With the shortening of leases, the glut in commercial office space and increasing demands from tenants for better service, tenant retention is paramount for landlords. The City Surveyor manages an investment portfolio of approximately 250 properties for the City of London (CoL), of which 76 are directly managed. The Investment Property Group (IPG) responsible for managing the portfolio believes tenants are their core business and therefore their satisfaction is important. Indeed, tenant satisfaction can significantly influence that holy grail during times of recession: lease renewal. With this in mind, the IPG facilities management team devised a tenant response programme to improve services to tenants, forming part of an annual continuous improvement process and promoting a more transparent management practice.
In 2001, CoL began distributing tenant surveys to measure customer satisfaction. Feedback from tenants was analysed and addressed by separate teams on a case-by-case basis. Significantly, survey results were not reported back to tenants. Thus, the opportunity to enhance communication and its potential to improve tenant satisfaction was recognised as part of a research project for UCL’s MSc Facilities Management programme in 2008. The project developed into a formal response initiative by CoL, stemming directly from the feedback received in the tenant satisfaction survey.
Survey design and distribution
Prior to 2008, the tenant survey asked if tenants were satisfied with FM services, but did not ask which services were most valued. To enhance the questionnaire, Servqual methodology (a service quality assessment tool) was introduced to provide an important context to the feedback from tenants. Servqual’s ’empathy’ determinant captures customer expectations against actual perceived quality. Consequently, tenants are now asked to rank the importance of FM services so their expectations can be measured and compared to satisfaction scores. Furthermore, questions were added to gauge interest in other FM services.
Sustainability emerged as a key issue in the 2008 and 2009 surveys. Armed with this information, the FM team expanded recycling facilities to include battery, mobile phone and printer cartridge recycling. Furthermore, waste and recycling management control procedures were introduced. Not only did this improve the recycling services available to tenants, it also won numerous prizes in the recent Clean City Awards. In 2010, survey concerns gravitated towards security and value for money. Indeed, security was ranked by tenants as the most important FM service. As a result, the IPG FM team are conducting security reviews of all properties in conjunction with CoL’s security advisor.
The tenant Survey Response Programme
Once completed, surveys are received, urgent tenant concerns relating to health and safety, security and fire awareness are addressed immediately. Then, data is collated and sorted into groupings by property, service, tenant, and comments. Sean Power, the City Surveyor’s performance manager compiles data and compares it with previous years, highlighting key areas of concern. This report is then turned over to the FM team, which distributes the data to all internal stakeholders, including management surveyors, building surveyors, and building managers.
Two project managers from the IPG FM team then organise and chair tenant response meetings for each property. The group agrees upon an improvement action plan, focusing on areas of most concern to tenants for each property. The FM project managers are pivotal to the process as they piece the improvement process together, get it approved by the stakeholders involved, and then check to ensure the agreed improvements are implemented throughout the remainder of the year.
Continuous improvement lies at the heart of this process, as data from all properties, not just the low scoring ones, are analysed to determine what, if any, actions can improve existing FM services.
Conducting a Tenant Response Programme
Plan your programme
Have a clear timetable and project completion date in mind. It takes time to plan and execute the key tasks.
Use your tenant feedback
Once your tenant survey is complete, it is vital that you analyse the information thoroughly. The findings provide useful insights into tenant needs and areas of dissatisfaction.
Spread the word
Cast the net wide to ensure you disseminate survey feedback and consult with all internal stakeholders.
Review and take action
Response meetings are designed to capture the improvement actions. Ensure the minutes are agreed.
Communicate with your tenants
Create a platform to relay survey findings to tenants, usually in the form of a report or tenant meeting.
Check action points
Monitor improvement action plans to ensure nothing is overlooked. Use calendar reminders to review and update improvement action matrices.
Document your processes
Keep track of your methods, so they can be easily picked up by other members of the team.
The FM project managers are also responsible for compiling the tenant response report, devised of the following headings:
- Introduction
- What you think is going well
- What you think we can improve
- Progress to date
- What we are planning next
- What we would like from you
- Useful information
- Conclusion
It’s good to talk
When it comes to communicating with tenants, the message is unequivocal: “more is better”. Each year, tenants continue to emphasise the need for more effective landlord communication. Along these lines, in 2009, the IPG FM team introduced an ‘at a glance’ building information sheet for each property. There is an urgent need for internal stakeholders to provide timely and accurate information to FM, particularly regarding ongoing works. Indeed, senior level internal management meetings now take place to ensure information continues to flow through to FM on a regular basis, as it has been recognised that FM staff based in the buildings are best placed to facilitate the provision of information concerning contractor activity to tenants.
FM adding value to services
As demonstrated, tenant satisfaction surveys can be dissected to build up an objective picture of what tenants’ key needs and concerns are. This valuable information offers a strategic value to organisations aiming to provide superlative services to tenants.
In 2010, as well as carrying out property security reviews, the IPG FM team also worked in partnership with the Resilience and Community Safety Team to provide free guidance and advice to tenants on general security, creating contingency plans, coping with emergency situations and personal security. While the notion of a caring landlord is likely to be met with cynicism in some quarters, previous roadshows were surprisingly well attended, providing positive interactions with tenants. This suggests that advice and assistance on specialist areas is welcomed by CoL tenants.
Most FM activities cut across a wide range of services and departments. The IPG FM team is no different, and it is through its connection to an extensive network of internal contacts (ranging from the energy management team, the sustainability team and the resilience and community safety team) that it can help deliver extra value to its customers. Indeed, by working with expert teams from other departments, IPG’s collaborative approach not only provides additional services for tenants at no extra cost, but also provides CoL with a competitive advantage over those commercial landlords less inclined to communicate closely with their tenants.
Internal benchmarking
Analysing the tenant surveys helps lay a solid foundation for continuous improvement as FM managers can easily differentiate between high performing and poorly performing properties.
A common trait among CoL’s higher scoring flagship properties is the strength of FM management, so the challenge is to export such best practices in areas such as recycling and waste management to other properties.
Since internal benchmarking was introduced, the overall satisfaction score has improved by seven per cent, climbing from 66 per cent to 73 per cent. Admittedly, there are limitations to benchmarking radically diverse properties, but the benefits are not just property related. The other distinct advantage of benchmarking is that it marks a shift away from individual errors and challenges the status quo of inefficient practices that have become accepted. Rather, benchmarking focuses on FM staff working together, learning from each other, and adopts a team approach to enhance existing processes and procedures, reaping the advantages of working as a cohesive unit with shared objectives.
FM as a core service: opportunities and challenges
CoL’s tenant satisfaction survey provides ample evidence that FM is the strongest link in the relationship chain binding landlords and tenants together. Engaging with tenants and addressing their needs is a fundamental requirement for protecting CoL’s core customer base. This pushes IPG FM’s role away from being just a support service. Instead, in protecting revenue IPG FM forms part of the core service.
Planning and executing a continuous improvement programme requires considerable resource. Lizzy Hand, head of IPG FM states: “In terms of time and energy, our investment has been substantial, but changes to our tenant survey revealed facts and figures that support our service enhancement programme and fully exploit best practice across a wide ranging portfolio.”
Having internally benchmarked the portfolio, the team must now weigh up the benefits of externally benchmarking tenant satisfaction.
Like internal benchmarking, external benchmarking comes with financial, time and resource costs which must ultimately be factored into any decision to benchmark externally.
As the recession continues to pressurise tenants to meet tight budgets, landlords will be challenged to maintain or reduce current service charges while continuing to maintain tenant satisfaction levels. The IPG FM team’s continuous improvement programme is a key driver in maintaining tenant expectations and CoL’s positive and established brand image.
Admittedly, proving a causal relationship between tenant satisfaction and tenant retention is complex. However, analysis of who actually completes the questionnaires offers an intriguing insight. Over 65 per cent of tenant questionnaires are completed by managers, CEOs or owners, ie stakeholders who will play a significant role in the decision to renew a lease.
IPG’s continuous improvement programme might fall somewhat short of delivering the holy grail. But by providing added service value to commercial tenants, the City Surveyor’s continuous improvement programme has nevertheless unearthed something for the industry to treasure: a loud and confident case for the repositioning of FM as a core service.
