Just like retaining employees, it is generally more cost effective for a property to retain tenants than it is to acquire new ones. The reasons for this are myriad. There are leasing fees, legal fees, space planning fees, new construction costs, staff hours and the list continues.
Most agree it isn’t worth the extra cost and headache.
Tenant retention and satisfaction efforts must be intentional if we hope to avoid costly turnover at properties.
Four key disciplines of tenant satisfaction are communication, proactiveness, responsiveness and review. Readers may find these bits of wisdom familiar; however, it is good to be reminded about these wise, fundamental practices.
Communicate early and often!
Communication is a two-way street.
Managers must know their tenants and have a clear understanding of the roles they play within their organization. Are they operations personnel? Do they work in accounting? Perhaps they are the decision makers responsible for the lease.
In addition to knowing the roles of tenants, understanding each individual’s communication style and frequency will help ensure there isn’t a breakdown.
Once roles and preferences have been identified, it becomes important to communicate early and often. This means one must communicate both good and bad news. Though we would all prefer to communicate positive messages, accurate, direct and timely communication can foster trust and strengthen relationships even when negative news must be delivered.
For example, tenants don’t like being informed that there will be fewer parking spaces or delayed access to the property due to construction. However, it is much better to communicate these issues early and work with your tenants to ease the impact on their employees, visitors and business. Tenants will certainly be much more frustrated if caught off guard by the surprise construction.
Also, be sure to share the good news. Perhaps the property has recently won an award; or there is an upcoming tenant event; or the celebration of a tenant’s accomplishments. These are all great bits of information to include in a tenant newsletter or during quarterly tenant meetings.
Identify issues and bring solutions
It’s not enough to simply communicate with tenants. To go from good to great on the tenant satisfaction journey, requires being proactive.
Learn about the tenant’s core business to understand and anticipate their needs. When management companies proactively meet the tenant’s needs, it changes the relationship. By addressing issues related to the tenant’s business goals, the management company stands to be seen as an integral part of the tenant’s team and mission.
Take a 360-degree approach and evaluate how the building, amenities and the management team have an impact on the tenant’s business objectives. Can property management contribute to their brand?
What about influencing or enhancing their corporate culture?
Not only must managers be able to identify issues, they must also be in the practice of bringing solutions. From personal experience on projects, most know that it is exponentially better to have team members that bring solutions to the obstacles being faced, rather than simply reporting the problems.
Build authentic relationships with tenants early. Schedule in-person check-ins on a recurring basis based upon your tenant’s preferences. Having a sincere, open line of communication with a tenant will help avoid surprises that occur when a critical decision must be made, or a conflict arises.
Treat the problems, not the symptoms
When an issue does arise—and it will—dig a little deeper. It is critical to understand the reasons why as opposed to simply knowing what is causing the problem. Those who understand the need and not just the ask will be positioned to solve bigger issues and avoid future conflict.
Listening is key. Don’t attempt to formulate a response while the other party is speaking. Be intentional and actively listen to what they are saying. A good exercise is to repeat what the tenant said to help clarify and understand, while reassuring the tenant they are being heard. After you understand the underlying issue, be creative and collaborative in your approach. Flexibility goes a long way in finding timely and creative solutions.
In addition, successful managers will need to broaden their problem-solving network. An old proverb states, “…victory depends on having many advisers.” It is wise for practitioners to engage their professional network in identifying solutions. This includes the property management and engineering teams, colleagues and vendor and service provider networks.
“What gets measured, gets managed!”
This quote from the “founder of modern management,” Peter Drucker, is so poignant. One can follow all the previous advice that has been outlined, and it may yield a respectable tenant relations program. However, exceptional and sustained tenant satisfaction will only happen by measuring and benchmarking progress.
With frequent communication to tenants, be sure to include intentional opportunities for feedback.
Having key performance indicators will assist managers as they collect data to help guide and support management and ownership decisions.
In doing this, embrace technology to help streamline and document the evaluation process. Where the management team already has an engagement plan, consider using platforms like Asana or Basecamp to organize the work with assignments and due dates for team members. Even a centrally managed Excel spreadsheet for tracking engagement and feedback is a useful tool in capturing processes and data.
And despite best efforts, as the saying goes, “You can’t win them all.”
Shifting the mindset from disappointment to one of opportunity is powerful.
“I have not failed. I’ve just found 10,000 ways that won’t work.”
– Thomas Edison
Request feedback from tenants when they decide to leave. Feedback from unsatisfied or former tenants can be used to adjust service practices and make better decisions.
The community manager
In a recent strategic meeting with important real estate industry minds, the role of the community manager was introduced. This emerging role in property management teams has evolved based on market trends and an enhanced need for concierge level service and experience. While real estate leaders recognize the need for this function, the responsibility is being added to that growing list of ‘all other duties as assigned’ to the property manager. Time will tell if this position will be formalized into industry operations.
Regardless, viewing tenant relations through the community manager lens offers a better frame of reference for the practice of tenant relations.
With trends like live-work-play developments and work-life fusion, it will become increasingly important for management to be intentional in engaging their tenant community. Communicating, being proactive and responsive, as well as giving thoughtful review to these efforts are essential skills of the intentional community manager.
This article was first published to Insight Magazine: The Commercial Real Estate Journal.