#BEATTHEBENCHMARK starts in...
What is #BeatTheBenchmark?
#BeatTheBenchmark is a one-of-a-kind game coming to NARPM National this October!
The industry benchmarks for each of the below metrics (along with dozens of others) have been identified in the not-yet-released 2022 NARPM Benchmarks. These newly determined benchmarks will be released live at NARPM National Convention in Las Vegas on Thursday, October 21 … but from the open of the vendor hall on Tuesday until it closes Wednesday YOU can wager your guesses on what the new benchmarks will be at the 13 Metric Sponsor booths (and pick up as many more wager chips as you can at the Chip Sponsor booths), with a chance to win prizes worth over $500 from each Metric Sponsor, with a GRAND PRIZE of $3,000 CASH!
How do you play #BeatTheBenchmark?
All game play will take place onsite at the NARPM National Convention.
Are those 2 Wager Chips all you get? NOPE! You can keep earning Wager Chips by:
- Visiting any of the Metric Sponsor OR Wager Chip Sponsor booths in the hall and telling them, “I want to #BeatTheBenchmark!” Each vendor will have a unique process for giving you more chips – it’s the game within the game!
- Make an online donation to the NARPM charity of choice, Make-A-Wish! For each $25 donation, you will receive one additional wager chip (to be picked up when you present your donation receipt at the ProfitCoach booth). NOTE: This will ONLY apply to donations made and validated during the run of the game on October 18 and 19, 2022.
Yes! There will be hundreds of spaces available on each Wager Pillar, and you can make as many guesses as you have Wager Chips! Just remember, once a space is claimed, it’s gone, so make your best guesses early!
More about the metrics
What it means:
Unit Acquisition Cost (UAC)
What it means: Unit Acquisition Cost establishes the total cost associated with acquiring a new unit, including sales and marketing labor expenses (for example, a Business Development Manager).
Why it matters: Unit Acquisition Cost demonstrates the efficiency of your sales and marketing efforts as a whole. It reflects the efficiency of your marketing campaigns (cost per lead) and sales labor (close rate). Ideally, UAC should be tracked for each lead source and should be closely monitored as you increase your investments in portfolio growth. UAC has a direct impact on Unit Lifetime Profit (ULTP) and should never exceed Unit Lifetime Profit before UAC (ULTP before UAC).
How to calculate: We calculate Unit Acquisition Cost by dividing the sum of one month’s New Owner Advertising and PM Sales & Marketing Labor by the number of units added during that month
Profit Per Unit (PPU)
What it means: Profit Per Unit establishes the average profit contribution of each unit in your portfolio each month.
Why it matters: Profit Per Unit looks at operating profit on a per-unit basis and speaks directly to the strength of your financial model. It helps you understand the implications of modifying your cost and revenue structure by making dollar comparisons on a per-unit basis. For example, for a portfolio with 200 units operating at a revenue per unit of $150 and profit per unit of $15, increasing your cost structure by $10 per unit ($24,000 annually) lowers profitability by 66%. Conversely, adding $10 in revenue per unit (assuming no offsetting expenses) would increase profitability by 66%. Furthermore, understanding your average PPU and RPU will help you establish a financial threshold to determine which new units are worth adding to your portfolio.
How to calculate: We calculate PPU by dividing one month’s Residential PM Profit by the same month’s ending units.
Global Talent Utilization
What it is: Global talent utilization measures total global team members as a % of total direct labor team members for the top 25% of most profitable PM companies.
Why it matters: Global talent utilization has proven to be one of the most effective ways to impact Direct Labor Efficiency, and ultimately profitability. This metric is important because it provides a NEW helpful rule of thumb for understanding the portion of a property management team that should ideally be staffed globally.
Maintenance Coordination Efficiency
What it is:
Other Tenant Paid Fees/Unit
What it is: A subset of Revenue Per Unit, Other Tenant Paid Fees/Unit measures monthly revenue per unit derived from tenant paid fees (not including Application fees).
Why it matters: Creating win/win value propositions for tenants has proven to be an important means of driving profitability for property management companies. Other Tenant Paid Fees/Unit provides a helpful target for understanding the revenue potential from tenant paid fees.
What it means: Unit churn establishes the percentage of units which have exited your portfolio within a given time period. So a 2% monthly unit churn rate means that 2% of the units in your portfolio at the beginning of the month leave your business each month.
Why it matters: Unit churn has a direct impact on Unit Lifetime Revenue (ULTR). For example, cutting your churn rate in half (and thereby approximately doubling your ULTR) will have a disproportionate impact on Unit Lifetime Profit (ULTP) because of the initial acquisition and service cost associated with each new unit. Unit churn is a key factor in any recurring revenue business model and it is typically driven by customer satisfaction and movement in the real estate sales market. Segmenting your churn into good, neutral, and bad (see below) provides insight into the specific factors driving your churn.
How to calculate: We calculate Unit Churn by dividing the number of units churned in one month by the same month’s beginning units. Note: “Churned Units” is different than Lost Units and refers specifically to the units that were present in your portfolio at the beginning of a given time period and were subsequently lost during that time period. “Lost Units” refers to any units lost during a given time period, regardless of whether those specific units were present in the portfolio at the beginning of that time period. See definitions below.
Lifetime Value (LTV)
What it is:
Revenue Per Unit (RPU)
What it means:
Direct Labor Efficiency Ratio (DLER)
What it is:
Total Labor Efficiency
What it means:
Leasing Labor Efficiency (Segmented DLER Metric)
What it is:
Ancillary Revenue Per Unit
What it is: A subset of Revenue Per Unit, Ancillary Revenue Per Unit measures monthly revenue per unit derived from all fees outside of the base monthly management fee.
Why it matters: While there are a variety of successful approaches to pricing, perhaps the most successful approach is an “unbundled” approach in which a large portion of revenue is derived from fees beyond the base management fee. Ancillary Revenue Per Unit provides a helpful target for understanding the revenue potential from ancillary fees beyond the base management fee.
Coming to NARPM National this October:
The PM Game you can't miss
Want to play? Sign up for the latest rules and insider tips. Let’s #BeatTheBenchmark!