Early Adopter
LRO brings flexibility and discipline to pricing.
Archstone-Smith has been using a revenue management system for so long, the company doesn’t even think twice about its approach to pricing. The company, the first multifamily firm to make the switch, boldly embraced a data-driven pricing method back in 1999.
The company has no regrets. “The key benefit is we price smarter, we price more often, and we price with more discipline than we ever did before,” says Donald Davidoff, Archstone’s group vice president, pricing and revenue management, who led the team that built LRO. Before LRO, pricing decisions were in the hands of the property manager or their bosses. “They would tell you they were reviewing pricing weekly,” recalls Davidoff. “You were lucky if they reviewed it monthly and if they changed it quarterly.”
Another big plus: the pricing system allows Archstone to offer a wide variety of lease terms since the system calculates appropriate pricing for anywhere between two- and 12-month leases. Before, Archstone was only comfortable offering six-, nine-, and 12-month terms. “We promote our pricing as flexible and fair,” says Davidoff. Of course, renters may pay a premium depending on which lease term they select.
Archstone, which owns LRO, is marketing the system to the multifamily industry, and several companies have jumped on board. Denver-based Simpson Property Group has used the system for more than a year, and several other multifamily companies large and small also are considering Archstone’s LRO product.