Magazine article Journal of Property Management

Winning Applause

Magazine article Journal of Property Management

Winning Applause

Article excerpt

Benchmarking Tenant Satisfaction

Today, collecting satisfied customers has become as important as collecting rents. Building owners, asset managers, and property managers throughout the real estate industry have recognized the value of measuring and benchmarking the level of tenant satisfaction as a means of tenant retention at their properties. Listening and responding to the needs, concerns, expectations, and opinions of tenants has moved beyond sending out a few staff-created questions with a return envelope. Real estate companies of all sizes are now quantifying performance results and comparing them with "best practice" indices.

This shift toward more tenant-based business practices has occurred as a result of several megashifts within the industry.

Recovery to growth. In a recession period, the needs of tenants become secondary to the financial survival of the owner. As the industry enters an economic-growth mode, owners and managers become more focused upon tenant retention and performance improvement.

Variety to standardization. Institutional owners expect consistent, uniform performance measurement standards throughout their portfolios. Comparing "like results" gives owners and managers data to evaluate performance.

Gut driven to information driven. Owners and asset managers are increasingly demanding quantifiable data to support decisions. Just saying that "the tenants are happy," is no longer acceptable.

Qualitative to quantitative. Owners are incorporating survey scorecards and other quantifiable measures within their business practices. Subjective interpretation has been eliminated in a new era of accountability and continuous improvement.

Founder identity to brand image. As the founders of many successful companies retire, the capacity and capability to secure and retain existing and new business is no longer based on charisma and tradition, but on current corporate performance.

The one common factor in all of these trends is the need to solicit feedback and listen to customer concerns. By using performance measurement techniques such as quantifiable tenant surveys, owners and managers not only improve performance but build a competitive advantage.

Establishing a Baseline

Before you can begin improving your tenant satisfaction, you must evaluate how your tenants judge your current performance. This score will serve as a baseline against which to compare future results.

A good tenant satisfaction survey should measure such areas as:

* responsiveness and follow through,

* appearance and condition of the property,

* quality of the management services,

* quality of the leasing services,

* tenant relations,

* renewal intention,

* property characteristics, and

* readiness to solve problems.

Once you have developed a baseline survey of scores, you will have a standard against which to measure future improvement, or lack thereof. By using your survey results as a report card, you can also isolate areas of improvement and focus training and capital where it is most needed.

Tenant satisfaction benchmarks also allow you to compare current and future performance against industry "best practices." In this way, the performance bar can be raised, and the company can become more competitive. Industry-wide information on best practices is difficult to obtain, although managers might be able to share such information with peers. One advantage to using a third-party company to conduct tenant surveys is its access to other data that can be used for comparison.

Designing A Survey

For a survey to be meaningful, questions must be structured in a way to elicit a statistically valid response. A good survey is usually composed of 45 to 55 questions and takes 10 to 12 minutes to complete. Avoid open-ended questions; instead ask questions with a scale that allows results to be tabulated. …

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