Why your market survey program is failing (Hint: it’s not your staff)
September 28, 2023
Albert Einstein famously wrote “Information is not knowledge”. Though he never had to do a market survey, the value of knowledge was uncovered long ago.
Market Surveys are the vehicle to the knowledge leasing professionals need and rely on. It’s not clear where this ancient art began but we do know that the process has haunted generations of leasing professionals. It’s complicated, it’s messy and if you had to do one, you know it’s about as fun as a root canal. Smart performs thousands of market surveys regularly. We want to share both common pitfalls and lessons learned in hopes that it can make lives easier for our friends in the industry.
Your data may be unreliable, incomplete or both.
Would it surprise you to learn that over 70% of the communities are obtaining information on competitors using Regan-era cold calling? This begs the question: how willing to help would you be if a competitor calls asking for your latest pricing and promotions? It’s no surprise that leasing staff often relay misinformation to competitors just the same way they receive it. This may not even be a case of blatant lying but rather accidently omitting specials or communicating concessions that are no longer. Few have the time and patience necessary to make these time intensive, tedious calls. It’s a mess and everyone knows is. We often hear our customers say “well… most of the time the information we’re getting seems alight”. And they’re probably right. Well, probably. What we find is that even when the information seems correct it is rarely complete. That’s because countless variables must be taken into consideration, such as
- Every combination of every special, including floorplan-specific concessions
- Time of the month and even day of the week the information is gathered.
- Ensuring data is fresh, no more than a day or two old.
- Accurate and accurate accounting of unavailable units yet been priced.
Accurate, reliable and consistent information is the foundation on which you will base your revenue and pricing strategies. We recommend engaging an unbiased third party to gather this data for you but be sure to insist they log their sources, conduct regular audits, and be willing and able to share these to you. More to that, a good partner will know the best time to get information and exactly right person to contact in order to get it.
Your presentation may need sharpening.
Let’s assume we just surveyed all our competitors and were lucky enough to have received impeccable data that is both highly accurate and completely reliable. Just go with it, please. All that’s left is manipulate a few spreadsheets, ensure the macros and formulas are working correctly, manually refresh all the graphs and let’s not forget the beloved printer-friendly formatting our cohort demand. This is precisely the reason why most reports are crude and confusing. Invest in a clear and attractive presentation that your team will understand and appreciate. Sure, this will definitely require significant efforts but that’s what makes a market survey a powerful tool rather than a painful liability.
Next we need to consider graphs, charts and other visuals that are necessary to create this ensemble. One such visual should show your competing floor plans. For example, if your community has a 1/1, 765 sqft you might want to consider this graph.
On surface, this might appear like a simple bar graph. A closer looks, however, reveals that our calculations need to account for unit mixes, floorplan-by-floorplan concessions, property wide specials, unavailable units, weighted averages and we haven’t even done any visual manipulations! We still have to synthesize the raw data into a simple, easy to understand bar graph. While comparison graphs are key to getting quality knowledge, they also demand hours of tedious data processing and manipulations. As W. Somerset put it ‘it is a nuisance that knowledge can only be acquired by hard work’. Heed his words and invest in quality visuals backed by solid data – you’ll be rewarded immensely. A good analytics piece can guide you towards capitalizing on inventory shortages, avoiding pricing pitfalls and maximizing revenue in ways mere raw numbers could never do. . For Smart, this has been a decade long learning process with thousands of properties taking part of what seemed like a grand scientific exercise of trial and error. We’ve learned that the right mix of neighborhood to property level data differs by customer. That visuals necessary for an income restricted property is quite different than for a student housing community. This means careful consideration of comparable square footages, amenities, property classification, and of course what’s available and what isn’t. The good news is that you only need to get this right for one property – yours. Be ready to try and fail because eventually you’ll hit the right balance and learn much in the process.
You may be overlooking key historical facts.
There are 100 things happening right now that you’re probably already looking at. Whether it’s over-saturations, lease ups or rent fluctuating around you, it’s easy to see why we hardly have time to look in the rear view mirror and account for yet another variable: historical information. As it turns out, historical analysis is one of the most powerful, yet least utilized tools in your arsenal. When used correctly, historical graphs can shed tremendous insight on where that bus you’re on is headed, how quickly it may get there and most importantly, whether you’re going to like the final destination.Customers often share with us incredible success stories that began when they started incorporating historical information into their analysis. For instance, how to be strong during the weaker leasing seasons, the ideal times to make strategic rent adjustments and even anticipate the moves of their counterparts. High school was right; history really is important. In the next article we are going to explore this area in more vivid detail but for now, just keep in mind that recording and tracking historical data is absolutely essential.
Your timing may be off.
In most cases communities will conduct a market survey every four weeks. This means at least a month will pass without any competitor visibility – effectively flying blind. But is it really necessary to conduct a full survey more frequently? In our experience a more effective approach is to conduct “mini-surveys” intended to capture only significant changes that you ought to know about. This eliminates the need for your team to review yet another market survey but still empowers everyone with the knowledge and ability to react to market changes. Smart auto-delivers one-page update sheets whenever important changes happen. Timing is everything so don’t skip out on this vital component. Last word on strategy. Rome wasn’t built in a day and your market survey program probably won’t either. Focus on one thing at a time and build from there. You can get a free sample report from us to serve as a reference point for best practices.
In the next blog posts we delve deeper to discuss specific actions they can take to remedy those mistakes.
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