50% of CRE Property Management Professionals say their primary method for measuring tenant satisfaction is “informal tenant meetings,” according to an industry benchmark survey conducted by Building Engines.
Put another way, this research means half of property managers in Commercial Real Estate rely on hallway conversations or other chance meetings with tenants to understand their current sentiment; whether they are happy, struggling with maintenance issues, growing, shrinking, or (worst-case scenario) not planning to renew their lease.
Hallway conversation, an informal meeting, or even a regularly scheduled meeting also lacks data. It’s not accessible, retrievable or directional in any modern organizational sense.
Our study also showed that 71% of CRE owners and managers believe that all tenant employees are now their customer, yet a majority (52%) are only “somewhat” or “not at all” effective at capturing insightful sentiment from tenant employees beyond the primary point of contact.
It’s perhaps because of this that only 20% of assets are extremely confident they understand the satisfaction of building employees.
We must do better.
These research findings illustrate a major problem in our industry, one in sharp contrast to best practices – and common sense.
We know that tenant satisfaction can be the difference between keeping and losing a management contract – so why do we continue to hinder our ability to collect this critical insight?
Every property owner and manager knows that satisfied tenants are the lifeblood of an efficient and profitable building. Happy tenants become loyal tenants, and loyalty leads to lease renewals. Research from JLL has shown that tenants who are satisfied with property management are three times as likely to renew.
But to foster this loyalty, a full 50% of our industry needs to improve the way they seek to engage with, and understand, tenant satisfaction – far better than ad hoc, informal tenant meetings. The traditional methods building owners and property managers have used for decades to understand customer sentiment are largely ineffective for today’s tenants.
Tenant satisfaction is a potential moneymaker.
From a cost perspective, it requires far more resources to acquire a new tenant than to keep an existing tenant. That means the majority of our attention and resources should be dedicated to ensuring a tenant is satisfied during their occupancy. If we think about a tenant’s lease in terms of a life cycle, this “occupancy” phase (after the lease is signed and before the renewal occurs) is the longest and most critical part of your relationship.
Insight on how to best optimize this phase means driving asset value.
Data on performance and tenant sentiment, collected continuously across your portfolio, arms you with the insight you need to keep customers satisfied, increasing their loyalty and your bottom line. To understand how to best nurture tenants through the duration of the occupancy phase requires collecting data on a continual, proactive basis through easier, more reliable methods of collecting tenant feedback.
With ongoing measurement, you’ll have the insight to manage every building, every tenant, and every square foot.
How to improve tenant sentiment measurement today.
– Work order software systems are designed to provide complete visibility into every building issue – dramatically improving communication, staff productivity, and service response times, leading ultimately to happier tenants.
– Proactive surveys help to keep you in touch with tenant sentiment on a regular basis, prioritizing your efforts to the largest problems.
To the 50% of properties relying on informal tenant meetings, I implore you to consider adopting these tools as part of a larger tenant sentiment measurement program across your assets. This type of initiative can be critical to giving CRE properties timely information to identify tenant problems before they become emergencies.
Seek tools that help you report on key operational metrics and critical alerts, including deteriorating tenant satisfaction levels over time. And, make sure they’re easy to use. Only 42% of building owners describe their current solutions as “easy to administer” today. Perhaps that’s what leading to this dangerous reliance on informal tenant meetings.
Invest more in this critical lifeblood of building operations. Start by reading our free eBook “What Are Your Tenants Thinking? How to Find Out with Ongoing Feedback.”
Let’s continue this conversation.
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