If you are interested in learning how some big companies like Netflix, Capital One and Procter & Gamble became formidable competitors by using analytics, I recommend the book “Competing on Analytics” by Tom Davenport and Jeanne Harris. The book came out around 2007, but it is still relevant. In this post I speak to its relevance to real estate analytics.
The ideas in the book don’t just apply to companies that can afford to employ data scientists. Your property management business can also act on the ideas. Even more importantly, reading the book can create a shift in mindset that makes you hone in on opportunities for using data better.
The authors introduce the concept of “analytic competitors“, which are companies that use their analytic capability not just to improve operations but as their lead competitive differentiator. This leads to additional categories, such as marketing analytics and real estate analytics, as well as specialized analytics tools to derive insights.
They define analytics as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions“. I don’t think this is sufficient. Street smarts, common sense are far more important for producing results. But if you combine common sense with analytics as they have defined it, you will find powerful ways to differentiate yourself.
Categories within real estate analytics can include investment analysis, site / geographic analysis, tenant life time value, and maintenance expense prediction.
According to the authors, an analytical competitor uses analytics to outthink and outexecute the competition. Many players in property management are operating with old school methods. Think about how “Moneyball” impacted the “old school” baseball scouts and managers. I believe there is a place for analytics in property management, and the tools available today make it easy to get started. Just like “marketing analytics,” I believe the term “property management analytics” will become established.