As a person with a 2.5-cup-per-day coffee problem habit consumption pattern, I tend to watch for opportunities to get a free caffeine fix. Thanks to participation in a certain Seattle-based company’s loyalty program, these chances come around fairly frequently. For this I am grateful.

But a few months ago I fell victim to a dreadful first-world problem: one of my hard-earned “free” drinks expired. EXPIRED. Gone forever. Somehow I failed to use it during the allotted time period (which is criminally short—but that’s a subject for another post). Clearly I’m not over this yet.

Loyalty programs are everywhere in the consumer marketplace. They can alternately enrapture customers (remember my Savannah experience? I do!) or entrap them (I haven’t cheated on my grocery store chain in years). Either way, having access to a perk without actually taking advantage of it is the worst.

How does this relate to CRE?

More than you might expect. We recently surveyed over 200 of our property management clients and found that 30 percent of them offer some form of loyalty program to tenants in their buildings.

The “red carpet treatment” makes anyone feel special.

For the most part, they told us that these programs consisted of discounted onsite retail services (35 percent), discounted merchandise at onsite stores (27 percent), or exclusive access to special events (another 27 percent).

Having once worked in a building with such a program, I well remember using those $1-off sandwich coupons and getting a heads up on the farmer’s market in the courtyard. Looking back on it, I really appreciate that someone on the building staff dropped of a perforated coupon card at every tenant suite, every single month. And not only that, but the office manager walked around to every single desk to make sure we all had our cards.

That’s a real effort that not everyone is willing to take.

Tenant Relationship Management Benchmark Survey

In our survey, 29 percent of property managers told us they promote their loyalty program by distributing physical flyers and coupons in this way. Twice as many (58 percent) handle the process electronically, by emailing materials to their single points of contact (SPOCs), relying on them to pass information along to the employees in their respective suites.

And that brings us back to the problem of unused rewards. What if a tenant SPOC is out for the day, gets buried with work, or otherwise simply fails to distribute promotional materials (whether physical or digital)? The employees miss out. In the best cases, they go about their merry lives, blissfully unaware of their VIP status. If they do find out, they won’t be happy.

One property manager I spoke with recently told me that he got an earful from tenants who came into the lobby one morning carrying their bagels and coffee—only to realize immediately that the building was handing out free doughnuts! The communication failure happened in their own suite, not in the building management office. But that didn’t make anyone feel any better. You remember what they say about good intentions, right?

Loyalty Program Takeaways

One takeaway from this is that effective tenant loyalty programs are about more than solid promotional offerings. They also require clear, simple, effective communication. Having multiple channels (like mobile apps and digital screens in elevators) in addition to the traditional SPOC delivery path can help. Otherwise, what was meant as a benefit could lead to frustration.