Alliance Residential Company Enhances Revenue Management Strategies by Leveraging Rainmaker LRO to Prove Value to Residents
Company realizing positive impact on renewals since combining tactics
ATLANTA, GA – September 21, 2011 - The Rainmaker Group, the leading provider of revenue management and profit optimization solutions to the multifamily and gaming/hospitality industries, today announces the success Alliance Residential Company is experiencing since leveraging Rainmaker LRO™ (Lease Rent Options), not just as a revenue management solution but, as a component to help express value to its residents at the time of renewal.
Since the LRO rollout in January 2011, Alliance, a fully integrated ownership, development and management company serving the multifamily industry across much of the U.S., has been able to increase below-market rates at the time of renewals up to 80-90 percent of the current market rate.
Though there are always a percentage of residents who will move out for a variety of reasons, such as a new job, purchasing a home or moving out of the city, value is the first factor residents consider before renewing. Offering a unified strategy on renewals through the use of LRO, consider new move-in pricing, current rent by the residents, and competitor averages, Alliance is not experiencing major push back from residents because they realize the entire market is shifting and they are still paying prices below what new residents are paying.
“We know we do a very good job advertising our communities and following up with prospects. We pay close attention to supply and demand trends. But revenue management is not a vacuum,” explains Blerim Zeqiri, director of revenue and research for Alliance.
“Understanding not all residents will renew, we are comfortable with that. It allows us to not only bring in new residents at market rate, providing the opportunity for future revenue growth but it enables us to be completely transparent. Our residents benefit from a more transparent process because we explain to them they are appreciated as residents. We are not raising them above what a new resident would be paying and we are considering the value we offer vis-à-vis our competitors,” he continued.
Since moving to LRO’s platform for rate optimization, Alliance is turning its attention to the resident experience and how revenue management strategies positively impact resident satisfaction and perceived value. Customer service and the notion of value continue to escalate in importance as social media enables deeper communications between friends, associates and referrals who are discussing your community, explains Brad Cribbins, senior vice president of operations for Alliance. “When communicating to existing residents about increasing their rent, it is imperative they understand how you got the new rent, how that price compares to the current market, as well as how the value they see in their community all play into making them feel good about their decision to stay. Using LRO data, combined with a high level of service and ensuring a quality community, make it all easier. If the level of customer service, satisfaction and value are not there, then there is a disconnect for the resident.”
“To deliver the greatest level of service and satisfaction, we go through training to make sure our on-site staff is open and transparent about how we got to this price,” continues Zeqiri. “We show the resident how much they are paying, where the market is now, how much a new resident would be paying, and where their new rate falls in comparison. The biggest objection people have to price is if they think they are not getting the value for it. This method of using the data from LRO allows us to show the value.”
“Alliance’s success is a prime example of the impact LRO can have on a company when it is completely integrated into all facets of operations, including leasing processes, renewals and customer service,” said Andrew Rains, executive vice president of sales and marketing for The Rainmaker Group. “The company’s willingness to employ revenue management principles has had a positive impact across the board. We are thrilled they are realizing these improvements and look forward to seeing their future successes.”
Alliance engaged LRO to determine pricing strategies after recognizing missed revenue opportunities due to its sole reliance on internal market analysis and competitive reports from on-site leasing agents. LRO’s pricing system eliminates emotion from the process of pricing to deliver optimal new lease and renewal rents through its advanced mathematical modeling and statistical forecasting methods.
Alliance currently has 12,000 units running LRO and anticipates having a total of 15,000 up and operational by the end of 2011.
About Alliance Residential Company
Phoenix-based Alliance Residential Company (known as Alliance Communities in Texas) is a fully-integrated, multi-family real estate operating company focused on investments, acquisition, construction and management of residential and mixed-use communities in the Western, South Central, South Eastern and now Midwest United States. As the third largest apartment developer in the United States and the ninth largest third party management company in the Western United States, Alliance boasts a $6 billion portfolio spanning 11 states and 21 major metropolitan markets. For more information visit http://www.allresco.com.