
Bumpass: We’re really focused on using revenue management systems to ensure that we’re maximizing revenues. It’s really the only way to accurately track your latest market conditions, supply and demand, and the demand characteristics of an individual community. That, in turn, helps us forecast in the short term. We’re also using lead management systems to fine-tune our marketing spend and focus on the most cost-effective sources of new leases, which for us tends to be organic traffic generated by our website, Greystar.com.
Lamb: To go along with what Tom’s saying, I just think we’re all in agreement that a revenue management system is key in this type of economy. [The Rainmaker Group’s]LRO [revenue management software] has allowed us to respond to market changes quickly and maximize the potential revenue for our apartment homes.
MFE: On the flip side, are there any technologies that are becoming obsolete in today’s market, or that even get in the way? I’m thinking trackable 800 numbers, kiosks, and Flash-enabled websites. What do you see as expendable in today’s MF tech landscape?
Simonette: Goodbye, Flash.
Bumpass: You know, Flash-based websites can’t be rendered on most mobile devices. And as for traditional kiosks, tablets—like the iPad—are just more convenient and interactive. Text messaging, which was hugely popular, is slowing down across all asset classes. On the other hand, options such as “click to call” or “live chat” are getting more popular. This is just a really dynamic area.
Lamb: I don’t really think it’s a question of these technologies becoming obsolete; it’s more a matter of them evolving. Instead of a splash page, you want to prompt your visitors to take some kind of action now, whether that’s renewing a lease, putting in a work order, or interacting through social media. But the concepts are the same.
Cardwell: To follow on Bob’s point, I’d just reiterate that what was at risk of becoming obsolete is now being revamped or replaced. Kiosks aren’t going away—to the contrary, they’re becoming more inviting and, in some cases, mobile. Prospects and residents like them.
MFE: What one piece of technology, if taken away right now, would put you at a significant competitive disadvantage? Why?
Cardwell: It seems to me that if you use a revenue management system, removing that pricing structure would have an adverse material effect, to put it mildly.
Lamb: I couldn’t agree more—it’s revenue management. It’s now so prevalent among all of our competition that removing it would hamper our ability to respond competitively—and quickly—to price changes.
Simonette: I know it sounds weird, but I would have to say the Internet. Print is no longer impactful in many of our markets, especially as a stand-alone. We’re so entrenched in multichannel marketing, from social media and Google AdWords to review sites. If you took the Internet away, I don’t know what we would do.
Bumpass: What Kristy’s saying isn’t weird at all—if you took away my website, Greystar.com, that would put me at a significant disadvantage relative to my competition. The number of communities we feature there really lets us compete in search results. We’re continually working to provide the best online experience we can.
MFE: A lot of the trends in 2011 came down to slicing and dicing data. What’s the most important metric to track in 2012 for your portfolio? What tools help you do this?
Cardwell: I think a really key metric is the impact of social media, given the cost and effort to support it. Another one that still seems elusive is measuring and understanding prospect traffic origin patterns. Even though you can measure a dizzying number of data points, knowing what works and what doesn’t is still a difficult task.
Bumpass: It’s really about knowing what you’re looking for. I mean, with so much data being churned up, what do we really need to know? For us, being able to track rent growth to the market and our cost per lease is very important. In 2012, we’re very keen on measuring the level of engagement with online resident and prospect services, too. That means online leasing, renewals, rent payments, service requests, and social media. We’re developing a number of tools within our business intelligence platform to help us get a handle on that.
Lamb: We’re following new-lease and renewal trends very closely, as well as traffic and marketing lead source effectiveness.
Simonette: As a REIT, probably the single most important metric is how we compare to our REIT peers. But there are a lot of other metrics we live and die by—NOI, for example, is still king. To support NOI, we track all the usual suspects—customer satisfaction, revenue growth, and expense control. We’re doing it with our Operations Dashboard, or ODB. It stack-ranks all 200 of our communities.
MFE: What are your top two technology priorities for 2012, and how are you deploying capital to achieve them?
Bumpass: Our first priority is enhancing the customer experience on Greystar.com and our community websites. Our second priority is to leverage the investments we have made in cloud-based computing to improve our operating efficiency and reduce cost.
Lamb: We’re developing a new leasing tablet application so our leasing associates can access our property management system from anywhere on the property. Then, it’s online applications—we want prospects to be able to lease an apartment from Gables no matter where they are.
Simonette: Back office, it’s a major upgrade of our JD Edwards accounting platform—not real sexy but very necessary. With customer facing, it’s implementing a platform that lets customers decide how they want to talk to us, through text, e-mail, or phone, and a social online community.
MFE: What would you like to see MFE focus on in 2012?
Bumpass: The use of cloud-based technologies in the multifamily industry and online reputation management.
Simonette: I’d like to see more about balancing the cost of technology with ROI and employee satisfaction while giving us a competitive advantage. We face a lot of employee expectations with technology. As more and more Gen Yers enter our industry, how do we find the happy medium to accommodate the needs and skill sets of our Boomer, X, and Y workforce?