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I’ve seen the future of the high street and it’s in Bideford, Devon!

We’ve had some wonderful staycations this year in Yorkshire, Scotland and Cornwall and experienced some really first-class hospitality. Staying a AirBnB’s is a reminder that you don’t have to book into a big hotel chain or luxury boutique hotel to find people passionate and caring about the service they provide.

Our most recent staycation in Devon was also a reminder that you don’t have to travel to New York or Milan to discover innovation in retailing. In fact, in Bideford it’s right on our doorstep.

Bideford is a historic port town on the banks of the River Torridge in North Devon. In retailing terms it used to be what we called a “Boots and Woollies town”. Steady but unexciting. Of course, Woolworths have long gone and so have most of the multiples. I expected to see lots of empty stores but in fact there seems to be an organic process of change underway which is bringing a new vibrancy to the high street. That’s coupled with an excellent local-authority-run arts and craft market hall at The Pannier Market.

Some of the stores that you’ll want to visit are Josie’s Interiors, Sunshine and Snow  and Hip and Waisted. Let me tell you about Hip and Waisted, a shop that sells leather belts. What’s so exciting about leather belts? Let me share the wonderful experience we had and why this is the future of retailing.

The first thing you notice as you walk into this neatly presented store is the smell of leather, a bright array of colours and Adam, the co-owner working at his bench crafting belts. We were warmly greeted by his partner, Fee and given time to browse. Before I knew it, I’d struck up a conversation about my passion for handmade belts and I was hooked. It wasn’t the case of was I going to buy a belt, it was how many!

An orange/tan coloured belt caught my eye and I was about to buy one off the shelf when Adam said that he had a piece of leather with more detailing and  “would I like a belt made from that?”. He took the skin from under a stack and placed in on the shop floor. To my delight and surprise, he crafted my new belt right in front of me and gave me an unlimited choice of buckles to select.

For those like me who analyse customer experience encounters, why was this so special? The answer is that it met three essential ingredients of a great experience: He got the basics right in terms of quality, choice and price; he made it easy – the belt was ready while I waited – but most significantly, he created a strong emotional connection. We all want to be made to feel special and Adam did just that.

Why is this so important for the future of retailing?

On-line shopping can give us great choice, value and make our lives easy but, at least for now, it can’t create that strong and positive connection with us. You can’t smell the leather online and you can’t speak to the craftsman.

In years gone by we’d think, how can we take this exciting retail concept and make it a national brand on every high street? Let’s put those thoughts to one side and just ask ourselves “what can the property industry do to enable more craft businesses like Hip and Waisted to prosper?”

 

If you’re inspired by Adam and Fee, and excited by the challenge of improving customer experience in your property business, just call me to chat further.

 

Howard Morgan

Founder, RealService

howard.morgan@real-service.co.uk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Sophie Hazeu

A WHILE ago I conducted a post-occupancy study with a number of managing directors.

I was exploring their reasons for choosing the prime real estate into which they had recently moved and the majority of respondents, bar a few who mentioned bike racks and lockers, stated location, rent, rates and square footage as their top priorities when acquiring that particular property in central London.

Sophie Hazeu

Sustainability was on the list but not the top five. No surprise there then.

However, research RealService has carried out recently suggests that seems to be changing and the Road to Cop26 – the UN Climate Change Conference, which Glasgow is hosting in November – is being paved by property companies who are full of good intentions.

That is great, but alongside those who are champing at the bit to refurbish their stock with green credentials are those who feel these costly changes are unfair and unfeasible. Nick Leslau, Chairman of Prestbury Investments, highlighted this in his Property Week article Our Industry is being set up to fail.

‘Carbon neutrality or we will leave’

Nick may have a point, especially when it comes to retro-fitting old buildings. But there’s still an opportunity here and it’s one every property manager should take because during the aforementioned research, on how loyalty impacts on the likelihood to re-occupy, we found that despite good relationships with the landlord and high loyalty to the location/estate, some occupiers stated categorically they would leave at end of their term if their goal of carbon neutrality was not supported.

Consequently, I then began to think about how this high level of ‘Defection Risk’, despite high loyalty, could be identified and then mitigated without having to scramble to achieve the costly changes Nick identified.

We already know that the impact of Covid has produced rapid change in the property market, mainly bringing in hybrid working plans far earlier than previously anticipated. An immediate desire to restructure offices into ‘collaborative spaces’ over desk-based business is, and will continue to be, a huge disrupter for property owners.

A further challenge on the horizon is the increase in weight given to the sustainability of a building as being a prime factor in leasing real estate. This factor is being set out by customers as a clear benchmark – which needs delivering and appears non-negotiable. For some, it’s overtaking the traditional drivers of rent, rate, square footage and service charge.

Create a ‘sustainability champion’

So, it seems property managers have a choice.

They can do nothing and run the risk of losing occupiers for whom carbon neutrality is an important aim.

Or, they can capitalise on this new driver (along with a more flexible lease offering in the short term), by developing sustainable buildings which, in the long run, may enable a higher rate to be demanded.

This is the time to take the sustainability advocate out of the corner, raise their status and create a ‘sustainability champion’ who has a voice.

This champion has a hugely important role in understanding customer perception, and setting their expectations.  This person needs to be able to multi-task.

  • Environmental reports need to be delivered to customers on time (most take six months to deliver an electricity invoice)
  • Reports must be customer-friendly, usable for investors and appropriate for delivering board-level results
  • They must be a trend spotter; what are the latest customer ‘must haves’?
  • They must be able to engage with customers and learn from them whilst managing a realistic sustainability plan. This last point is vital.

So, if the sustainability champion is the means of mitigating ‘Defection Risk’, how can this risk level be identified in the first place?

Defection risk matrix

Working for a major global client, we carried out a number of in-depth interviews and assessed the responses in a Defection Risk Matrix.

This matrix evaluates how effectively ‘loyalty creators’ – like demonstrating empathy and engendering trust  – are being delivered.

We then looked at the ‘loyalty indicators’, to establish whether the customer’s commitment to the landlord, or the property, was strong enough for them to re-occupy against all other factors, such as achieving carbon neutrality in 2030.

Essentially, we were determining whether the customer’s loyalty was enough to mitigate against all the reasons they may wish to leave.

The results enabled the client to identify priority customers where loyalty needed to be enhanced, and therefore the risk mitigated. And, this is where the sustainability champion also comes in; to partner with each customer on their intentions and needs.

We can help you spot customers who would be on your Defection Risk High list. But you can start supporting those for whom sustainability is a key issue right away.

Create the sustainability champion, make sustainability a deliverable goal and keep your loyal customers loyal to you.

If you would like more information on how we can assess your customers’ loyalty, please contact us at info@real-service.co.uk.

RealService, Founder & MD, Howard Morgan will chair a webinar in the British Property Federation’s ‘MyBPF – Digital Series’ on 29th March. He’ll be exploring the customer experience skills gap and how we can ensure our industry has the right skills for the future. Full details and sign up here

https://bpf.org.uk/events/property-s-got-talent-new-skills-required-for-a-post-pandemic-world/

Nurturing a diverse and skilled workforce is a key element of the BPF Redefining Real Estate long-term agenda for change.

Pre-pandemic research by RealService for British Council for Offices (BCO) identified that “the disruptive forces reshaping the way we work call for an equally disruptive response in the way we serve our customers” and that “there is a wide and increasing skills gap in both the quality and quantity of talent able to deliver the customer experience expected by occupiers” The Coronavirus Pandemic has widened the gap and called into question how we educate and recruit in the property industry.

This webinar will explore “What is the mindset and what are the skills that the property industry needs to nurture for the post pandemic world?”

Speakers include

Prof Yolande Barnes
Chair
Bartlett Real Estate Institute

James Ainsworth
Head of Estate Management
PwC UK

Lynne Keenan
Executive Director, Head of Scotland
MAPP

Harriet Jones
Producer
Experience Makers

 

RealService, founder & MD, Howard Morgan, has been appointed joint course director for the new CX in Real Estate – Future Leaders Programme launched by Experience Makers and the Bartlett Real Estate Institute .

Experience Makers is the real estate industry champion for customer experience professional training and research. The Bartlett Real Estate Institute (BREI) is part of University College London’s world-class faculty and the focal point for all built-environment professionals to re-think real estate.

The CX in Real Estate – Future Leaders Programme is the first short course of its kind to combine academic research with industry insight to provide a vital understanding of customer experience strategy in property, and the skills to implement it.

This exciting initiative is the culmination of research and consultation carried out by Experience Makers and partners that highlights an alarming gap between current training and the skills required for a fast evolving and increasingly service-driven industry.

The impact of coronavirus has plainly revealed the property industry’s reliance on its customers. The call for new and improved knowledge on how to create attractive and healthy places that respond to customer need has only increased.

Fellow course director Prof. Yolande Barnes, chair of the Bartlett Real Estate Institute, said: “This new short course is an exciting next step in our journey to explore the richness and diversity of the value that real estate generates.

 “The programme sets out to open minds to new ways of thinking about real estate in the Covid-19 era and will equip students with practical tools to put this into action. Our ambition is to foster a new generation of professionals who see real estate not as a commodity, but as means to deliver an outstanding experience to customers.”

The CX in Real Estate – Future Leaders Programme is aimed at ambitious individuals working in all areas of property and its related fields, who recognise that real estate has evolved and who see themselves leading CX programmes at asset, team or business level.

Initially delivered online via eight units over six weeks, the intensive short course provides participants with a rewarding learning experience, equips them with practical tools to take back to their business and offers the chance to be part of a new alumni of property professionals with a customer mindset.

The CX in Real Estate – Future Leaders Programme is supported by Experience Makers members and developed in consultation with an Advisory Group of leading organisations passionate about pushing the industry forward.

These include The Crown Estate, Get Living, MAPP, Savills and Transport for London. Their involvement ensures that the programme is rooted in real-world aims, actions and successes.

Howard Morgan, said: “RealService was founded 20 years ago with the ambition to transform our industry’s approach to customer relationships. RealService is a proud supporter of Experience Makers with it’s mission to champion education and research in customer experience in real estate. I am thrilled to be collaborating with Professor Yolande Barnes and UCL Bartlett, an academic partner that shares our ambition to rethink real estate.

 “I believe that this programme is an international first and am excited to welcome participants from the UK, Europe and the rest of the world.

 

Following the success of the first programme held in June the next programme will start in November 2021. Information about the next course is available here:

https://www.ucl.ac.uk/bartlett/real-estate/study/short-courses/cx-real-estate-future-leaders-programme-short-course

 

 


 

 

About BREI (+ UCL press office number +44 (0)7747 565 056)

 

The Bartlett Real Estate Institute is a new global institute that is rethinking the traditional view of real estate. We offer MSc programmes, short courses and research opportunities that critically evaluate real estate within its wider societal, economic and environmental context.

 

About Experience Makers www.experiencemakers.com

 

Experience Makers are the real estate industry champions for customer experience professional education and research supported by a network of leading organisations and trailblazing individuals committed to pushing the industry forward.

 

02/08/2021

A Zoom focus group facilitated by RealService as part of the UK Apartment Association’s ‘Build to Rent Festival’ proved that valuable, qualitative feedback can be obtained in a cost-effective, but powerful way.

RealService founder and managing director Howard Morgan brought together a group of five BTR residents, with experience of renting in UK, USA, Europe and Asia, to share a wealth of insight during a well-attended 45 minutes on-line session.

He said: “We would have loved to have been together in one room but the Zoom technology worked a treat and the format could easily be adapted into other residential, industrial and office real estate settings.”

Surprise extras

The participants were given flash cards on which they could provide simple answers or ratings before going on to explain their thoughts in more depth.

Morgan said: “We were able to touch on all the core issues around communication, responsiveness, value for money and potential areas of improvement, but we also got some surprise extras, which you generally would not get from individual online questionnaires.

“Having the group interacting together also meant we were able to reach a consensus on some issues, instead of having five separate opinions.

“For example, the four participants in favour of having an app or portal to log repairs or register deliveries were able to put their case to the one who thought apps cold and impersonal. Hearing the argument from your peers is much more powerful than hearing it from your landlord.

“There was an insightful discussion around what they each wanted from the relationship with their landlord, the amenities they valued and the importance of feeling part of a community, be it within the apartment complex or outside it.

“They also came up with several simple but useful ideas, for example having a one-stop BTR listings website or having a garage-sale service for those moving in or out.

“All in all, it’s a really cost-effective way to get great feedback, which make great use of the power of Zoom”

Challenge perceptions

Sylvana Young, design partner at The Young Group, said the session had produced “genuinely useful feedback that both supported and challenged operators’ perceptions”.

She added: “The panel was real, balanced and informed with a good mix of experience, backgrounds and covered multiple locations.

“There is huge value in understanding what is important to customers. We carry out qualitative and quantitative research ahead of launching a scheme and we monitor customer service through the  living journey. But this facilitated something different as the panellists were able to share and discuss their views to a wide audience in real time.”

Harriet Jones, the producer of online community Experience Makers, co-facilitated the session. She said: “It was really refreshing to be involved in an event which heard directly from residents.

“It seems a really simple but effective way of involving your customers and it was great to receive feedback from the particiopants who enjoyed the chance to share their experiences”

Dynamic experience

Dave Butler, chief executive of UKAA said: “As an organisation, we have been trying to do some online research and was pleasantly surprised how well the session went. The model has great potential.

“The best thing is that is it good to talk to customers live. A survey will get you individual views but that dynamic of having people together gets you views that you can share across the sector. It feels like a much more interactive experience.

“You do have to get the curation right, the mechanics right and there’s a skill in that. You want to keep the conversation interesting, and flowing. A rotated group repeated regularly would give great results.

“RealService has the expertise and innovative skills to maximise these opportunities.”

Ready to focus?

If you would like RealService to run an online feedback focus group with your customers, please contact Howard Morgan (howard.morgan@real-service.co.uk). We can:

  • Identify your needs
  • Contact and recruit suitable participants
  • Devise the discussion guide
  • Facilitate the focus group
  • Draw actionable insight from the discussion

 

About us

RealService is a customer experience consultancy helping our clients create great places to live, work, shop and relax. See more at www.real-service.com.

Experience Makers is a champion for customer experience research and education in real estate. Join the network at www.experiencemakers.com

 

 

By Sue Flatto

We can all see that the pandemic has accelerated some important working trends. There has been an increase in flexibility in terms of where and when people work. Automation of jobs has been pushed forward on the agenda with technology enabled working catapulted into our lives, and the horizon for robots replacing repetitive tasks and use of AI moving even closer.

At RealService, we have been talking with occupiers and observed that, although people who have been forced to work from home (WFH) by the pandemic have found that technology has enabled them to do that successfully, what is missing is the sociability and serendipity of the office. Companies are grappling with rethinking what the office is for. The working models based around most people spending most of their time office based has been shattered and forward thinking employers are going back to the drawing board and building a new model.

Whilst we are still in the midst of the pandemic, it is easy to look at the empty office space and conclude that people want to stay at home to work, and some studies, such as Leesman, show that people think they are more productive and are happy working from home. However, Professor Lynda Gratton, of London Business School points out that there are gaps that employers need to recognise and factor in.  The office also provides opportunity for socialising, networking and creativity. These things are very difficult to do remotely. Bruce Daisley, author of The Joy of Work, and Eat, Sleep, Work, Repeat, agrees that there are gaps that need to be filled when people are all at home, only meeting on Zoom. Those random, chance conversations after face to face meetings and informal brainstorms are valuable to organisations. As this plays out, companies are likely to find that they are missing these vital aspects of working life.

Research done during the Covid crisis says that, not only have people enjoyed working from home but, without the daily commute, they have been able to spend more time with their families and more time working. However, Lynda Gratton suggests that this has come at a price. Some feel isolated and unconnected and many are missing out on chance conversations and random meetings and connections which spawn creativity. It is essential to take on board that employees have their own, individual, experience of WFH and to understand what they are. No two WFH experiences are the same and so no single answer will suit everyone.

Bruce Daisley believes that the ‘Hotelification’ of office space will become the norm with companies forming team hubs that meet in the workspace together at pre agreed times. One thing we can all agree on is that to entice people back, the experience of being in the office needs to be better than being at home.

Another point that needs to be taken into account is ‘Zoom fatigue’. There is a limit to how much the brain can absorb, using this medium. We all need a social break now and again and some human interaction.

So how will businesses move forward?

One pointer for the future comes from  Kevin Ellis, Chairman, PWC who on 20th October 2020 is quoted as saying

“From the messages I get from our people I know that many really value having the option to use an office, whether for a personal or business need. In the longer term it will be important to continue to ensure offices offer people something more than they can get at home, whether it’s working together, innovating or learning. I am sure I’m not alone in wanting this to be the case.”

But not all employers see things the same way and it’s our view that office life will not go back to where it was before the pandemic. Some organisations are already designating employees and long term homeworkers and this trend is likely to continue. Perhaps the term ‘office’ will become obsolete, in favour of ‘workplace’. Businesses will need to re draw what work looks like, and what and where the workplace is. They will need to identify aspects of job roles that can be done at home, and others that would benefit from having people together, at least some of the time. They will need to gather insight into how their employees are responding to the new world.

So as we go through this pandemic, and come out of it, as we surely will, and as future of work emerges, we need to remember that we are inherently social beings and business need to harness the value of social interaction in a way that gives us the best of both worlds. In all of this, one thing is still true – customer and employee experience is everything.

Does your organisation have the skills and insight it needs to navigate its way through this new world?

RealService, like many other businesses has had to pivot our services to meet the needs of our clients during the pandemic, and we have been helping them keep even closer to their end customers.  For landlords, developers and managing agents, this means gaining more insight into the behaviours and emotional needs of employees and finding a way to be part of the solution not the problem.

If you’d like to discuss how you can think differently about the future of your office portfolio, contact:

 

Sue Flatto

Director

RealService

 

+44 203 393 9603

 

 

 

 

 

 

 

RealService is excited to launch the first of our new online training programmes starting with Financial Skills for Property Managers.

This easy to understand course helps explain financial information specifically for property professionals without financial training, giving you greater confidence when discussing financial matters.

This fundamental knowledge will help you feel more confident when dealing with businesses that are struggling, be more in control of situations when presented with financial documents and be able to present a better business case to your management and colleagues.

The course is being delivered by our highly experienced financial training facilitators; David Levenson and Joel Featherman; over four 2.5 hour sessions you will learn to decipher the confusing world of financial terminology with clear and simple explanations of the fundamentals including how to read and interpret profit and loss accounts, balance sheets and use financial ratios to assess the health of a business.

Further information about the programme and to register for the course is available at course details

** Early-bird rates available now! **

 

It’s 2020 and here at RealService we’re celebrating our 21st birthday ……..the perfect time to dust off some past predictions.

When we launched the business on 2nd January 1999, we were greeted by the industry with a mix of encouragement and incredulity. “Advising on how to treat tenants as customers – how are you going to make money doing that?” asked one doubtful Prop Co CEO. Fortunately, others were less sceptical.

We’ve proudly made a name for challenging the industry with disruptive thinking and ten years ago published our 10 point “2020 Vision” for the future of customer service in the property industry.

How times have changed since then! Just look at this ringing endorsement of the customer-focused approach from Stephen Hubbard, CBRE’s chairman, retiring after 43 years in the business (source: Estates Gazette).

I would counsel against anybody getting into capital markets without having gone through the occupier side of the business…. unless you understand how an occupier thinks, how are you going to reflect it in what’s going to be a decent long-term investment?”

At RealService, we’ve proudly championed the simple notion that occupiers drive value and we’re excited to be entering a new decade. We’ll soon be revealing our Vision 2030 but first, let’s see how our 2020 predictions (made in 2009) have stood the test of time.

 

RealService Vision 2020 predictions

1. Property companies will become recognised brands

Ten years ago there were no real estate owners in the top 100 global brands and, in truth, there still aren’t any. https://www.ft.com/content/3a3419f4-78b1-11e9-be7d-6d846537acab

But what this list doesn’t reveal is a considerable effort that property owners have taken in the past 10 years to build their reputations. Today’s property companies and investment managers recognise that reputation matters to occupiers, investors and the wider community.

At RealService we help some of the largest property owners and managers in the world to track and benchmark their customer loyalty through our RealService CX Index which gives them in-depth insight into how their brands are perceived.

For further evidence of the importance of reputation just look at the growth of GRESB over the past 10 years. Back in 2009 APG, PGGM and USS came together with the University of Maastricht to design a real estate survey. They wanted more transparency on the ESG performance of their real estate investments and closer engagement with their managers. The inaugural Real Estate Assessment was launched in 2009, and GRESB was born. In the years that followed, an entire industry has come together to develop a common language and consistent approach to measuring and reporting on ESG performance. Today, more than 100 investors, representing over USD 22 trillion AUM, encourage their managers to report to GRESB, and the resulting Real Estate and Infrastructure Benchmarks cover more than USD 4.5 trillion in real asset value.

RealService is proud to be a GRESB partner and you can read about our recent joint event hosted by The Crown Estate here.

RealService has been tracking how Europe’s leading investors and listed property companies are presenting their brands to their customers and investors for the past 8 years. We have trawled their websites and their report and accounts documents and will be publishing our findings shortly.

At a micro level it’s fascinating to see how emerging sectors like Build to Rent residential are working on brand building. There is an active battle to build a consumer facing brand. Businesses like Get Living, Essential Living, Tipi, liv, urbanbubble and Go Native, are striving to win brand recognition.

2019 was the year of brands in the office sector with our clients Landsec launching new flexible office brand, Myo, offering leases ranging from 12 months to three years for businesses that need space for between 15 and 80 people. British Land continued to expand Storey, and The Crown Estate launched its first flexible office space at One Heddon Street.

Of course, 2019 will be remembered as the year that emerging global brand, WeWork, flew too close to the sun. A salutary reminder that a sustainable reputation must be built over time and on a firm financial footing.

Vision progress score: 6 out of 10

 

2. Property businesses will be better understood and valued for their consistently high level of service

There’s some progress here too as we move from a passive to operational style of asset and property management. You’ll hardly find an analyst presentation that doesn’t make reference to what a propco is doing to enhance relationships with occupiers and how it is working to create “great places”.

A good number of our clients like The Crown Estate, SEGRO and Great Portland Estates publish their customer service performance based on independent feedback gathered by RealService.  But there’s still some way to go before commercial real estate is valued not just based on income and bricks and mortar, but also on the loyalty of its customers. We expect loyalty indicators such as Net Promoter Score (NPS) to become even more widely adopted in the coming year.

Vision progress score: 5 out of 10 

 

3. The property industry’s customers will be more knowledgeable with information at their fingertips to help them make informed decisions about which suppliers are best

It’s more than ten years since review sites like TripAdvisor began to get real traction and peer reviews taken seriously. In the USA, websites such as www.apartmentratings.com, founded at a similar time to TripAdvisor have become the must go to site for renters.

The UK market has traditionally followed the USA and the launch of HomeViews www.homeviews.com in 2019 in the UK is further evidence of increasing transparency. As Homeviews says “One of the biggest decisions we ever make, financially and emotionally, is choosing a home. Our mission at HomeViews is to share useful, trustworthy insights about residential developments to support you in making that decision.” The site has gained impressive traction in its first year.

Another rapidly growing indicator is WiredScore whose certification helps occupiers find office space that will fit their current and future connectivity needs.

Vision progress score: 5 out of 10

 

4. Service quality and performance will be measured on a consistent basis across the world

The last 10 years has seen huge progress in terms of the standardisation of performance measurement in the areas of sustainability, wellbeing and workplace. At RealService we see the potential to extend this approach to evaluate the service quality and performance of buildings in all sectors. In 2017 we launched the RealService Customer Experience Index which is designed to enable our clients to compare their performance with best in class. We’re motivated by the vision of a worldwide standard for service performance and see this emerging as global investors become more demanding of information about operational service performance.

We’re excited to see the GRESB benchmark extend its reach into the measurement of social impact and looking forward to collaborating as partners.

RealService is also working with industry network group, Experience Makers www.experiencemakers.com to develop a series of new indicators to help measure the return on investment in customer experience (ROX). We believe this will help our clients make better decisions about where to invest to make the biggest impact of customer experience and loyalty.

Vision progress score: 5 out of 10

 

5. The products and services offered by the real estate industry will become more clearly defined and differentiated as opposed to an amorphous mass where one size fits all

Looking back 10 or 20 years the typical property owner or developer was opportunistic and with notable exceptions, not sector focused. The last recession highlighted the dangers of dabbling in sectors where you have no specific customer knowledge. Since then we have seen the emergence of sector and sub-sector specialists in the mainstream product areas like offices and retail and also in new sectors such as healthcare, student housing, self-storage and even caravan parks. The residential sector has led the way with a whole range of new products – live-work, co-living, retirement etc.

As real estate transitions from a brick and mortar business to a customer experience industry we are seeing this trend accelerate.

Just when you think you’ve heard it all, how about this innovative new property sector from California. Bisnow is currently promoting an event called “THE SOCAL CANNABIS CRE EVOLUTION – The event explores “ where are institutional investors looking as California continues to cultivate innovation centers, coworking cannabis spaces, and trends in cannabis retail offerings?” https://www.bisnow.com/events/los-angeles/the-socal-cannabis-cre-evolution-3359

Vision progress score: 7 out of 10

 

6. Relationships between property suppliers and customers will prosper in line with other industries i.e. founded on a partnership style of doing business where mutual understanding/symbiotic relationships exist

A couple of years back I visited the John Lewis National Distribution Centre at Magna Park, Milton Keynes. I quickly learned that the graduated blue and white cladding is just a wraparound for the automated handling systems provided by JLP’s Austrian equipment supplier KNAPP. It was the most impressive example of supplier partnering that I had seen in ages: a symbiotic relationship that serves the ultimate customer brilliantly.

Our vision remains that occupiers and their property suppliers will one day have a similar degree of mutual dependence. We increasingly hear occupiers tell us that they have a preferred list of landlords / developers / property managers that they like to do business with. Our clients are spending far more time and resources researching the needs of occupiers and of the end users of buildings.

We expand on our vision in this article authored with Jon Lovell of Hillbreak. http://www.real-service.com/the-civil-partnership-solution/

Our research with major corporate occupiers indicates that they are finding its far easier to forge partnership relationships with the new style flexible office businesses like The Office Group, Fora, IWG and WeWork than with traditional office landlords.

It will be interesting to see the impact of the initiative by LGIM Real Assets (Legal & General) to establish a new innovative operating model for managing its buildings, which it claims will “help disrupt the property industry, maximising the performance of investments and developing stronger occupier relationships.” https://www.legalandgeneralgroup.com/media-centre/press-releases/legal-general-shakes-up-property-management-industry-with-new-operating-model/

Another example of the partnership approach is The Crown Estate appointment of JLL as managing agent to its entire Central London portfolio. Commenting on the appointment James Cooksey, Director of Central London said:

We believe that working closely in partnership with a single managing agent will enable us to better collaborate and drive efficiencies to improve quality, consistency and encourage innovation.”

Vision progress score: 5 out of 10

 

7. The property industry will become more transparent about the way it does business and the costs of doing business

Feedback from occupiers tells us that the industry still has a long way to go before it is as easy to do business with or as transparent as other sectors. We’re excited to see some real innovation coming out of the PropTech sector and it’s refreshing to see many new entrants challenging the traditional way that, for example, real estate transactions are conducted. There’s also been a lot of progress in the residential sector to streamline the process of renting an apartment with a new law banning the charging of letting fees to applicants, with paperless leasing and pre-qualified financial checks.

Service charge costs and a perceived lack of transparency continue to be the bug bear of many occupiers. This is particularly acute in the retail sector where even the likes of John Lewis & Partners have signalled their distrust in the system with a threat to take unilateral action if costs are not reduced. There is continuing concern about insurance commissions too.

Vision progress score: 5 out of 10

 

8. The property industry will move from being self-focused to being obsessively customer inspired

At RealService, we’re fortunate to work with many of the most customer focused property investors, developers and managers. The fact that our business is growing is evidence that the industry is investing more in customer research, improving skills and changing cultures.

In the last 24 months, we’ve seen the focus of our clients’ attention move from simply satisfying customers at a “business to business” level to providing a great customer experience to all those who shop, work and live at or around our clients’ real estate. In essence the real estate customer challenge has become no different to any other “business to consumer” industry. This calls for new skills and talent and we’re excited to be helping our clients to make this exciting transition.

This change in business focus requires our industry to make a huge cultural shift. We have identified a significant skills gap and explore this in our latest report for British Council for Offices http://www.real-service.com/alchemists-hold-the-key/

Vision progress score: 6 out of 10

 

9. The property industry will play a leading role in demonstrating how industry in general can minimise its impact on the environment and actively work with its customers to minimise their impact too

This is a particularly strong area for our sector and we have seen some outstanding examples of best practice. A quick look at British Land’s website shows the wide range of environmental initiatives and targets that are typically being followed.

RealService is a GRESB partner and we are looking forward to working with GRESB to increase the focus placed on occupier engagement as part of a responsible approach to property ownership and investment.

An important industry commitment was unveiled by the UK Green Building Council (UKGBC) in 2019 including a framework for the UK construction and property industry to transition new and existing buildings to become net zero carbon by 2050, in line with the ambitions of the Paris Climate Agreement. https://www.ukgbc.org/news/uk-green-building-council-presents-industry-framework-for-net-zero-

Vision progress score: 8 out of 10

 

10. The property industry will develop a clearer understanding of the link between adopting customer service strategies and performance

This has always been one of the Holy Grail topics for our industry. While the intuitive case for treating tenants as customers is strong, we can now point at the academic research by Dr Danielle Sanderson for quantifiable evidence. This PhD research co-sponsored by RealService and the Lord Samuel Memorial Trust has identified a 1.9% total return loyalty bonus which can be achieved by increasing customer satisfaction by one whole point on a 5 point scale.

Dr Sanderson is a consultant at RealService and we are working with clients to use big data techniques to better understand this important link and to be able to use customer feedback as a predictive tool of occupier behaviour at future lease expiry or break.

The next stage of our work is to be able to more accurately measure the return on customer experience (ROX) at an individaul asset level.

Vision progress score: 8 out of 10

 

How are we doing? –  2020 and beyond

If you add up the progress scores you’ll see that the industry is close to 60% of the way to achieving the 2020 Vision we set out 10 years ago.

We’re very proud of our work over the past 21 years and would like to thank all our loyal clients, colleagues, collaboration partners and industry friends for your support.

It’s time to look forward to 2030 and we will shortly publish our Vision 2030 which will be even more stretching and entirely shaped by what customers want.

We’re looking forward to playing our part in the real estate customer experience revolution in 2020 on beyond.

Can we help you?

If you’re interested in chatting about how you can capitalise on these trends in your own property business please give us a call +44 20 3393 9603.

STAKEHOLDER engagement is becoming a key area for GRESB assessment and the ability to deal with stakeholders – clients, customers, occupiers, tenants (call them what you will) – has become a key skill for anyone in a client-facing role.

Investment managers – for whom customer has previously meant investor – are coming around to the view that the definition is now much broader than that.

However, there is a widening skills gap which has become especially yawning in the office sector where the disruptors have had a field day shortening leases, providing excellent customer experience and pretty much doing away with the service charge.

This prompted the British Council for Offices to commission customer experience consultancy RealService to carry out a major piece of research.

The BCO was interested in how the office sector, and primarily its property managers, was dealing with the new emphasis on customer experience and how businesses were going to retrain, retain and recruit staff who were suited to this new world order.

And while the full report is an excellent read (The Customer Experience Revolution Closing the Skills Gap) and can be download for free via www.bco.org.uk, one of the areas thrown up by our research was how diversity – or the lack of it – was impacting on the recruitment and retention of the sort of staff best placed to thrive in a customer-first, space-as-a-service industry.

All the companies we interviewed had policies around equality and expressed that they were doing their bit to help change the image of the property industry from ‘male, pale and stale’ into one which better reflected the industry’s customers.

It was a similar story in terms of inclusion. Behind the rainbow-themed Twitter logos and lots of posts on mental health awareness, especially during Pride/Mental Health Awareness month (or similar), there is clearly some good work going on.

However, we found two ongoing issues.

  • First, the production line for those going into the property industry still (in the UK anyway) usually begins with a “relevant” university degree (as emphasised by the Royal Institution of Chartered Surveyors)
  • Second, even as the universities do their best to attract a wider range of undergraduates, once that production line reaches the leading property companies even the most diverse of candidates becomes moulded into the old-fashioned, traditional system

As the report found:

The road to diversity is not yet well trodden; those with great customer service skills are not being attracted into the property industry, which still predominantly recruits from traditional universities offering ‘relevant’ degrees. Property management is not perceived as attractive an option as investment or asset management.

There are alternative routes into the property industry which might attract more women or black, Asian or ethnic minority candidates and there are many examples of best practice.

However, while major companies run apprenticeship schemes (there’s a government levy on larger businesses), they are not major areas for recruitment. Indeed, there is no guarantee an apprentice who completes their qualification while working at a property company will be offered a job there.

“There is a welcome drive to increase the diversity of students coming into the UK property industry,” we say in the report.

“Property Needs You and, especially, Pathways to Property, with its emphasis on state-school recruitment, are doing their best. RICS, too, is endeavouring to widen its base and overcome what it calls the ‘unconscious bias of middle management’.

“The need for increased diversity at entry level, in recruitment and career development underpins any attempts to close the skills gap.”

We concluded the conundrum around this skills gap, and by extension the lack of diversity, needs a radical solution.

So, property managers of the future must be alchemists, with a combination of base skills – customer service, technology, business and marketing to name a few – which can be turned into CX gold. While some technical knowledge is still required, property management no longer revolves around bricks and mortar. In fact, the term ‘property manager’ is obsolete.

Alchemists will not come into the property industry via traditional routes. They will have a wide range of degrees and come from a wide variety of backgrounds. They will be capable of disrupting the disruptors. Currently, they are being plundered from the hospitality sector and are providing the sort of customer experience which keeps occupiers happy and the rent coming in.

And that will be music to the ears of investment managers.