Analytics in property management: the winner's strategy
Some thoughts about Catan, analytics and property management
I have very competitive friends in games who often avoid playing Catan with me, a popular strategy game, in which I've become an expert. What can I say, sometimes overthinking and overanalyzing have their advantages for finding the perfect opportunity on the go. Just kidding, let's get serious.
To make any strategy work, whether it's for a real estate buying and selling company or a game of Risk, there are three fundamental steps: designing it, executing it, and analyzing the results. The latter of these tasks is often the most challenging to define, and it's not surprising because it's the one that will help us improve our outcomes in the next round.
If you're reading this to win a board game, I suggest you take the risk ― the worst that can happen is that you'll have a good laugh after a spectacular defeat. But if you're seeking advice for something much more serious, like how to maximize your investment in your property management business, consider the following.
Of course, knowing the current market prices of homes and whether supply and demand are balanced is a given ― if you didn't know this, I doubt you could set up a business in this sector. Beyond that, I advise you to focus on the following metrics:
Your customer profiles: Yes, I'm talking about the buyer persona, but not just their age, marital status, or profession, but what motivates them to buy or sell a home right now, why they can't or won't do it on their own, what tools they're looking for, and what you can offer them... Understand their pain points. Keeping a close eye on their feedback can be very helpful, collecting what they liked or didn't like with a Net Promoter Score (NPS).
Your sales strategies: What do the homes you've sold in a given period of time have in common? Have you applied any specific marketing strategies to those? What is the average time it takes to sell a house or find a buyer? Days on Market (DOM) is a widely used metric in this sector. Analyze the times and tactics used that have helped you reduce it. You know, time is money.
Benchmark against the competition: What is your market share, and what is your competitor's? What prices do they offer for similar properties? What else do you know about their business model, and how do you differentiate or resemble them? Maybe that will give you an idea of how to refine your positioning or find other sources of income. Remember that competition in emerging sectors is not bad news; it means there's potential.
Dive deep into your marketing plan: Where do your potential customers come from, and which ones eventually convert? Were the homeowners who found you through social media not really interested in you? Is there something you can change to meet their needs? Identify bottlenecks and areas for improvement.
Have cost clarity: The finance team should monitor the costs of each part of the customer funnel and when the investment is worthwhile. This is the only way to prioritize and refine the process, see where we need to invest more, and which costs need to be reduced or cut altogether.
Analyzing these metrics and data can help you make data-driven decisions, optimize your marketing and pricing strategies, enhance customer satisfaction, and ultimately improve your business's bottom line in the real estate sector.
However, this advice will only be of use if you know how to obtain the information or what to do with it. Of course, you'll need data collection tools, where you can cross-reference all the information you need, such as a powerful CRM, and professional Excel skills. I also advise setting up periodic analyses and making an effort to maintain internal communication, for example, with bi-monthly meetings. And before making strategic decisions and implementing changes based on fantastic ideas, remember to return to those analyses to ensure they make sense.