The call center model has a singular purpose: to incentivize customers to stick to a set of standardized options.
By framing a change request in this way, the tenant takes ownership of the delays rather than the landlord.
The relationship between tenant and landlord is a tenuous one. Both parties seek to minimize liability, which frequently leads to conflict. And conflict, as we all know, leads to unhappy customers. While it may not be feasible to avoid conflict altogether, there is one relatively simple step landlords can take during the lease negotiation process: adopt the Call Center Model.
In the lending world, Principal Financial offers an ideal example of how the Call Center Model should work in practice: they have standardized “gives” that their business units can easily offer to borrowers. But when a customer makes a request that deviates from the standardized set of terms that Principal Financial offers, the customer is informed that their request needs to be escalated and undergo a lengthy legal review, adding an additional 2-4 weeks to the lending process.
This delay forces the borrower to step back and ask, “Is my request really worth the delay it will cause?” More often than not, the borrower concludes that cost of holding out for a relatively minor change isn’t worth the delay it causes. In other words, it forces the customer to do a cost/benefit analysis about whether or not their request makes a material difference in the long run. And in most cases, the cost of the delay far outweighs the benefit.
In the leasing world, tenants typically aren’t faced with the same cost/benefit analysis. It’s relatively common for a tenant’s attorney to mark up a document until their pen runs out of ink. From their perspective, the worst-case scenario is that the landlord’s attorney rejects the edits and both parties continue to negotiate. The hard work of wading through countless proposed modifications to determine what is and is not reasonable falls squarely on the landlord’s legal team.
By applying a Call Center Model to the commercial leasing process, the landlord is able to effectively tell the customer, “I’d be happy to make that change, but since it is a deviation from our standard terms I need to submit your request to our legal team for review. That process takes an additional X weeks. Is that OK?”
By framing a change request in this way, the tenant takes ownership of the delays rather than the landlord.
This may not work for every lease—sometimes the property owners don’t have enough leverage—but for smaller, cookie-cutter deals where the real estate company has significant leverage it’s very effective. Bottom line: encouraging tenants to accept standard terms has the potential to eliminate much of the back and forth during negotiations, resulting in a significant reduction in the time it takes to go from LOI to close.
BONUS: because the Call Center Model shifts the cost/benefit analysis to the tenant, it offers landlords a friendlier way to say ‘no’ without actually saying it; boosting customer satisfaction and starting the relationship off on the right foot.
Call Center Model + Lease Automation = A Perfect Match
An automated lease-drafting solution like LeasePilot dovetails seamlessly with the adoption of a Call Center Model for negotiation. Leasing reps and other non-lawyers can generate lease drafts using their company’s own boilerplate language in minutes instead of hours.
To show what this means in practice, consider a TI Allowance. Adding a TI Allowance is as simple as clicking a button, entering the amount of the allowance, and selecting how it gets paid. The lease draft automatically updates in multiple places simultaneously and with the correct language updates, calculations, and formatting applied. Pretty neat stuff.
Now, imagine using this kind of automation on all of the 100+ lease concepts and alternatives that a real estate company uses for first and subsequent drafts. The advantage is monumental.
