A 3-Part Series:
- Build a Foundation for Leverage
- Understand your PMS data connectivity – Control, Position and Leverage your Data
- Deploy Leverage your data using best technologies and tools
Recent use of the word “leverage” is both ubiquitous and ambiguous. This is likely due to its application to a multitude of markets and circumstances. For example:
Dictionary.com Definition – General
- the action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by a force applied at a third
- the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one’s investment, to control a much larger investment, or to reduce one’s own liability for any loss.
The use of existing data and data delivery systems to “repackage” and “resell” information. The greatest effect is achieved with a model that repeats indefinitely
Fortunately for Property Manager’s, the application of leverage is just as ubiquitous as the use of the word. Examples of the use of leverage in the vacation rental market are many and you are probably using some of them now. The most obvious example is a website that uses your data to generate online bookings or generate leads. VRBO.com and Homeaway.com are excellent examples. From a scalability standpoint, these resources have very little “investment” in your data – most often you pay them! –They are able to “repackage” and “resell” your data over and over again – Leverage! Can you think of other companies and products that use this technique with your data?
There are many other products that do this same thing and more popping up all the time. Attend one of the big tradeshows this fall and you are sure to see some brand new products that have found a cool way to use your data to a mutual benefit. All of this is classic in the sense that companies are finding new ways in new markets to leverage the same data. What IS surprising is how many Property Managers do not use this technique to their advantage.
I recently had reason to travel to a small town in my home state of Colorado. Of course I went online to find a home to rent. I found a property management company that had some great units and I found one that I wanted to book. To my dismay, there was no way to book the unit online and it took a full four days to finalize the booking! I later found out that this company did allow online bookings on other websites. This situation brought to light many problems with this PM’s approach to inventory management but for the purpose of this article, they were definitely not using the concept of data leverage!
As with most things in life you want to lay the groundwork or foundation on which to build. Leverage is no different. The concept and example above brings us to the most basic (and first) starting point to start taking advantage of these principals – your own website!
Most PM’s know they need an online presence and their own website. Why? Your own website is the lowest cost distribution channel you will ever have, period! You should always attempt to drive as many online bookings through your own website as possible. This is where you have commission-free and fee-free bookings with the highest margins of profit. Yes, I have heard the argument that “some people only use VRBO”. That is great and a great reason why you should also have VRBO listings to help generate additional leads. I often counter with, “some people use VRBO to initiate their research but then look for the same unit on a local level”, or “sure, but not EVERYBODY only uses VRBO, what about all the others”? Since this is the first part of a series and the main topic is leverage, we will not delve too deeply into maximizing your own website’s effectiveness.
Here are a few of the most important things that should be considered minimums:
- Great Design – make sure your website is professionally designed. Does it look as good as or better than the listing sites that your guests are using to initiate their research?
- Marketing – Spend some money on marketing. SEO, SEM, PPC, Email, Local etc… If you don’t lay a marketing foundation on which you can build, you will be too reliant on listing services that do spend the money
- Software Tools – Use a professional and cost-effective technology to connect your property management software data to your website. There are only a few good systems in existence so it is critical you do your homework
- Ease of booking – this goes hand-in-hand with your connectivity. Good, accurate data combined with a fast and intuitive booking process will generate more bookings and revenue
Leverage is a great technique to use in any endeavor. Whether you are trying to get a boulder over the crest of a hill, trade the stock market or maximize your vacation rental data, leverage can help you succeed. As you are now well aware, an entire technology market in the Vacation Rental industry has recently emerged. There are many companies leveraging your data for you (and them) and many more will be popping up in the future. If entire businesses can exist and profit on the use of your data than you should also give the concept the attention that it deserves.
The next installment of this series will cover Property Management Software connectivity options, costs and opportunities.