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Peter Maloney, The Ultimate KPI


Peter Maloney, The Ultimate KPI

Most well-run property management operations now have a set of KPIs (Key Performance Indicators) and KPAs (Key Performance Activities) in place, to not only guide the daily operations of the business, but to provide a dashboard for monitoring results.

Whilst these are essential to a successful business, they are not nearly as important as the Ultimate Key Performance Indicator, which is, “does your client believe your company is worth recommending to friends and relatives?”

This concept has been developed by Fred Reichheld in his book The Ultimate Question, which looks into a scheme called NPS (Net Promoter Scores). NPS works on the principle of measuring customer loyalty simply by asking one key question rather than relying on lengthy satisfaction surveys; this question being, “On a scale of zero to 10, how likely is it that you would recommend us to your friends or colleagues?”

NPS measure the difference between the percentage of customers who give high responses (promoters) and those who give low ones (detractors). Promoters are defi ned as customers who give the company 9 or 10, while detractors hand out “0” through 6. Customers who log 7 or 8 are deemed “passively satisfi ed” and aren’t calculated in the final score.

A customer saying that they would recommend a business (a 9 or 10) puts their own reputation and credibility on the line, and this is a good indicator that they are happy and will continue doing business with the company. Not only that, but they will tell their friends, family and colleagues, which will ultimately help the business grow.

0-6 are Detractors

These can be defi ned as owners for whom we are managing a property, but who can actually be bad for the company in the long term. If we can’t convert them, they are less likely to list any other investment property they have with us and are more likely to cancel their management agreement, change to another property management company or spread bad word of mouth. Ultimately they are more costly to serve because of their dissatisfaction.

7-8 are Passives

These owners are generally positive about the company but are signifi cantly less valuable than Promoters. Many companies over-estimate their success by assuming relatively high customer satisfaction will lead to future growth. In reality, Passives may be satisfi ed but that may not be enough in the long term.

9-10 are Promoters

These owners drive business growth. The company has gone beyond satisfying their needs and truly delights them. As a result, they will list other properties they have or purchase with us in the future. In addition to this, they will recommend us to many others and we will not need costly marketing campaigns or promotions to retain their business.

The Net Promoter Score is created by calculating what percentage of a company’s customer base are Promoters and then subtracting the percentage who are Detractors.

% PROMOTERS – % DETRACTORS = NPS

The resulting score captures the current status of a company’s customer base and also predicts future revenue growth.

I was introduced to the NPS system by Chris Rolls of Rental Express, and he showed me how to tie the system into a Survey Monkey account, which not only had a response rate of over 65 per cent, but also correlated the results.

Our results were good, with 33 per cent of people rating us 10 out of 10, but more importantly it enabled us to engage with our clients below 7. We were able to do this by clearing the air and actively listening to their concerns. After understanding and then responding to their valuable feedback many of these relationships have been turned around.

Customers need to “vent” as to why they believe we have failed and in doing so, satisfaction levels instantly rise. An organised NPS system provides the ideal vehicle for your clients to vent in a structured and worthwhile way. An NPS system is a vital component to a well-run property management or sales company because it will help the entire team focus on the customers. This is why I believe it to be the ultimate KPI.


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Peter Maloney, The Ultimate KPI