Business intelligence has started to revolutionize multifamily property management. Market predictions indicate that although the rental market grew by only 0.2% last year, Class B & C multifamily housing will offer the greatest return in 2018. Class B & C properties tend to be larger, with more complex management issues, including retention and maintenance concerns, as well as potential software challenges.
Despite the reputation of multifamily housing as being technology laggards, more apartment operators and managers are hoping business intelligence software will guide the future of the industry. Being able to make data driven decisions should bring light to an industry that previously relied on ambiguous information to guide marketing decisions. By embracing new technology, multifamily property management can take advantage of the industry’s ‘Big Data’ insights. Further, small-scale insights can be gleaned from the “little data” which Business Intelligence software collects for multifamily property operators.
The Growing Role of Business Intelligence in Property Management
Despite the advances, many apartment owners are still unfamiliar with business intelligence (BI). The AMLI Vice President of Revenue Management, Sarah Wieckowicz, described the state of business intelligence in the industry as being “in its infancy.”
The biggest issue property management faces with business intelligence is not understanding its practical implications. A business intelligence tool has the ability to pull data from the multiple systems running at each property, providing valuable insights to help improve and impact day-to-day functionality and overall returns. Acting practically and implementing a BI solution from Rentlytics will provide the management company a “comprehensive, centralized view” of their entire portfolio, allowing them to recognize trends. By using business intelligence in property management, property management will be able to assess trends in regard to leads, target demographics, seasonal fluctuations, performance and management costs. Understanding these trends will help you address concerns before they become costly issues.
“Without a Business Intelligence solution like Rentlytics BI, you’re stuck looking at data that’s up to 30 days old. By that point, it’s too late for owners and managers to resolve issues and they are already impacting the property. It’s also impossible to find opportunities to proactively optimize portfolio performance with stale data,” said Justin Alanis, CEO and Co-Founder of Rentlytics.
Using the Data From Business Intelligence Software
Data is making its mark on the apartment industry, but the culture of BI analysis has yet to gain widespread adoption. Many new adopters are being convinced by the benefit of data-led pricing, which responds to marketing initiatives and fluctuations in the market, such as the recent 8% growth in property prices recorded in the first quarter of 2017.
Accurate data collection for quality data analysis has been the real challenge for those adopting BI services in the multifamily property management industry. The issues have been related to inconsistent data storage, where “bad data,” includes duplicate or corrupted files, as well as unlinked, or old, data sets. When BI software was first introduced, many had issues with fixed reports and datasets, which could not be cross-synthesised. This meant data across different platforms could not interact, making it difficult to produce meaningful data analysis.
“Inaccurate, erroneous data is a big problem we see when our customers begin the onboarding process. It is such a common problem that we have made data integrity a core focus of our company. Before our client onboarding process is complete, we conduct a thorough review of their data, resolve any data issues, and once it’s in Rentlytics BI, our systems continually monitor data accuracy to ensure it remains accurate and up-to-date,” said Alanis.
Apartment Industry In Early Stages Of Business Intelligence Adoption
The purpose of integrating BI software with more traditional models for property marketing is to synthesize otherwise seemingly unrelated sources and types of information. By using advanced computational models, marketing teams can analyze the most successful pricing structures with decisions informed by data. One of the greatest problems for new adopters of BI is they see it as an off-the-shelf tool, rather than a method of analysis. The most successful adopters are the ones who have realized that BI is a tool that should only be employed with an accompanying strategy in place for how to act on the insights from the data.
Best Practices for Business Intelligence Software Adoption
It is critical that upper management and executives are involved in the process of BI adoption. BI software often fails to make the impact expected of it because it is handed off without proper oversight and analysis. BI is a powerful tool, but the greatest impact of BI comes from the insights developed after analyzing the software’s output. When properly addressed, BI can affect both day-to-day and long term business decisions by offering valuable trends and making corrections. Without an actionable plan on how to use the data from BI, some are skeptical about whether they will get a healthy ROI from business intelligence services.
Fortunately, as BI adoption becomes more widespread in multifamily property management, more case studies are emerging showing the successful implementation of BI. Property owners are now able to reference these case studies and show other clients how they can also benefit from the new technology. The cautionary tale teaches us to have realistic expectations and a strategy in place.
“While Business Intelligence can be a powerful solution, it can be challenging to get everyone in an organization to adopt. We see great success when an internal champion can rally their team around the initiative and educate their organization on the significant benefits of BI. Finding a vendor that is a thought leader in the space and brings a consultative and hands-on approach to this change management process is also critical,” Alanis adds.
BI can also be used to supplement new technology that is already widespread in the multifamily industry, such as lead and revenue management tools. In order for BI to create effective predictive analysis, the challenge will be to optimize the front-end acquisition of data, both in terms of its collection and categorization. Tim Reardon, Director of Revenue Management for Bridge Property Management, suggests that “pulling multiple data sources and getting into predictive analytics is where we want to be.” Integrating multiple sources of data can be time consuming and expensive, but BI software is now better able to handle complex data with different models and schema, creating new insights through the integration of data sources.
Using Business Intelligence Software for Marketing
BI can also help inform your marketing strategy by allowing you to quickly ascertain a property’s performance in appealing to its target demographic, as well as assess and leverage historical trends. Using advanced A/B and multivariate testing can also help businesses identify ways to improve messaging, imagery, and calls-to-action for its target audience.
As it stands, BI software has gone through a difficult launch process because of the inherent complexity of the property management industry. The software’s potential to transform the entire management space has not yet been fully realized. Yet, everyday, businesses get one step closer to having the necessary databases available to analyze numerous complex trends and draw beneficial conclusions, which will a positive transition into the future property market.