Carmel Partners Selects Rainmaker revolution LROTM Revenue Optimization Solution

LRO delivers 3.55% lift in revenue billed per unit in 8 community pilot test

• 
  SAVE
• 
  SHARE
• 
  TEXT SIZE
• 
  PRINT
• 
  COMMENT
• 
  PDF

. October 14, 2008

ATLANTA, GA, September 29, 2008. The Rainmaker Group, the world leader in automated revenue management software and services to the gaming hospitality and multifamily housing industries for total property profitability, announced that Carmel Partners with over 19,000 units will implement the revolutionLRO multifamily housing revenue optimization solution after a successful 12-month pilot test in eight communities.

The communities that used LRO in the pilot realized a 3.55% increase in revenue billed per unit (RBPU) over non-LRO Carmel Partners communities in the same markets with similar occupancy and exposure.

"LRO creates a centralized pricing discipline that improves revenue," said Don Campbell, Carmel's Managing Partner and Chief Operating Officer. "It is consistent with our philosophy to standardize and centralize as many processes as possible. This allows our community teams to focus on what they do best which means providing top customer service and maximizing the operating potential of our apartment communities."

Carmel Partners conducted the pilot from June 2007 to July 2008 at:

o Six communities in the Denver region with a total of 2,166 units

o Two California communities with a total of 414 units

Carmel will roll out LRO across 57 communities totaling nearly 14,500 units in late 2008.

Spillover benefits to non-LRO communities

"Maximizing revenue per unit is essential to operating success and it was the most objective measurement of LRO's benefits during the pilot program," said Campbell. "The increase in revenues on the test properties was the primary benefit but we also noted a spillover effect with the non-LRO communities as the residential services team began to adopt the LRO pricing mindset. This really proves to us how important a disciplined pricing process is to our organization. LRO provides the tool that is required for this process."

LRO's pricing methodology enables rapid development of rate optimized pricing models, taking into account such factors as:

o Availability

o Seasonality

o Renewal rents

o Renewal pace

Objective, conclusive testing uses operator's own data

While some software providers measure pilot test results against their own data, Rainmaker and Carmel Partners agreed to compare only data from Carmel Partners during the pilot test. "We decided that comparing the revenue changes at the LRO properties against the non-LRO control properties was the most objective way to measure the effectiveness of the LRO program. The data we used came from our own system. There were no third parties involved and our results were objective and conclusive," said Campbell.

According to Campbell, Carmel Partners selected LRO because it was a more fully evolved product used by many respected multifamily operators, and also because it provided a two-way interface with Carmel Partners' MRI property management and accounting systems.

The pilot verified the effectiveness of LRO and also helped Carmel Partners establish how to get the best results from the system. "LRO is not a black box that extracts information from your database and automatically comes up with pricing," said Campbell. "It is a tool that requires regional and community managers to establish a revenue-focused dialogue about their markets and goals. Throughout the pilot we established ways to improve the quality of information entering the system which enabled LRO to produce the most profitable results for us."