In my time watching PRM mature from an early start-up stage to widespread acceptance, I’ve seen many models of PRM support evolve. Broadly, I put them into two camps: those whose pricing managers behave as if they own the communities and those who serve in a more subordinate role to owners or operators.
In the case of the former, PRM and property management are co-equals and collaborate as such in executing a strategy. Of course, being co-equal has its challenges, the most obvious of which is coming to a decision when both parties authentically disagree; if they’re co-equal, then who casts the metaphorical deciding vote?
The latter puts PRM squarely into a support role. The pricing manager can conduct analysis and provide recommendations, but ownership or operations ultimately calls the shots. PRM success in this model often depends on their ability to influence their masters with nudges and their persuasive skills.
Why the “Ownership” Mentality Wins
Based on my experience, I reside squarely in the “PRM should manage their properties as if they own them” camp. I think there are three key reasons this works better:
How to Manage the PRM - Operations Relationship
As for the challenge of managing a co-equal relationship, I have been very successful in the past, relying on two things:
Ensure that there is a constant state of constructive tension between pricing and property management. Show me a situation with no tension, and I’ll show you a situation where either pricing has either “gone native” (i.e., is now following along rather than adding value), or property management feels that pricing is pushed down their throat and they’ve abandoned giving their own opinions. Maintaining tension is easy; keeping it constructive is where leadership and team emotional intelligence become critical.
Create a safe environment for escalation. The notion that either the pricing manager or the property manager must own the deciding vote is a false choice. If they authentically don’t agree, they can choose to escalate up to the next level in the organization. After an escalation or two, the decision will end up with an executive who is responsible for balancing the two needs, and both parties can easily live with her decision. If many decisions are being escalated, we have an issue. However, my experience is that there are rarely more than one or two a quarter. Knowing that escalation is OK saves us from the challenge that one side ends up dominating the other.
So take a moment and ask yourself two questions: 1) Do I want my pricing managers to behave like they own their properties and 2) if so, are they acting that way? If you don’t like the answer, do something about it!