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Mark B. Juleen, Vice President, Director of Marketing & Training, J. C. Hart Company, presents a case study on the benefits of using revenue management system in a declining market. Revenue management systems automate the discipline of rental unit pricing and take the emotion out of pricing and presenting offers. Yet multifamily adoption of revenue management happened as markets recovered and rents were moving upward for everybody. Does revenue management work in a downward-trending market? Mark presents a case study examining whether revenue management adds the same value in a declining market like the one we’re currently experiencing.
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Revenue Management in a Declining Market
Revenue Management in a Declining Market
Mark Juleen, V.P., Director of Marketing
J.C. Hart Company
May 1, 2009
Mark Juleen, V.P., Director of Marketing
J.C. Hart Company
May 1, 2009
Excellence Since 1976 2,500 Units currently 1,000 Units under
construction or in development
Best place to work “We make your Home an
enjoyable living experience.”
Excellence Since 1976 2,500 Units currently 1,000 Units under
construction or in development
Best place to work “We make your Home an
enjoyable living experience.”
75% of Management Companies Have Less than 3000 Units75% of Management Companies Have Less than 3000 Units
Indianapolis, Dayton, Bloomington
www.homeisjchart.com
Fleishman-Hilliard International Communications
Simplify.Simplify.
Why Revenue Management for Us?Why Revenue Management for Us?
Working Smarter, Not HarderWorking Smarter, Not Harder
Easier Pricing Decisions Eliminate words that begin with “C” and end
in “oncessions” Flexible Lease Terms Market surveys unnecessary Manages lease expirations Improves the leasing process
Easier Pricing Decisions Eliminate words that begin with “C” and end
in “oncessions” Flexible Lease Terms Market surveys unnecessary Manages lease expirations Improves the leasing process
Quotes from the front line:Quotes from the front line:
“Helps minimize vacancy. You would be surprised how easily people will adjust their move in date or lease term to save a few dollars. Crazy what kind of information you can find out if you just ask questions.”
“Helps minimize vacancy. You would be surprised how easily people will adjust their move in date or lease term to save a few dollars. Crazy what kind of information you can find out if you just ask questions.”
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Quotes from the front line:Quotes from the front line:
“Gives us more opportunity to follow up – 48 hours? Your quote is expiring. Three days later? Our prices went down/up/stayed the same, etc. Not just the same “checking to see how your apartment search is going” call.”
“Gives us more opportunity to follow up – 48 hours? Your quote is expiring. Three days later? Our prices went down/up/stayed the same, etc. Not just the same “checking to see how your apartment search is going” call.”
Quotes from the front line:Quotes from the front line:
“Minimizes the prospects chances of saying no. Your price depends on YOU and YOUR needs – want it for 750? Move in this date and on this lease term…”
“Minimizes the prospects chances of saying no. Your price depends on YOU and YOUR needs – want it for 750? Move in this date and on this lease term…”
Choices, Choices, Choices …Choices, Choices, Choices …
Quotes from the front line:Quotes from the front line: “I get the impression that most prospects are
actually impressed that we can give them options. They feel like we are keeping their interest in mind.”
“I get the impression that most prospects are actually impressed that we can give them options. They feel like we are keeping their interest in mind.”
Quotes from the front line:Quotes from the front line: “Not always the most responsive to the market and
the climate. Yes, they SAY they do monthly market surveys, but we certainly didn’t see adjustment accordingly during December and January when everyone was freaking out about the economy and our comps were giving away their first born children.”
“Not always the most responsive to the market and the climate. Yes, they SAY they do monthly market surveys, but we certainly didn’t see adjustment accordingly during December and January when everyone was freaking out about the economy and our comps were giving away their first born children.”
Quotes from the front line:Quotes from the front line:
“Depending on how you set your renewals, your rents on the renewal side could out pace your new leasing. This can be a resident satisfaction issue, especially if the gap between new and renewals becomes significant.”
“Depending on how you set your renewals, your rents on the renewal side could out pace your new leasing. This can be a resident satisfaction issue, especially if the gap between new and renewals becomes significant.”
Quotes from the front line:Quotes from the front line: “In a down economy you have to make a tough
decision on the renewal side to potentially lower rates to be more in line with the new. If you have online availability features this can create issues with current resident's comparing their renewal quote to a new rate.”
“In a down economy you have to make a tough decision on the renewal side to potentially lower rates to be more in line with the new. If you have online availability features this can create issues with current resident's comparing their renewal quote to a new rate.”
All that is great, but it is a numbers game too …All that is great, but it is a numbers game too …
Rents – performance to market up 0.9% Q2 to Q4
So why Revenue Management in a Declining Market? So why Revenue Management in a Declining Market?
1. Simplify your processes. Work Smarter, Not
Harder 2. Flexible lease terms &
flexible pricing 3. Trust the algorithm and
professional market survey, not a bogus market survey and your gut.
4. Bounce back faster
1. Simplify your processes. Work Smarter, Not
Harder 2. Flexible lease terms &
flexible pricing 3. Trust the algorithm and
professional market survey, not a bogus market survey and your gut.
4. Bounce back faster
Let’s share some ideas!Let’s share some ideas!
Text mbj to 50500
www.theapartmentnerd.com
linkedin.com/in/mjuleen
mbj
