Everyone knows how much easier it is to secure repeat business from an existing client or customer compared to earning new business from a prospect. With an existing client, you’ve already surpassed the hurdles of getting them to know and trust you, and you’ve likely become an established advisor or partner vendor.
This being true, many healthcare vendors still struggle to create opportunities or marketing strategies that proactively encourage an existing client to re-engage for additional and even ongoing business. As a result, many vendors end up pouring more resources into chasing new prospects than nurturing relationships and growing their business with existing clients.
However, there’s a giant opportunity for adding value and growing repeat business that exists for healthcare vendors, and it’s hidden in your client list. That opportunity is your client’s lease renewal.
What does commercial real estate for your client’s lease renewal have to do with you, you might ask?
Nothing, Happens Until…
Albert Einstein said, “Nothing happens until something moves. When something vibrates, the electrons of the entire universe resonate with it. Everything is connected.”
When practices save on lease renewals, an entire ecosystem of benefits opens up for medical equipment vendors and service providers right alongside the medical practice. Healthcare practices often reinvest lease renewal savings into their business, in the form of tenant finish improvements, equipment and technology upgrades, additional staff, marketing, or other growth and expansion needs that vendors provide.
Additionally, CARR has found that over 30% of our clients who start a lease renewal process end up deciding to relocate to a new property because a better opportunity was found elsewhere.
A lease renewal event has the potential to trigger a cascade of other industry opportunities, including:
- Lenders generating a new practice loan or real estate financing
- Business bankers obtaining new accounts and providing additional services
- Architects securing a new medical office design project
- General contractors hired for office renovations and build-outs
- Medical equipment suppliers fulfilling orders for upgraded equipment and additional supplies
- Technology providers selling more technology
- Practice consultants hired for a variety of services, such as training, staffing, and more
- Attorneys performing contract reviews
- Accountants consulting for tax planning and investment strategies
- Marketing companies providing new growth initiatives and launching new programs
All of these transactions should be treated as potential opportunities that can be realized when healthcare vendors talk to their clients about their current real estate and upcoming lease renewal.
Diamonds in The Backyard
Lease renewals likely only occur a few times in the life of the medical practice—most healthcare leases are long term, typically ten years—which is why it’s critical that the practice owner realizes every transaction as an opportunity for growth and savings. If the renewal is properly negotiated, practices can save up to hundreds of thousands of dollars, depending on the size of the space.
Far too many owners simply sign their renewal option predefined in the lease without realizing the leverage they otherwise have for savings. Healthcare providers also often make the mistake of negotiating with the landlord themselves and leaving substantial savings on the table due to improper timing, further creating a weak posture and failure to competitively procure other options.
For a healthcare practice to take full advantage of a lease renewal negotiation, they need expert representation. CARR provides that representation, and we do so for free. Our services are provided at no cost to healthcare practices, as commissions in commercial real estate are paid by the landlord or seller. In fact, lease renewal negotiations are the only transaction we’re aware of where the client doesn’t pay for the service but can make money back to reinvest in growth and new initiatives that other vendor partners provide.
Where Do I Come in? and… What’s In It For Me?
As CARR proactively educates healthcare professionals about lease renewal opportunities and saves them a significant amount of time and money, the credit of those savings get passed down to you, the vendor partner who made the introduction to CARR.
In order for us to achieve those savings, we need your help discovering lease renewal opportunities. Here is how you can help:
Simply ask. Either make it part of your scheduled business review(s) with the client or ask in casual conversation. “Doctor, when is your lease up for renewal?” “Are you happy with your location, landlord or present conditions?” “Have you ever considered relocating your practice?” “Have you ever considered purchasing your office space?” These are just a few questions you can ask to start the conversation.
Additionally, you can:
- Share the article by CARR titled “Before You Sign Your Renewal Option”
- Invite them to a CARR Webinar on the topic of lease renewals, either one of our pre-recorded events or a custom webinar done in partnership with your company
- Direct them to our “Free Lease Evaluation” page where they can upload their lease for a free evaluation
If you’re still asking, “What if I’m not fortunate enough to generate new business from a lease renewal?” This is a valid question, and there is still tremendous value to you in the form of reciprocity and loyalty.
CARR has deep gratitude for our vendor partners, and we highly value and give credit for each and every referral. With the completion of a lease renewal negotiation, we send your client a savings summary letter stating, “Without [Vendor Partner’s] recommendation, we wouldn’t have been able to save you $xxx,xxx. [Vendor Partner] is clearly committed to your practice’s success.” This formal credit to you triggers reciprocity, significantly increasing your client’s desire to do more business with you in the future.
You’re also the quarterback with every referral. In other words, if you refer us to a client, we give you the privilege of being the vendor quarterback, calling the shots as to which other vendors are recommended to your client in the process. Your relationships matter, and we want you to maximize relationship equity by having first right to bring other vendors and partners into the deal.
All of this happens as a result of a lease renewal, provided at no cost to your healthcare practice clients. When medical professionals save money in real estate, the ripple effect is realized across many industries and by many other companies.
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