A majority of real estate businesses view their relationship with tenants as transient, which is understandable given the average tenancy occupancy in Australia is thought to be only 11 months.
I have always believed this to be very myopic though, as many tenants’ property needs extend way beyond the term of their tenancy agreement. This being the case, I believe that businesses should always try to establish cradle-to-grave relationships with tenants, since a longer-term view could ultimately prove very rewarding.
A few years ago, I commissioned an extensive study into the average client lifecycle. The study demonstrated that effective client lifecycle management can enable powerful interaction strategies that lead to significant long-term business growth and profitability.
I set out to analyse the behaviours that characterised our clients to determine the right objectives and identify the best ways of reaching them. Although they are not technically clients, I was particularly interested in our relationships with tenants because I believed that we were missing an opportunity. As I feared, the results highlighted that there was significant room for improvement on our part. Of greatest concern, the study showed that once a tenant vacated a property, there was very little or no ongoing interaction, effectively spelling the end of the relationship. This was particularly alarming because a staggering 18 per cent of the tenants we tracked went on to purchase a property in the same suburb within three years.
The study taught us a very valuable lesson. It highlighted the true extent of what we had let slip through our hands, since these people would obviously also go on to sell these properties in the future.
Needless to say, our view of tenants changed dramatically from that point onwards. We decided to create a compelling and cost-effective customer experience strategy linked to the broader strategy of the business. Rather than view tenants as ephemeral, we now understood that building cradle-to-grave relationships would lead to delayed gratification.
By removing the office walls (metaphorically speaking), we improved internal communication and were able to closely align property management with sales, ensuring a consistent customer experience across all facets of the business. Our ethos is that lasting relationships are built on information, not promotion, so tenants now regularly receive a plethora of useful information on both the local area and the market in general.
Douglas Driscoll is CEO of Starr Partners, and was named Industry Thought Leader of the Year at the Real Estate Business Awards 2016. Originally from the UK, Douglas is widely regarded as one of the industry’s preeminent thought leaders, and is lauded for his dynamic and pioneering approach.