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Keeping tenants satisfied.

Keeping Tenants Satisfied

The costs of dissatisfied clients or tenants are many. In addition to the time that complaints take, many broken leases have resulted from minor problems that grew out of proportion. Satisfied clients rarely tell more than two or three associates about the excellence of their property managers, but the dissatisfied client tells an average of 12 other people in that market. Rarely, if ever, would a manager get the opportunity to tell the other side of the story.

Unfair? Yes. But the reality of doing business is that maintaining good relationships is important for success.

Keys to satisfying

clients and tenants

Over the past 10 years of client and tenant research, several principles of relationship management have emerged. The following list applies equally to client and tenant relationships.

* Before entering a client or tenant relationship, the property manager should try to determine whether the potential customer is a chronic problem complainer. While credit references are checked, the recent history of the client or tenant could be checked by talking with those involved in previous relationships. If the tenant or client is a chronic complainer, the relationship might be avoided altogether.

* In initial conversions, as well as later, the property manager should determine what areas are critical to the client or tenant. The attributes of the property, lease, or management contract that typically cause satisfaction are not the same attributes that if things do not go well, would cause dissatisfaction. For example, speed in leasing a new property may be a source of instant satisfaction for almost any client. However, one client might not be dissatisfied if the process proceeded slowly but steadily. Yet the same client would be dissatisfied if certain cost areas were too high or low (fearing something was not being maintained well). Every client or tenant is sensitive to different attributes of the relationship.

* In selling services to a potential client or marketing a lease package to a prospective tenant, the property manager should be careful to create realistic expectations. Much of the research on client and tenant satisfaction suggests the most satisfied customers are those whose experience with a property manager were closest to their initial expectations. Promising too much or even allowing a tenant to have unrealistic expectations is likely to result in a dissatisfied customer and perhaps even a broken lease.

As strange as it sounds, there is some dissatisfaction created even when too little is promised and too much is delivered. The basic credibility of the manager may be questioned and suspicions may arise as to what else could have been delivered that was not.

* The property manager should look for all opportunities to build communications between the management firm and clients, not just call when problems arise. Rapport that is created during good times is useful when problems emerge.

A corporate tenant in Dallas had dealt with the same management firm in two previous moves. When a problem arose in the latest move of an out-of-town division into Dallas, the firm's real estate director was quoted as saying, "As well as they [the management company] have handled us before...I can't believe they wouldn't do it againt." The relationship investment paid off when the tenant had legal grounds to cancel the lease but chose not to.

* The manager must remember that there are really no minor problems. Every problem is a source of a larger problem if it is poorly handled or ignored.

A New Orleans property manager of an office development learned the bitter lesson that one man's detail is another man's main issue when a routine request was made by the client, also a tenant in the office complex. The client asked that remodeling in the lobby be done after hours. Hoping to save the client some money and thinking that the request was casual, the management firm pointed out the remodeling would take only three more days. The client dismissed the management firm on other grounds, but the relationship turned sour because of that one incident.

* The hardest client or tenant to satisfy tends to be a partnership. An effort must be made to understand the "partnership" agenda.

* The tenant who has spent more time searching for a property is more vulnerable to disenchantment than the tenant who leases one of the first properties he or she sees. This phenomenon results from what psychologists call "cognitive dissonance."

Cognitive dissonance is the residual feelings that a tenant has toward other site choices once the decision has been made. The property manager can relieve the dissonance by welcoming the tenant, encouraging other tenants to welcome him or her, and reassuring the tenant that the decision to lease was correct. This sounds simple, but it works.

When problems arise

Despite the best efforts of the most professional property manager, problems and mistakes arise. Several research studies have concluded that clients are more satisfied after a problem has arisen and been handled satisfactorily, than if no problem arose. Thus, a key time in building relationships occurs when something goes wrong. If the response of the property manager exceeds the client's expected response, the relationship is enhanced.

* Clients should be kept informed whenever a problem is being dealt with. Research suggests that information (good or bad) prevents discrepancies between expectations and reality from growing.

* Managers should call back after a problem has been resolved to determine whether the client is satisfied. If there is still a question, the manager will find out. If the problem was solved, it gives the client an opportunity to say so and thereby builds the relationship for the future.

Satisfied customers tend

to be profitable customers

Empirical research on client/tenant/ manager relationships suggests that the more satisfied customers are, the more profitable they will be in the long run. Exceptions obviously can be found where clients or tenants would best be released. Some research also suggests that when the relationship deteriorates beyond a certain level, the manager should cut his or her losses. Strategies for creating and maintaining positive relationships, however, are usually profitable and rewarding.

Dr. Charles S. Madden is chairman of the marketing department of Baylor University in Waco, Texas. He has worked with property management firms for several years in staff training and as a consultant for marketing problems.
COPYRIGHT 1989 National Association of Realtors
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Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Author:Madden, Charles S.
Publication:Journal of Property Management
Date:Jan 1, 1989
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