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RealService, the customer experience consultancy for the real estate industry, is delighted to welcome Justine Johnson in the role of Associate Director, with special responsibility for creating new products and services, and business development.

Justine joins RealService from advertising company Grey London, where she held the post of Group Business Director, working with a wide range of brands including Volvo, VW, Virgin Atlantic, Bose Global and GSK.

Howard Morgan, RealService Founder and CEO, said: “Justine joins RealService at a time of significant opportunity for the firm. With 23 years’ experience in CX insight, training, and consultancy, we are ideally placed to help the real estate industry through a period of dramatic change. We’re not resting on our laurels and excited to be attracting the next generation of talent to the company.”

Louise Freethy, RealService Director and COO, said: “Winning and keeping occupier customers has never been more important to our clients. Justine’s experience gained working with blue-chip companies around the world will be immensely valuable, enabling us to bring customer experience solutions from within and outside the property industry.”

Justine said she was looking forward to her new role.

“I was looking to join a company with a strong sense of purpose operating in a sector where I can make a real difference and believe that I’ve found that in RealService,” she said.

“The real estate industry is undergoing a revolution in the way it thinks about its customers. I’ve seen this kind of transformation happen elsewhere and am excited to have the chance to bring my experience to RealService clients.”

This announcement follows Howard’s recent appointment as an Honorary Professor at the UCL Bartlett School of Sustainable Construction. Howard will continue to provide strategic consulting advice to RealService clients while pursuing his interests in real estate education and as a trustee of a mental health charity.

Louise, who recently celebrated 18 years with RealService, will be extending her leadership responsibilities in the coming months as the firm implements its succession plan.

Director Sue Flatto is to become an adviser to RealService from May 1, stepping back from her day-to-day involvement in client projects.

 

About RealService

RealService helps our clients to improve leasing, retention and loyalty by creating a better experience for occupier customers. Our services include customer insight, customer experience consulting, skills training and networking.

 

For more information contact:

Howard Morgan, Founder & MD

howard.morgan@real-service.co.uk

RealService is delighted to announce that our Founder, Howard Morgan, has been conferred with the title of Honorary Professor at the Bartlett School of Sustainable Construction at University College London (UCL).

Picture of Howard Morgan
Howard Morgan, Founder, Real Service

The appointment recognises Howard’s pioneering work in the field of customer experience and real estate over the past 30 years.

The Bartlett School of Sustainable Construction is an international centre of excellence in the teaching and research of project management, real estate and economics.

Speaking about the appointment, Howard said

“I’m very proud to receive this honour and looking forward to contributing to the development of this new field of real estate education and research.

The real estate industry will need to develop new skills and to attract a far more diverse pool of talent if we are to respond to the challenges imposed by pandemic and climate change. I’m excited to be working with an internationally recognised School which can bring fresh thinking to this challenge.”

Howard’s appointment builds on his role as course co-director with Professor Yolande Barnes to launch the ‘CX and Real Estate – Future Leaders Programme‘ at the Bartlett Real Estate Institute (BREI).

Professor Yolande Barnes said

“I’m delighted that Howard’s real-world expertise in this critically important area of real estate will be available to our students at the Bartlett.”

Howard will continue to provide advice on customer experience strategy to RealService clients who include leading investment managers, real estate investment trusts, landed estates, professional firms and professional bodies.

 

For more information contact:

howard.morgan@real-service.co.uk

 

 

 

 

 

 

 

 

 

 

 

RealService Founder, Howard Morgan, recently spoke at the Navigator Forum organised by  CGA 

A report of his presentation is available here and reprinted below with thanks to Chris Garthwaite and Carla Hall at CGA for the invitation.

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Introduction

Cities around the world have seen a fundamental change in the way we use property and real estate. As with many of the seismic shifts since March 2020, this was a trend that was already in motion pre-pandemic, but Covid-19 has escalated the evolutionary process.

While change presents challenges for commercial property owners and those in businesses that hinge on real estate (not least UK pensions, which are underpinned by property), it also presents opportunities as well. So, how can businesses adapt their thinking to create a customer experience worth paying for in 2022 and beyond?

What’s changed in real estate?

The overarching change is that we simply are not using commercial property in the way we were five years ago. Remote working is perhaps the most obvious change that has occurred, with digitisation opening opportunities for people to live and work beyond the overpopulated and highly priced realms of major cities.

Remote working was a creeping trend that has leapt forwards, with many wishing to continue working from home all or part of the time going forward. It opens all kinds of opportunities, ranging from ‘levelling up’ income and local spending across the UK to providing more job opportunities for anyone who can’t travel into the likes of London and Manchester on a regular basis.

While there may be some friction between businesses and employees as to how the remote working model plays out in the long-term, as of September 2021 50% of British employees are still working from home at least some of the time. That’s up from 37% before the pandemic. The change has prompted technology to advance in order to improve the remote working experience. Last month alone we saw Facebook showcase their haptic glove prototype, allowing you to feel objects in virtual reality.

It’s not just offices, however, that are seeing changes. The high street has been under ‘threat’ since the dawn of the internet, and the challenges of the last two years have meant that anyone who hadn’t changed their shopping habits to the digital realm has now been largely forced to. As a result, shopping centres and brick-and-mortar stores are suffering.

Even rented housing and apartment buildings are facing enormous change in cities (linked back to remote working). As people realise that they are not bound to urban areas, landlords find themselves competing for tenants in a way they have never had to before.

We are at a moment of profound change and for lots of businesses that’s a daunting prospect, but it’s not a situation that has never occurred before. For example, one might see both an industry and society parallel in the colliery closures and ensuing miners strikes in the 1980s. They, too, were a way of life, impacted entire communities, were linked to the very essence of how the country was run, and had the capacity to make entire businesses irrelevant in a very short space of time.

Reimagining the proposition for commercial property

Against this backdrop we need to change the way we think about commercial property. What is it for? How is it used?

Since 2002 Barclays has been selling off its office buildings and leasing them back. Large city apartment buildings have been plagued by scandal and a loss of trust post Grenfell, and shopping centres are floundering. For example, Bluewater’s 30% stakeholder, Landsec, is currently in talks to buy Lendlease’s 25% stake for £200m. That would represent an overall value drop of around £800m over the past three years.

That said, we are seeing a repurposing of those buildings and the way they’re used for work, life and leisure. What businesses need to think about is how to provide services that enhance experience in these environments.

Space as a service

In offices, stats show that typically just 2 out of 10 corporates are satisfied with the services they get from landlords. So, the old is being outshone by the new, as ‘space as a service’ providers like WeWork capture the mood and gain 9 or 10 out of 10 in customer satisfaction surveys.

The shift in our approach to commercial property comes down to two things: service and experience. Office and apartment buildings are shifting from a focus on ownership to the monetisation of services. That includes physical space as something people consume according to need. That might be in the likes of WeWork or student accommodation providers like Unite Students. These are no longer places to simply crash for the night, they provide tea, coffee and services that enhance the experience.

The tenant as the customer

In apartment buildings, landlords are being called out for abusing power (only recently, Luke Johnson wrote his piece ‘Time to end the abuse of tenants’ for The Times). There’s also a rise in pressure groups like Guardians of the Arches, calling for tenants to be treated as valued customers.

One example that Howard highlighted, was from Quintain Living. Their lifestyle focussed rental company has been developing an area outside Wembley, producing something colourful, imaginative and experience focused. It includes a rooftop community space on the 14-storey residential tower, as well as two floors of office space which tenants can use free of charge. What they’re delivering as a result is not just a roof over your head, but a community that’s nice to live in. There are camper vans on the roof, which can be offices for the day, colourful post boxes and hot tubs – the emphasis is on the experience.

In many ways this is forward thinking. However, one contributor pointed out that in other ways, this emphasis on community is a throwback to the way continental Europe structured its communities in the past, with commercial premises on one floor and housing on another. There is inspiration to be drawn from the past as well as imagining the future.

Training and behaviour

The missing link between reimagining the way we use commercial property and executing those plans successfully is a combination of skills and strategic capabilities.

A mindset change

In the first instance, it’s about a mindset change. For a long time, those who have owned or managed property, have had the luxury of not really thinking about the customer and their experience. Property has been in demand, so landlords have been able to command high fees without providing any service. Now, commercial property owners find themselves in a position where it needs to give people a reason to come to them – they need to think about the customer experience.

It’s a way of thinking that the hospitality industry has understood for generations. CGA’s Graham Ryan recalled living in an apartment building in the USA, where the concierge added enormous value to each tenant by knowing everyone’s name, always saying ‘hello’, and being engaging. The community loved him, and 26 years later, he remains a positive memory of that experience. That individual and his customer service created value for that asset.

It is a mindset that forward thinking businesses are seeing tangible benefits from across the board. For example, researcher Dr Danielle Sanderson investigated the determinants of satisfaction amongst tenants of UK offices. She found that if you can increase satisfaction by one unit on a 1 to 5 scale, you can increase total returns by +1.9%.

New skills and training

For many businesses this will require a change of perspective, but ultimately that’s driven by introducing different skillsets at a top level, and training to make sure that those values are then reflected through the different customer touch points in the business.

A contributor noted that it’s essential for teams as well as leadership to be inspired to this new way of thinking. She said that staff need to be taken on the same journey as leaders through appropriate training and mentoring. It was felt that if teams are not involved in that transformative process towards customer experience, then they will naturally pivot back to what they know.

It was highlighted that traditionally, the recruitment process into the property industry has focused on chartered surveyors, but those qualifications and courses don’t cover customer service or customer experience. They are transactional. Unless those individuals are naturally inclined to service, they won’t have the necessary skills to address customer experience. They must be generated, taught and trained.

With that in mind, we are now seeing more and more jobs available for a Head of Customer Experience, and training providers are catching on. For example, UCL has launched a short course titled CX in Real Estate – Future Leaders Programme.

One contributor, whose company is in property investment, said that they have moved from a one size fits all approach to a one size fits one experience approach. They have pivoted the business so that everything is consumer centric. Where a landlord might have traditionally only had contact with a tenant when a three-year tenancy agreement came up for renewal, there’s now a property management layer that’s about knowing the customer and ensuring they want to stay. The question they ask themselves is ‘how can we be Ritz Carlton for living, office space and logistics?’ The Ritz Carlton has its own centre of excellence, so they are creating a similar capacity in-house to ensure staff training.

The gap in strategic capabilities

In addition to training, there’s the question of what a more experience focused approach to the property industry looks like and what businesses need to factor into their budgets and capabilities to make that happen.

Pastries and ice creams

One contributor works with a landlord who had worried: ‘We can’t supply enough milk to our office building!’ It’s a new issue for landlords, but as they are now providing tea and coffee making facilities, the logistics around milk and how much they needed becomes something to think about. The same landlord had questions about their Danish pastries – were they too big? Should they be providing them at all?

Whether it’s pastries or luxury toiletries, in many ways such an issue seems trivial, but when it’s done to scale it is both a budgetary and logistics consideration, the likes of which hoteliers and brand consultants have been thinking about for decades. There’s a need to decide what’s required, when, how much, how it’s being delivered, how waste and cleaning are to be managed. It’s also about measuring the impact of these small details on the customer experience so you know what to change, increase or decrease.

Historically, no budget would have been put aside for these experiential factors, even if the thought had been there to implement them. Now, the property industry needs to incorporate them into its thinking. The service charge system in the UK has meant that’s where the budget is set. Most properties have a budget line for letting but they don’t have a line item for customer retention.

One contributor remembered suggesting to the owner of an office building that they give ice creams to all the occupants if the air conditioning system went down. The response was ‘we don’t have the budget’. Today, new operators are coming into the market, and they are more attuned to a service-based way of thinking. In short, the pastries and ice creams are accounted for.

Marketing and measuring satisfaction

Even how we ‘purchase’ space is changing. Increasingly, online portals are playing a role in how we search the market for property. Outside property you can purchase in one or two clicks, but can’t with property – is that part of the future? At the moment, pricing isn’t dynamic either, but is that going to change? If we’re renting offices by the day, will we see surge pricing? Will there also be more TripAdvisor style review platforms for property?

What do each of these things mean for skillsets required within the property industry? What partnerships would create a competitive advantage?

The conversation raised several interesting avenues for exploration as well as exciting prospects for the future of the property industry. Key trends were identified including:

  • The rise of property management
  • The tenant as the customer
  • Space as a service

All of these warrant further exploration within themselves.

The speed of change in customer expectation is dramatic and the way in which customers are feeling and behaving when it comes to commercial property is entirely different to a few years ago. Is there enough industry awareness of that change, or is it just the enlightened few who are making a difference?

Howard concluded that as a mentor within the property industry, he often asks those who have newly completed their professional training, ‘have you thought about your tenants as customers?’ To date, no one has responded in the affirmative. It’s a skills gap and a huge opportunity – it’s just a question of harnessing it.

 

‘It’s fantastic to be working together on a new vision’

RealService would like to congratulate the customer experience team at Transport for London for winning the Institute of Customer Service’s UK Customer Satisfaction Strategy Award for 2021.

It has been a great privilege to work with Siobhan Jared and Tom Atkinson over the last four years and we are very proud of the contribution we have made towards that success.

Our founder and managing director Howard Morgan has provided strategic guidance and coaching on TfL’s customer experience strategy since 2018.

RealService have also carried out in-house training for property managers and surveyors and conducted Voice of Customer research so TfL can better understand their customers and stakeholders. Our research has enabled TfL to measure their CX progress, benchmark it against their peers and pin-point areas which might need improvement.

How we helped TfL

Howard Morgan, RealService Founder and MD, was appointed in Q1 2018 by TfL Commercial Development to provide strategic guidance on its customer experience strategy. Since then, Howard has provided a range of consulting and mentoring services to the Senior Leadership Team. Projects successfully delivered include:
      • Development of new vision, mission and customer strategy
      • Design of a new customer experience best practice framework for Build to Rent residential
      • Design of stakeholder consultation events
      • Motivational workshops to launch customer programme
      • Best practice safari including visits
      • Informal mentoring of members of the SLT and management team
      • Advice on key performance indicators and measurement
      • What TfL said: 'RealService are completely in tune with the property industry in terms of the research it does, the networking and their understanding of the social piece, which is such a growth area. As a niche company they think a bit differently and have challenged us to do the same. (Siobhan Jared, Senior Business and Customer Performance Manager)
RealService were engaged by Transport for London to run a customer service training course for property managers and surveyors.

TfL wanted their staff to be prepared to manage the impact of the pandemic on their customers and be able to engage with empathy and understanding.

The bespoke course covered the acquisition of broad customer experience skills and also focused on personal skills around communication techniques, building on empathy, understanding and assertiveness.

RealService have also run a Financial Skills for Property Managers course, while TfL have also been enthusiastic supporters of the Customer Experience in Real Estate – Future Leaders Programme. This course, co-directed by Howard Morgan and Professor Yolande Barnes at UCL’s renowned Bartlett Real Estate Institute, runs twice a year.

The impact on TfL: Feedback from TfL suggests the training had a significant impact on the relationship between surveyors / property managers and TfL customers who spoke of better communication and said TFL had become ‘absolute leaders in customer service’.
Since 2018, in-house RealService consultants have carried out three Voice of Customer studies, conducting telephone interviews with TfL’s internal and external customers.

Having a purposeful customer experience strategy, backed up by effective in-house training and buy-in from property managers and surveyors meant there was a demonstrable improvement over all key metrics across the three surveys.

Impact on TFL: The results from the most recent study, delivered in 2021 showed:
      • A huge positive NPS shift
      • Significant rise in overall satisfaction
Picture of Howard Morgan
Howard Morgan … CX strategist

Howard said: “Transport for London have embraced every aspect of customer experience and injected it into their DNA. It has become part of their culture and the improvements in Net Promoter Score and feedback from their customers demonstrate their efforts have borne fruit.

“It’s fantastic to be working together on a new vision, mission and customer strategy, but they have started on the really hard work of actually delivering it.

“This award is a marvellous recognition of their progress, and is much deserved.”

“I would recommend Howard’s strategic expertise to any business wanting to put customers at the heart of their operations.”

Siobhan Jared, Transport for London

Siobhan Jared, TfL’s Senior Business and Customer Performance Manager, said: “We are delighted to receive the award because it recognises the progress we have made.

“Howard and his RealService colleagues have helped us from the very start of the journey and continue to provide advice, mentoring, education & training and Voice of Customer research so we can continue on this very rewarding path.

“We have worked with Howard since 2018 and I would recommend his strategic expertise to any business wanting to put customers at the heart of their operations.”

RealService are continuing to work closely with TfL.

QUESTION. What do Singapore Airlines, the NHS and The Crown Estate have in common?

Answer. They all examine – and publish – their Net Promoter Scores.

The score is a measure of customer loyalty used by more than two-thirds of America’s Fortune 1,000 companies and which has been embraced in the UK by forward-thinking property companies like The Crown Estate and GPE (formerly Great Portland Estates). Both have published their Net Promoter Scores in their 2021 Annual reports.

RealService can help you measure the loyalty of your customers and benchmark your score against your peers.

Managing director Howard Morgan believes the NPS is putting the spotlight on customer loyalty in the property industry: “The NPS is independent, it’s transparent and it is a powerful device for landlords in motivating their leadership teams and suppliers,” he said.

“It’s an industry-standard measure and I am delighted we are trusted by our clients to gather data which tracks and demonstrates their progress in improving customer loyalty.”

End user satisfaction more and more important

Investors are increasingly focusing on rental income and that makes the satisfaction of the end user more and more important. A good NPS is attractive to investors but it’s also an early-warning system which highlights areas which could be improved.

The score was developed in 1993 by Fred Reichheld and later adopted in 2003 by US consultants Bain & Company and tech company Satmetrix.

It is based around the simple question: On a scale of 0-10, how likely are you to recommend us to a friend or colleague? Plus the obvious follow up: Why?

The score identifies promoters, passives and detractors; it’s the promoters who will recommend your product or building to other potential customers.

As well as helping you calculate your NPS, RealService can also benchmark your score against other property companies, via our RealService Customer Experience Index.

RealService Customer Experience Index

The Index is based on around 35,000 responses to questions put to residential and commercial clients over the previous two years, covering eight core areas and incorporating overall Net Promoter Scores.

RealService clients can analyse their own data confidentially and compare their RealService CXI score with their peers in the property industry. It is published annually.

Louise Freethy, RealService director and chief operating officer, believes the property industry should embrace a metric which has long been used in other sectors.

“The NPS is a tried and tested tool which is an incredibly useful indicator for landlords as they reinvent office, retail and industrial environments and engage their customers in that process,” she said.

So please download our factsheet which covers NPS basics or contact RealService director and chief operating officer Louise.Freethy@Real-Service.co.uk for more information.

 

NPS Factsheet

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.

What’s so exciting about leather belts?

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE Build To Rent [BTR] industry is ready to embrace an accreditation system which would set standards and protect the sector from rogue operators.

At a virtual roundtable event chaired by RealService founder and managing director Howard Morgan, industry leaders discussed how Build To Rent (BTR) could continue to improve its offering to customers. In summary, the participants agreed it was time to begin an accreditation process which could define a set of standards, be a trusted guide for customers and provide a means of communicating performance to audiences such as investors – while still leaving room in the market for different offerings at different price points.

Attendees observed there was an emerging need. “We are approaching a period of development and maturity in the sector so things which might have seemed impossible three years ago are now within our grasp,” concluded UKAA chief executive Dave Butler.

Accreditation and data transparency

Participants explored whether an accreditation system should involve the release and sharing of underlying data between industry peers. The main conclusion among attendees was that the sharing of data was not an immediate priority – not yet, anyway – but there appeared to be consensus around the need for a set of minimum standards around what customers should expect.


The debate around data sharing centred on trust, the quality of the information and the method of harvesting it.

Katherine Rose, director of BTR & PRS at Navana Property Group, said: “Sharing data is important but I don’t think the industry is ready to do it yet. We’re all still a little precious and also, how accurate is that data? Everyone wants to look good and how truthful are they? I’m not sure everyone will play fairly. But it’s the way to go. We should all pull together and be less precious.”

Opportunities for Market Differentiation

PPP Capital’s Sanjeev Patel, managing director of LuxuryDigs, said: “I do believe there is a need for accreditation but I also believe there is a place in the market for a Premier Inn and a Waldorf.

If you want a Waldorf, fantastic, pay for it

“If you want a Waldorf, fantastic, pay for it. If you want a slightly cheaper product, go to a Holiday Inn or a Premier Inn and pay a bit less. They may be very different but in both you will get a clean room and a comfortable bed. I’m comfortable with everyone signing up to a minimum standard – a high minimum, mind you – then you can pitch your assets wherever you want them to be and marketing and customer expectations can be managed appropriately.”

Creating standards 

“I would draw an analogy with Wimbledon,” said, Howard Morgan.

“People had been hitting a ball around for a long time but had no ability to compare their skills with others until Wimbledon came along and defined a set of rules and how to score. I think there comes a point in an industry’s evolution when someone has to say it’s time to draw up some standards that we all abide by and, although it might not be comfortable for everyone, it seems that we are getting closer to that point.”

The group also heard from Chris Garthwaite, the chief executive of customer experience consultancy CGA, who worked with 26 different rail operators to define a set of common standards.

‘Accreditation builds trust’

Having an accreditation system, he said, would build trust and help re-set expectations.

“Trust is a key differentiator; if you lose trust, you lose loyalty. In a world which is accelerating, becoming more digital but where you have a fragmentation of customers, understanding the emotion and sentiment of your customers will become fundamental to delivering the value of the brand – or the industry – to those audiences.”

There is already an accreditation system in the student accommodation sector and according to Jane Couch, chief operating officer of Fresh Property Group, while this is an extra cost – around £2-3 per student – this extra spend actually helps attract investors.

“Investors are traditionally risk-averse but they know about the accreditation costs up front and it means they know you are a responsible operator who is not going to have problems with negative feedback hitting the press.”

Prospects and next steps

Dave Butler said there was already a UKAA benchmarking group working together to deliver a manifesto around what ‘good’ looks like and he issued a call for anybody who wants to contribute to that debate.
“While I’m not going to die in a ditch over the sharing of data – I think that’s a while down the road – it is hugely important to define ‘good’,” he said.

Read the article on the UKAA website here

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.

THIS is the second interview in our series of CX Conversations and it’s with Kaj Bakker, the head of sustainability (Europe) for global REIT Cromwell Property Group.

Kaj is a passionate convert to the importance of customer experience in the property industry and talks about how annual feedback gathered by RealService across the continent has enabled Cromwell to better understand their occupiers.

Kaj Bakker
Kaj Bakker, Head of Sustainability (Europe), at Cromwell Property Group

He also touches on being the middle-man, the asset manager serving two masters – occupiers and investors. It’s understanding occupiers, he says, which will drive retention, reputation and revenue – and keep investors happy.

Next time, David O’Sullivan, director of occupier and property services at Great Portland Estates, emphasises the importance of customer feedback and how ‘over communicating’ during the pandemic has forged closer relationships between landlord and occupiers.

CONNECTING on a human level with the end user is the way the office sector will remain relevant as it undergoes the most radical change in decades.

So concluded CGA founder and managing director Chris Garthwaite as he wrapped up the first roundtable event to mark his organisation’s collaboration with RealService.

The event was the opening salvo in RealService and CGA’s series Revitalising Real Estate and the discussion revolved around the theme Reimagining the Office: The Customer’s Voice.

“The office is one of the last institutions which is now breaking down,” he said. “Covid is an accelerator, but a distraction. The office now can be a home, a coffee shop, it’s wherever the end user wants it to be.

“It’s the biggest change in 40 years and probably one of the last industries which is being fundamentally altered.”

Strategic partnership

RealService and fellow customer experience consultants CGA have launched a strategic partnership with the aim of giving clients the best of both worlds: RealService’s expertise in the property industry and CGA’s renowned knowledge of other sectors.

The launch event featured some of RealService’s valued clients and they were challenged by one of the industry’s biggest customers, Chris Richmond, senior head of real estate at PwC.

Those around the table impressed Richmond with their commitment to customer engagement although he said his personal experience was a patchy one.

RealService and CGA launched their formal collaboration with a roundtable online event which discussed the future of the office

“Maybe PwC are dealing with the wrong landlords,” he said, adding that while some had engaged with him during the pandemic, there had been little dialogue around a return to work.

David O’Sullivan, director of occupier and property services at Great Portland Estates, said his team had, if anything, over-communicated with occupiers.

“It’s disappointing to hear of Chris’s experience, because I can say with certainty our delivery of that type of response has been exemplary,” he said. “We went early, issuing a return to work playbook to advise occupiers.  We have kept every one of our buildings open, we’ve communicated throughout the process and run occupier clinics.

“Moreover, it has been a highly-valued process that has really improved our relationships. It has been the one constant thing we have been able to talk to them about in the last year and it has really cemented our relationships.”

While Richmond was preaching to the converted an even bigger question remains: what is the office environment going to look like in the future?

PwC have announced they will be embracing flexible working with its chairman Kevin Ellis saying he hopes it will be “the norm rather than the exception” and that “we want our people to feel trusted and empowered”.

Its workers can now work from home for a couple of days a week and start as early or as late as they want, which could have major implications for the space PwC currently occupies.

RealService founder and managing director Howard Morgan, who facilitated the discussion, wondered if space should be priced by the day? “Surge pricing is prevalent in every other sector,” he said.

Paul Rostas, founder of Plus X, the coworking provider, said: “We’ve tried to develop our product in a different way; we used to work at our desks and have an away day to think differently, maybe now, we work at home at our desk and come into the office to think differently.

We haven’t really tried a hybrid model

“Maybe Monday is for one company, Tuesday we set it up differently for a different organisation. From a cost-efficiency point of view that’s appealing; we reconfigure the space as and when people need it, driven by what the customer wants.”

For Dan Lovatt, head of property management and build to rent at Transport for London, the problem is two-fold.

He said: “First there is a technical side – help me with PPE, signage etc but then it’s, ‘I’ve got this space, help me understand what I am going to do with it’. The second lockdown has been a lot harder on people and there is less of a desire to work from home.

“Presenteeism plays a part. We talk about a hybrid model but we’ve either all been in or all been out, we haven’t really tried a hybrid model.”

From his perspective outside the property industry, Chris Garthwaite said change was inevitable.

“I remember working for Kingfisher when the internet arrived. It’s the same here. Your customers will have access to anything they want, on their terms. The focus must be on considering what are you selling? Is it productivity? Flexibility? This is about brands selling environments and this is where it starts to become really interesting.”

 

*RealService and CGA would like to thank Dan Lovatt (TfL). Michelle Laramy (The Crown Estate), David O’Sullivan (Great Portland Estates), Paul Rostas (Plus X), Rowan Packer (Mapp) and Raj Rajput (Hines) for responding to Chris Richmond’s challenge and to Chris Richmond (PwC) for being the provocateur.

 

CX Conversations: Listen to Claire Middleton’s interview with Chris Richmond here.