In the property management world, data has emerged as a powerful tool for driving success. The ability to collect, analyze, and use data effectively can provide property managers with valuable insights, inform decision-making, and ultimately improve operational efficiency. Entrata President Chase Harrington had explored the topic with the company’s new VP of Product and Data Management, Cody Smith in a 2023 Entrata Summit session, Unleashing the Power of your Data with Entrata. They explored the nuances of data and its role in the industry within the framework of the stages of data maturity, showing how property managers can leverage data to optimize their operations.

The Significance of Data

Data has become a buzzword in the industry for good reason. It holds the key to understanding and addressing the challenges faced by property managers. However, it is important to approach data strategically and with a clear understanding of its purpose. Simply collecting more data does not necessarily lead to better outcomes. Property managers need to define the problems they want to solve and ensure that the data they collect is relevant to those problems.

“Data is really analogous to storytelling,” explained Smith. “It's the real-time story of your business.” Data can reveal the story of a property, highlighting areas of strength and weakness, and guiding strategies for improvement. But it’s crucial to approach data with a neutral lens, ensuring that it is not manipulated to fit preconceived narratives.

The Data Maturity Curve

Harrington encouraged attendees to examine the stages of the natural data maturity curve and determine where their business, or segments of their business fall. This curve represents the different stages of data utilization, from basic data collection to advanced analytics and optimization. Knowing where you stand is essential for identifying next steps.

Stage 1: Just Starting Out

At this stage, property managers are beginning to recognize the value of data but may not have a structured approach to collecting and tracking it. Data exists, but it is not aggregated or effectively utilized. The focus is on getting started and identifying the questions that need to be answered.

Stage 2: Underdeveloped

In the underdeveloped stage, property managers have access to data but lack the tools and processes to fully leverage it. Data is often siloed, and insights are based on tribal knowledge rather than a centralized, data-driven approach. The goal at this stage is to start integrating data and developing a deeper understanding of the business. Property managers may begin to analyze leasing data, maintenance data, and financial data to identify areas of improvement and inform decision-making.

Stage 3: Reactive

The reactive stage is characterized by a historical, research-oriented approach to data analysis. Property managers look back at past performance to analyze historical leasing data to understand occupancy rates, revenue trends, and customer satisfaction levels. While this stage provides valuable insights, it lacks real-time data integration and proactive decision-making.

Stage 4: Proactive

In the proactive stage, data becomes a competitive advantage. Property managers are empowered to make data-driven decisions that determine business outcomes. Insights gained from data analysis inform business strategies and drive operational efficiency.

Stage 5: Optimized

The optimized stage represents the pinnacle of data maturity. Property managers have fully integrated data into their decision-making processes and leverage advanced analytics and predictive modeling. Data is infused throughout the organization. Property managers can uncover hidden patterns, predict future trends, and optimize operations for maximum efficiency and profitability.

Harnessing the Power of Data

When confronted with rows and rows of data on a spreadsheet, it’s easy to feel overwhelmed or intimidated. “As you figure out where you are on the data curve, just start with the first question,” Smith advised. Start by identifying the key challenges and goals of your property management business. Use the questions you want to answer to identify what insights you need.

Then you can begin collecting and centralizing relevant data, leveraging technology solutions like Entrata BI to make it easily accessible and actionable. As you answer your first question, it informs additional questions, helping you to create a focused business strategy.

“Are you worried about occupancy? Revenue? Vacancy loss?” Harrington asked, “The problem you’re trying to solve, the questions you’re answering will determine your journey through the curve. You’ll notice that as you progress, you have more information, and you begin to solve problems much quicker.”

Multifamily operators can take advantage of business intelligence tools, whether part of Entrata’s BI offering or via data share with BI platforms, to provide answers to fundamental questions out of the box, visualize data so trends are more easily identified, and open up the opportunities of more nuanced insights from external data sets.

“This is where it starts getting really fun,” said Harrington. “There’s so much we can do. We started looking at renewals—aggregating the data—and we’re able to predict on the day of move-in with 90% accuracy whether or not they will renew. Just think what you can do with that information!”