Most real estate businesses regard their relationships with tenants as transient, which is understandable given that the average tenancy occupancy in Australia is thought to be only 11 months.
I have always believed this to be myopic, as many tenants’ property needs extend beyond the term of their tenancy agreement. This being the case, I believe businesses should try to establish ‘cradle to grave’ relationships with tenants, as a longer-term view could ultimately prove rewarding.
A few years ago, I commissioned an extensive study into the average client life cycle. The study demonstrated that effective client life cycle 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, determining the right objectives and identifying the best ways of reaching them.
Although they are not technically clients, I was interested in our relationships with tenants as I felt we were missing an opportunity there. As I feared, the results demonstrated that there was significant room for improvement on our part. Of greatest concern to me was the fact that once a tenant vacated a property, there was very little or no ongoing interaction, effectively spelling the end of the relationship. This was alarming, as a staggering 18 per cent of the tenants we tracked went on to purchase a property in the same suburb in the following three years.
The study taught us a valuable lesson. It highlighted the true degree of what we had let slip through our hands, as not only had we missed out on an opportunity to create brand loyalty, we missed out on potential income, given these people would obviously also go on to sell property in the future.
Needless to say, our view of tenants changed dramatically from that point on. 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 gratification down the line.
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.
ABOUT THE AUTHOR
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.