Using Revenue Management Software to Optimize Asset Performance
This article is a guest post by Keith Dunkin, Yield Star Vice President of Business Development and Client Services. A version of this article appears in the September issue of Units magazine (page 71).
While revenue management is synonymous with pricing, the most successful operators view revenue management as a platform to optimize asset performance. Since pricing is handled daily with YieldStar software, traditional weekly pricing calls can be replaced with performance discussions facilitated by real-time revenue analytics.
By starting with the end in mind and focusing on current and trended revenue, rent, and occupancy change compared to budget and historical performance levels, operators and asset managers are quickly able to identify areas of opportunity, and in real time. Historically, performance evaluation occurred monthly upon the production of month-end operational and financial reporting packages, limiting the opportunity to proactively address challenges and opportunities. YieldStar facilitates a transition to real-time analytics—leveraged during weekly performance discussions—that focus on exceptions and deliver improved overall results.
Proactive Performance Management
One of the early institutional adopters of revenue management, LaSalle Investments, has moved to proactive performance management through their revenue management platform. Stephen P. Adams, Managing Director for LaSalle’s multifamily fund, explains how revenue management has been a game changer for them.
“We used to conduct monthly performance reviews,” explained Mr. Adams, “which was really driving with the rear view mirror. Now through analytics within YieldStar, we have real-time visibility into revenue performance and its drivers. The platform facilitates productive, timely discussion with our operating partners, and allows us to capitalize quickly on opportunities and address problems before they can grow.”
Revenue Management Isn’t Just About Pricing Units
Revenue management software is about a lot more than just price. Advanced users of revenue management leverage the data from their system to uncover performance drivers that have nothing to do with pricing – organizational effectiveness, product quality, and marketing strategy to name a few.
With over 70,000 units across their YieldStar software platform, Greystar has blended the analytics from the system with other key operational and financial metrics to ensure a 360 degree view of performance. Like many of our more seasoned clients, Greystar’s goal is to create visibility around the key elements that impact asset value and investment returns.
“YieldStar does more than ensure we have the optimal price,” shared Greystar CIO Tom Bumpass. “It raises our overall Revenue IQ. Our teams are empowered with a much higher level of insight, which allows them to drive performance in a way that isn’t available without revenue management.”
Your Future with Revenue Management Looks Bright
“Real-time analytics to drive improved asset performance is the trend with revenue management leaders today,” explained Janine Steiner Jovanovic, Executive Vice President of Asset Optimization Solutions for RealPage. “The near future holds even more opportunity to improve results with revenue management software through enhanced benchmarking. Investors want the best risk adjusted returns, and multifamily is leading the pack. More reliable investment decisions will be enabled through unparalleled insight into how assets are performing relative to the markets in which they compete.”