Coworking spaces can’t be measured by the business performance metrics that one might use to assess a traditional office. One reason is that open concept layouts are not conducive to measuring people assigned to specific offices, desks or other spaces. Coworking space key performance indictors (KPIs) are needed to help decide what amenities and services to offer clients, as well as finding ways to target new and prospective clientele.
To understand what KPIs work well for coworking providers, read on:
New approaches to measuring occupancy
To ensure more accurate KPIs than “cost per person,” a coworking operator must look deeper within the space. The most important factor to consider is that coworking spaces are more agile, with an emphasis on dedicated workstations vs. shared spaces.
Within the agile work environment, consider tracking these additional space utilization metrics to further improve business efficiency:
- Daily peak utilization: What is the maximum number of people utilizing the space in a given day?
- Daily peak utilization by business unit: What is the maximum number of people from a specific business or organization utilizing the space?
- Average peak utilization: What is the maximum rate of usage within various periods of the workday?
- Frequency of peaks: How often is the peak usage of the workspace reached throughout the month? This can be used to detect similarities and patterns of usage.
- Assigned ratio per building or group: How do you determine the ratio of guests assigned to a specific seat? It’s best to compare this with the actual ratio of guests using the seats.
With a more agile workplace, it’s important to measure utilization considering the level of collaboration within the space. By measuring how members work together within a shared space, you can see how the space is being utilized in totality, providing insight on where to make improvements.
Strong community engagement should lead to an increase in the following categories:
- Usage of group work areas
- Conference room bookings
- Video conferences with members from different regions
- Collaboration among virtual users
- Usage of phone booths
These are all pretty self-explanatory. The higher the metrics are for usage of conference rooms, group spaces and phone booths, the easier it is to determine the space’s needs and performance.
Decreasing tenant churn
One of the biggest factors elevating thriving coworking spaces is the ability to decrease churn rate (member turnover). For consistency and best results, calculate it on a quarterly basis.
Simply adding a month or two to the average membership duration can lead to an impressive revenue jump. According to the 2019 Global Coworking Survey by Deskmag, about 78% of members plan to stay at their current space for at least another year or have no plans of leaving at all. That represents a slight increase from 2017 and 2018.
Take note of the following metrics for retention:
- Number of new members per month
- Rate of member retention: the percentage of renewing members per month
- Conversions per marketing channel: users signing up via online post, print advertisement, word of mouth, etc.
- Average member lifespan per channel: how long a user that comes from an online source usually stays vs. other channels
- Average revenue per member per month: total revenue from memberships divided by the number of members within the workspace — this can also be segmented by business/organization
- Cost of acquisition per medium: ideal for measuring marketing strategies
Clearly, it’s more than just the raw number of members or total revenue. If more members are inquiring about location via social media posts or ads, then invest more in that medium than an ad in the local newspaper, for example.
Location, be it a large urban area, a suburban area or a small city, will influence the metrics. For instance, coworking in New York City could prove to be much more expensive for the member as well as the operator, but there are countless more competitors there than in Wichita, Kansas. Average member lifespan could decrease, while overall new members per month may increase.
Factor in location and account for it when determining what a successful month or year looks like.
How to measure KPIs
To measure these statistics we recommend using a workspace management platform that can best assess this data. Using a software like Yardi Kube, you can deduce exactly what metrics to adjust to keep members longer.
For instance, measuring daily and average peak utilizations via a spreadsheet could prove inaccurate and time consuming. The right coworking software could generate it in seconds and, by segmenting usage per business, reveal a clearer vision of member demand within the workspace.
When looking for the best KPIs for coworking space management, keep in mind the agility of the workspace as well as when to deviate from using measurements specific to traditional offices. Look for deeper insights into occupancy in terms of usage and the engagement of services within a shared or communal workspace, as well as methods for decreasing member churn rates.
For more information on how Yardi Kube can transform workspaces for greater productivity, please click below.