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The Importance of Understanding a Building’s Customer Satisfaction

On the surface, commercial real estate is largely considered part of the finance industry. If you invest $500 million to build an office building, you rent it to big corporations on five year leases and sell it, it’s really not that much different from a five year bond with a set annual yield. One difference between commercial real estate and finance: the data. The finance industry has an incredible amount of data that is used to understand risk and return. But, it is not just about having data, it’s the specificity of the data. 

At the property level there is data about how much it costs to build, fit-out, operate, rent, and sell a building. At the portfolio level, it is understanding how to best position assets for certain markets, data to tell you what to do if a property is underperforming. Renovate? Decrease rent? Advertise more? Right now, much of the data and tools for real estate professionals don’t stack up to what their counterparts in finance have had for years. In the recent decade, under the banner of sustainability, a lot more data about energy and water usage entered the equation. But that is only a look at the operating cost. For real estate to catch up to finance, that same amount of granularization that has come from energy use data needs to be expanded to all other building functions.

Even with all of this building data, a lot is left unknown about the future of a building. If asset managers could get answers to any question they had, they’d likely ask these three: What can I do to attract and retain tenants? How can I increase the total rent yield in my building? And how can I increase the value of my building? Really, these all boil down to one question: How satisfied are my customers? 

The difference between securities and buildings is that buildings have to perform different functions for different users. This makes understanding how a building is perceived quite difficult. But, data that makes answering these crucial questions possible exists. And there’s a way to capture it and analyze it. Let’s start with the very basics of consumer society—customer satisfaction. How satisfied are your tenants with your building? Not just the decision-makers, but individual people in the building. What do they enjoy, and what do they complain about? How is your conference room suite performing? How satisfied are they with the choice of restaurants and amenities? These basic questions often remain unanswered. This is one of the reasons tenant experience platforms have been gaining in popularity. With the kind of subjective information that can be recorded through interactions with a tenant experience app, managers just need a quick look at a dashboard to learn about customer satisfaction. Once you have created a Tenant Happiness Score you can start to dive deeper into the impact of how long it takes for the facilities team to resolve reported issues, what is the rating of various events you’re organizing, or restaurants in the building, amongst others. 

In flexible workspaces, the amount of interaction with other community members is one of the more powerful indicators whether the company will stick around. Tenant happiness data can also help you add context to other important questions. Do you know if your tenants are increasing their headcount or decreasing it? You probably could find that information looking at the list of access cards in use, but do you? Are your conference rooms the right size? Are the food and beverage operators you’ve chosen doing well? Are they visited by your tenants, or by people from other buildings? What kind of restaurants would be optimal to be placed in your building? By not using tenant satisfaction to help answer these questions, you’re committing two major sins. First, you remain oblivious to who’s likely to leave your building. Second, you don’t understand the strong points of your space. 

As talent attraction and retention becomes crucial and leases grow shorter, it no longer suffices to meet quarterly with your tenant’s head of real estate to figure out if they’re likely to leave. You need to be able to be proactive, combine all strains of data (headcount, activity, satisfaction, rent) and figure out that someone is likely to look for another location, even before they come to that conclusion. As CEO of tenant experience platform spaceOS, we do just that for clients. We track satisfaction, as well as objective factors, and provide you with a dashboard of high-risk tenants. This allows us to put together a list of areas for improvement, along with actionable insights that quantify which changes will make the biggest improvement in the tenants’ eyes. In other words, you’ll see detailed ratings of various elements of tenant experience: the events you’re hosting, individual rooms in your conference suite, restaurants, the responsiveness of your facility management team, and others. 

Having good information about your building performance gives you tremendous marketing leverage when renting your space. Imagine having hard data on your building performance and being able to confidently tell a potential tenant, “Our tenants are 87 percent satisfied, we’ve improved in the areas x, y, and z, and are now planning to raise that above 90 percent by following initiatives. The building was named as a factor in choosing our tenants as employers 148 times and never mentioned as a reason to seek different employment.” These are marketing gold nuggets. Very few building managers are able to do this, but they all should.

Finally, in the post-COVID-19 world, the data about how healthy your building is will make all the difference. Frequency of cleaning, air quality. How powerful would it be if you could just pull out a smartphone and immediately show when something was last disinfected and how healthy the air is? The healthy buildings will be occupied, the ones that are unsafe will struggle. 

Good data, drives good decisions—it’s as simple as that. As the saying goes in consulting: garbage in, garbage out. Good data translated into actionable insight can lead to better building and office design as well as better office management. Once you know how the building is used and what is popular, you can smartly focus your efforts and only provide the most desired amenities and services. This will lead to more effective tenant attraction and retention, as well as cost savings. 

The technology to capture, analyze, and present that data already exists. The landlords who will utilize it will leave their competition in the dust. And in the post COVID-19 world, the competition will be very stiff. 

The current technology enables landlords, with the help of tech companies, to grab the steering wheel and improve their performance significantly in terms of keeping and attracting the best tenants, automating their processes, and making better data-driven decisions. Those who won’t will remain sleeping giants and will eventually be slain by the more alert and equipped. The situation was put on fast-forward by the COVID-19 crisis. Being able to prepare one’s building for tenants’ return and to communicate with them is very hard to do without a building operating system in place. The situation is only to become more competitive. A portal like Glassdoor, only focusing on office building satisfaction, can be just around the corner. With wearables, the tenants will be aware of the air quality, humidity, and other elements of building performance. How healthy a building is can easily become public information and common knowledge. For now, you can collect the data, build your story, and use it for your advantage. In a short period of time, you may be the only one without an idea of how people think about your own building.

Propmodo is a global multimedia effort to explore how emerging technologies affect our built environment.

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