How is your space working? Five KPIs for Flex Workspaces
Creating the Key Performance Indicators (KPIs) for a flex workspace is a process that can be as simple or as complex as you want it to be. I am always in favour of trying to simplify things as much as possible and try to add, little by little, additional indicators that provide the info workspace operators need. However, no matter how simple the initial approach is, you should try to ensure that the indicators chosen provide as clear a picture as possible of how the business is performing.
Writing a post like this always generates a lot of doubt. You don't want it to be too simplistic, but neither do you want something extremely complex. At the same time, I always aim for this advice to be as useful for as many operators as possible regardless of their size or location. So, I finally asked myself the question: “If I could only measure five things, what would I measure?”
The list of those indicators that I would find it very difficult to do without is as follows:
Occupancy
Net Promoter Score
Leads
Invoicing per service
Costs per service
This group of indicators provides a clear economic picture of the space but also gives us information about the state of the service offered (or in other words customer satisfaction) as well as how marketing and sales are performing. All of them are also very easy to measure.
1. Occupancy
How many people do you currently have at a dedicated desk compared to the maximum possible number? And the same for offices or hot desk rates? In short, it is all about knowing how your services are performing and how they compare to the rest of the market. Knowing your availability is very simple, but essential in understanding which of your services are more attractive. Do you have 70% occupancy in one of the services and 1% in another? If so, this can't be an accident: you have to redesign the value proposition of the service that is failing.
2. Net Promoter Score
In my previous article, I talked about NPS (Net Promoter Score). With this indicator, you get a clear view of your customers' satisfaction. Although it is an indicator that will require a bit more work, as you will have to survey your members on a regular basis, it is worth it and is quite a friendly way that does not require eternal, and lengthy, questionnaires. Two questions are enough: “Considering your complete experience with our company, how likely would you be to recommend us to your friend or colleague?” And secondly, “What would it take for you to recommend our service?”
3. Leads
How many leads we get per week, the quality of those leads and the outcome of the process is a very valuable indicator for a flexible workspace. Knowing how many leads come in each week, how many are closed in one way or another and above all at what stage the leads are lost will give you a very clear picture of what aspects you need to improve: value proposition, price, website, the physical space itself, or the coexistence of members or atmosphere in the day-to-day.
4. Invoicing per service
Flexible working is a business that, even if you have a very community-focused approach, is essentially real estate. I think it's very healthy for any operator to be aware of how much each square metre you dedicate to a service. Count the space you dedicate to each service: private offices, dedicated desks, flexible desks, meeting rooms. Common spaces should be distributed among all the services in proportion to the percentage of space that each service occupies of the total non-common space.
With this calculation done, determine your turnover for each service and divide it by the number of square metres each service occupies. This will give you an idea of how profitable each of them is. Obviously, these services are interrelated and depend on each other for the flexible workspace to function properly. For example, meeting rooms that are rented to external parties are essential to the day-to-day operations of the members.
5. Costs per service.
As we have done with invoicing above, you must also know the costs incurred by each service. The mechanics to make the calculation are the same, but with the costs instead of the invoicing. The importance of this indicator when combined with the previous one is obvious: it gives you a very clear picture of the profitability of your service and shows you the winners and losers in your service offering. However, as I mentioned a few lines above, you should be very careful before implementing radical changes without observing the daily dynamics of all your members, since a service that is not profitable in itself may be essential for the customers of another service, or offer a touch of quality that makes potential users choose your space instead of that of the competition.
This is, in my view, the simplest approach to gather basic KPIs for a flex workspace that are sufficiently comprehensive for what they tell us to be conclusive enough to answer the question: How is your space working?