Hi Oshen,
You are experiencing the challenge of balancing good business with good behaviour to your fellow man. Congratulations for seeing the fact that they can and do exist side by side, and are not mutually exclusive. As a the manager of a retail business, I am often beset by the same question myself. Although a complete newbie to the property apect of these columns, and reading and learning as much as I can from more experienced investors like yourself about property specifically, I would like to offer you the following ecouragement with this Customer Service issue. You are running a business- Fact. You want to be fair and kind to your Tenants- Fact. You seem not to percieve this as an adversarial situation- Fact (and an excellent customer focus too.) In my business it is the service I give my customers which far outweighs the price of my products. A business which focusses all it’s attention on selling for the cheapest price is setting itself up for a fall. I tell my crew to “Always mind the customer, and the sales will mind themselves.” This is not done in a blind manner, however, because some people just want the cheap price. These customers generally show little loyalty to any supplier of products and services, and will switch as soon as it suits them to do so. A long term loyal customer continues to be an ongoing source of revenue, in some cases for many years. As long as the business is running at the appropriate levels of profitability, it is a win/win.
Some customers take bad news better than others, it is true, but your own approach is the key. When dealing with customers on difficult issues, if you expect them to be unreasonable, 9 out of ten times they will be. But if you expect them to be sensible, fair, and reasonable, then 9 out of ten times they will be! Might sound a bit far fetched to some one not involved in sales, but- this is what I do, and it works.
I’m sure that if you take time to prepare your information before discussing the needed rent increase with your customer, and include the information that you enjoy having them as your customer and wish to continue the relationship, but contrast what will be required fiscally if the property continues to run at a loss, you will maintain what to a complete property novice like me seems to be a very valuale asset- a loyal, happy, and income producing customer.
Good luck, and all the best
Jim