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How satisfied are your tenants?

Customer service and satisfaction have become the management buzzwords of the past few years. Everywhere you go, you hear business people stressing the importance of keeping the customer happy.

Yet, as you and I can often painfully attest, there are few organizations that go beyond paying lip service to this goal. The fact of the matter is that superior service is the exception, not the rule.

Measuring customer satisfaction

One reason that the promise of customer service is seldom kept is that it is often difficult to quantify. As a result, although companies intend to make service a top priority, they never really know how well the objective of customer satisfaction is being achieved.

Quantifying customer service also helps identify your strengths, so that they can be capitalized on, and your shortcomings, so that they can be improved upon. And by comparing these strengths and weaknesses to those of your competition, you may be able to establish an advantage you can communicate to potential customers.

To quantify your customer service, you need two things:

* a survey of how the customers feel about the products and services you are providing, and

* a method to quantify these feelings into an objective, measurable format.

Conducting the survey

Many companies make an effort to survey customers. In our firm, we use the form shown in Figure 1. This is mailed on an annual basis to each of our residents to ensure that a representative sampling is obtained.

On the reverse side of this document is our address. Customers simply complete the survey, fold it, seal it, and drop it in the mail. The postage is prepaid to encourage a good response rate.

Typically, the response rate to our survey averages 28 percent, which is an exceptionally high return rate. This response yields an accuracy rate of approximately plus or minus 2 percent.

While many companies conduct surveys, few take the all-important step of quantifying the results into a number that can be evaluated and measured. But for us, once the forms are received and tabulated, the most important work of quantifying the results begins.

Building a customer satisfaction index

To quantify the results of the responses to each question in our survey, we build a customer satisfaction index (CSI). A weighted average, on a scale of one to ten, is developed for each question and for the whole survey. Figure 2 shows the process for building these scores.

Once the score for each question is computed, the results are combined into three separate indices: a CSI, a PSI (product satisfaction index), and an SI (site index). In our survey, questions 1-9, 10, and 19 go into determining the CSI; questions 7, 8, 12, 14-17, 24, and 26-28 make up the PSI; and questions 20-22 constitute the SI.

Experience has shown that the CSI is the most important of the three indicators. This index has the most direct relationship to how capably each of our locations is managed. The questions in the CSI are primarily related to the onsite management team, which, in my opinion, is the single most important element of our operation. Invariably, the properties with the highest CSI scores are the locations that operate to their maximum potential.

Improving on your weaknesses

Locations with marginal or poor CSI scores indicate a need for improvement. Because the CSI pinpoints the specific areas of an operation that need improvement, it is relatively easy to formulate plans to correct these underlying causes.

For example, when the response to a particular question is below what is acceptable, an action plan is developed to correct the situation and improve this score. Each action plan includes:

* A one-sentence definition of the specific problem that the CSI question has identified. It is vital to work on solving the problem by getting at the root causes rather than merely treating the symptoms. Correcting the underlying causes prevents the problem from recurring.

* The specific steps needed to address the identified root causes.

* The one person assigned for making certain that each of the action steps is completed.

* The deadline date for completing each action step.

An example of a simple action plan appears in Figure 3.

Over time, we have accumulated a comprehensive database on customer satisfaction at each of our properties. Based on a correlation of information from all the properties, we developed specific objectives for customer satisfaction both company-wide and at each location. We also have made the people in our organization accountable for their CSI scores.

In addition, we survey our competitors' customers so we know how we stand relative to their operations. This benchmark enables us to evaluate the quality of our service and to establish competitive advantages that we can use in our sales efforts.
Figure 3
Sample Action Plan
Our emergency maintenance response (Question 5) is poor because
our afterhours answering service is not relaying telephone
calls to maintenance personnel quickly enough.
 Assigned Due
Action Step to Date
1 Alert answering service Rick May 1
to the need to relay all
maintenance requests
to the person that is on
call that evening
2 Contact the answering Sam May 15
service each day before
closing to inform them
who is on call, and where
they can be reached
3 Check in with answering Sally May 15
service each morning
to see if any calls were
received overnight; take
action as appropriate
4 Follow up with the CSI Beth May 30
respondents that had
indicated this was a

Many people believe that the intangibles, such as customer service, cannot be measured. I believe that is exactly wrong. Almost anything can be measured. And as the management axiom says, "What gets measured, gets done."

John Gray, CPM|R~, is president of Summit Management Company, AMO|R~. He is responsible for leasing, management, and maintenance of 16,000 apartments in 60 locations. Mr. Gray is a graduate of Cornell University.

Summit Management Company is based in Charlotte, N.C. and has regional offices in Atlanta, Baltimore, Tampa, and Columbus, Ohio. The firm manages properties in the Northeast and Southeast for its own and other portfolios.

Figure 2

Calculating a Customer Satisfaction Index

To build a weighted average for each of the survey questions, one first assigns a numeric value for each response. In our survey, we evaluate responses on a one-to-ten basis (the most favorable response is ten, the least favorable is one). This number is multiplied by the number of responses in each category. The products are added together and divided by the total number of responses to come up with the weighted average score.

For example, we asked, "How satisfied are you with the attitude of our management staff?" Of respondents, 66 were "very satisfied," seven were "satisfied," one was "not too satisfied" and one was "not all satisfied" the table below shows how we calculated a weighted average for this question.
 No. of Resp.
 Resp. Value Product
Very satisfied 66 10.00 660.00
Satisfied 7 6.67 46.69
Not Too Satisfied 1 3.33 3.33
Not At All Satisfied 1 1.00 1.00
Total 75 711.02

This total divided by 75 responses equals a 9.48 score. As you can see, a 9.48 score on a one-to-ten scale indicates that this area is a real strength in our operation.
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Title Annotation:includes related article
Author:Gray, John
Publication:Journal of Property Management
Date:Nov 1, 1992
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