Key performance indicators are critical if you want to evaluate the success of your business. Unlike targets, these business metrics can be fluid, can change depending on the nature of your business or the objective you want to achieve. They are put in place to help you understand the key variables which impact your business and to adjust in time to avoid adverse impact and to maximise on favourable outcomes. But how do you know that you are measuring the right KPIs? Here’s 3 KPIs every lease management company should track.
Your inbound lead enquiries should be frequent enough to fill any gaps in your lease calendar.
Whether it is your sales hot line or your website that drives the enquiries to your business, your software system should be able to count the volume, value and conversion of those inbound queries. Measuring the quantity, frequency and conversion rate of your enquiries will help you to evaluate the integrity of your sales pipeline. Too few enquiries and you risk the under utilisation of your lettable assets. Too low a conversion rate and you risk impacting the overall profitability of your estate. You should use this KPI to drive your sales and marketing activity – especially when you know a lettable asset is coming up for return/renewal.
If you are lucky, you might even be able to use your inbound leads as a waiting list if your assets are in demand and are letting on a first come first served basis!
So, technically that’s two KPIs. But measuring which contracts are due for renewal and your retention rate is clearly important. Certain regional legislation (for property leasing) requires you to offer contractual break points part way through the lease contract. Even if there’s no legislative requirement, holding an annual contract review will set communications expectations and build trust early in long term relationships. Setting reminders on your dashboard of volume and value of contract, at their annual anniversary, will help you to focus your attention on your most lucrative contracts and customers.
Measuring retention should also be mission critical. Contract acquisition is more expensive than retention. Retaining customers can boost profit by up to 25% per customer, whereas acquisition is 5-25 times more costly than retention. Renewing your lease contracts should be one of your top priorities.
Leased/Not Leased (Occupancy) Metrics
Perhaps one of the single most important KPIs for a leasing company is to understand your current leased/not leased capacity. For property leasing companies this will be your occupancy rate. Understanding this metric drives so many key decisions in your business. If you are under occupied/utilised then you need to be marketing harder to drive more enquiries. If you are fully occupied/utilised you should be considering putting prices up to correspond with demand.
This last point is particularly important for seasonal businesses – such as hospitality services during Summer. Make sure you have a software system which allows for pre-programmed price adjustments to ensure you are maximising revenue and profit during your busiest times.
CloudTamers Lease Management for NetSuite gives you full visibility of your KPIs and control over your business when you need it most.
To find out more about our software products get in touch
Written be Emma Stewart –Sales & Marketing Director at CloudTamers Ltd