As a commercial property manager, there’s a lot that goes into successful tenant involvement and management. To ensure you’re on the right track, it’s important to have a clear set of Key Performance Indicators (KPIs) in place.
KPIs are necessary for understanding your progress and success and establishing important areas of your business to measure. You also need them to establish business goals and growth plans. If you don’t have a clear system of tracking for tenant communications, you won’t be able to gauge how well you are performing in specific areas, or identify areas that need improvement.
In this guide, we'll cover how you can establish and use KPIs for tenant communications, as well as a few important metrics you should be measuring.
What Are KPIs For Tenant Communications & Why Are They Important?
Key Performance Indicators (KPIs) are metrics used to assess, monitor, and manage business goals. For property owners and managers, they are necessary for efficiently managing your property, company, and tenant communication. Without having a clear set of KPIs in place, you won’t be able to measure the success and effectiveness of your tenant communication strategies.
KPIs are used by all industries and roles. The most important thing about them is that they help you understand your progress and your success in certain tasks. They give you a standard to measure your performance against, and they give you a reference as to where you can improve. This is essential for monitoring how well you apply and improve your tenant communications over time.
In the property management industry, KPIs need to be very specific to certain areas of business performance. Instead of setting goals that cover a broad overview of your business, try to establish KPIs for specific processes.
For example, if property managers only focus on broad performance metrics, like overall profitability, they don’t gain a complete picture of business success and where they can improve. It’s crucial to understand the individual factors and metrics that influence the bigger ones - like tenant satisfaction and turnover rates. This is why setting specific KPIs for tenant communications is important.
Monitoring specific KPIs for commercial tenant communications helps property managers understand issues specific to tenancy and any tenancy issues. They can then work to improve these issues, which will show in their metrics over time. This is necessary for improving the tenant experience and the property business’s bottom line in the long run.
Metrics To Measure In Tenant Communications
There’s a lot that goes into keeping tenants satisfied and providing good tenant communication. To keep tenants happy and better understand the success of your property management, here are a few of the most important metrics and KPIs to monitor.
- Occupancy rates: Understand the occupancy rates of your property as well as the occupancy rates of properties in the area. This is necessary for identifying how successful your properties are and establishing goals for future revenue from tenants.
- Tenancy turnover: How frequently tenants leave the property. Again, you can compare this to industry and area standards to understand your specific performance.
- Rent levels: The relationship of how much rent you’re charging in comparison to other buildings in the area. This is essential for offering competitive rentals.
- Tenant satisfaction: An important tenant communications KPI. Understand what tenants think about you and how the property caters to their needs. You can gain an understanding of tenant satisfaction and how it improves (or declines) over time through regular surveys and tenant outreach programs.
- Property management fees: Ensure your property management fees are within the relevant market range.
- Repairs and maintenance: It’s important to understand the costs of rent and maintenance, the frequency of maintenance, and how you can optimise these costs for tenants.
How To Implement KPIs For Tenant Communications
To implement tenant communication KPIs, you need to establish exactly what areas of your property performance you wish to measure. Then, set clear goals that you can work towards. As a result, you can choose specific metrics to track over time to monitor the progress of that goal.
When setting goals, make sure you use the SMART framework. SMART stands for:
- Specific
- Measurable
- Actionable
- Relevant
- Time-Bound
SMART KPIs help you avoid vanity metrics and dig deeper into your property management performance. They keep your goals more specific so that you can better measure your success.
Examples Of SMART Goals For KPIs
Say you set a KPI around the occupancy rate of your building. If this is the case, the goal based on your occupancy rate KPI should be something like:
“Achieve X% occupancy of the building by [date] and maintain this for [time period].”
You should not say:
“Improve occupancy rates.”
The first example is specific, it is bound by a time period, and it is something you can have a clear vision of achieving. The second example is too vague, and won’t help you achieve real business growth.
Another goal could be to improve tenant satisfaction by 10% over a 1-year period. You could start by sending out a survey to your tenants to establish current satisfaction levels and communicate with them to see how you can improve their satisfaction. This will give you an understanding of where you can improve.
You can then put strategies in place and implement them over the next year - after which you’ll conduct another survey and see if tenant satisfaction has improved.
So, once you have established your KPIs around tenant communications, turn them into goals and measure them over time. Your goals should keep getting more ambitious with each period, helping your business achieve and manage sustained growth.
Understanding industry and area averages is also helpful when establishing your KPIs and goals. It gives you a good benchmark to compare your performance against.
Final Thoughts
Without KPIs, you won't be able to properly understand the tenant experience. Any good tenant communications strategy starts with a system of goals and metrics to monitor this.
By paying attention to the right KPIs, you will be able to operate more efficiently and cover the most important areas of successful property management. Ultimately, this will result in a better bottom line for your business.
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