Company
A leading homebuilder in the US with presence in multiple markets, focused on quality construction, customer satisfaction, and strategic growth.
Annual Revenue Range:
>$1B
Industry:
Real Estate
Locations:
USA
Deployed Solution(s):
Vistaar SmartPricing
Business Challenges
• Fluctuations in material costs, labor expenses, and land acquisition costs can significantly impact profit margins, while intense competition compels companies to offer attractive prices while trying to maintain their profitability in a highly capital-intensive business.
• Understanding local demographics, buyer preferences, and supply-demand dynamics pose themselves as additional challenges. Macroeconomic factors like inflation and interest rates further complicate the equation, affecting buyer purchasing power.
• Manual steps involved in the price entry process led to delays in execution, creating a competitive disadvantage for the company. This resulted in missed opportunities and negative impact on their market share, revenue and margin aspirations.
• The Company needed robust pricing technology that could ingest and analyze a comprehensive and diverse set of data inputs to objectively develop effective strategies that can balance profitability with market competitiveness and home buyers’ affordability.
Vistaar Solution Highlights
• Contextual analytics to review price and margin levels for comparable homes within the business or across competitive listings for similar models.
• Geo spatial visibility into the location of communities and lots using Google Maps APIs (or similar services), enhanced with contextual analytics showing Days-to-Completion, Days-on-Market, Price/Incentive/GM% levels, etc.
• Manage control of home supply by ‘releasing homes for sale’ powered by a best-practices driven approval workflow to manage Base Prices, Lot Premiums, and Incentives with specific effective dates.
• Targeted objective-driven price guidance for Net Price and Incentive levels based on a variety of internal and external factors along with the likelihood of selling a specific home within predefined time periods, such as 1, 2, 3 or 6 months.
• Price Waterfall Analysis to view the true Base Price to Contribution Margin walk including all price and incentive components, cost components, bonuses, commissions, and post-closure costs (like marketing fees, deferred compensation costs, etc.).
• Seamless real-time integration with ERP for the execution of approved Base Prices, Lot Premiums, Pricing and Sales incentives.
Sources of value
The broad objectives of their pricing journey were to bring together a diverse set of data inputs required for better pricing decisions and institutionalize a workflow-based price exception approval process with laid-out thresholds that can be managed as required.
Vistaar’s SmartPricing solution allowed them to standardize pricing processes across regions, markets, and business units with a focus on improving sales-pace-focused pricing outcomes, creating efficiency gains, and forming a value-based pricing process. It empowered users to embrace scalable pricing methodologies, standardize communications and workflows and automate price publishing to online sales channels, while maintaining meticulous oversight through comprehensive audit and tracking capabilities.
Furthermore, Vistaar’s best practices and contextual analytics framework embedded within the price management process enabled a culture of nimble, data-driven price actions, that ultimately resulted in a competitive advantage for the company in the ever evolving housing market.
