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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.

A VITAL cog in the RealService business is the in-house research team.

These skilled researchers conduct the interviews which give RealService clients the in-depth feedback upon which they base key business decisions.

Many of the interviewers have worked for RealService for many years, returning to projects they know intimately on an annual basis. Others have backgrounds in languages, which enables the company to carry out research in the native tongues of customers all over Europe and beyond. For the Cromwell Property Group, for example, interviewers operate in French, Dutch, Italian, Danish, Finnish, and German.

This week, director and chief operating officer Louise Freethy registered her thanks to the team who have brought invaluable insight to RealService clients over the past 22 years, with a special emphasis on research carried out during the pandemic which, she said, has helped clients sketch out “the new normal”.

“Our research team are the unsung heroes of our business,” she said.

“They are practised in gaining invaluable information which can be analysed and presented to our clients. This has been true since RealService was founded in 1999, but especially over the last months where the real estate industry has been hungry for  intelligence around what they can expect the world to look like post pandemic.

Vast knowledge of the property industry

“We are not a market research company. We are a company with vast knowledge of the property industry and the insight our interviewers glean is used by our clients to inform their strategic business decisions.

“Major property companies will be establishing their post-pandemic offerings based on the findings of our research.

“The interviewers have to be highly proficient. They have to engage busy people in a conversation which will provide important feedback on specific questions, and, most importantly, they provide an independent voice.

“We rely on them and I wanted to take an opportunity to thank them for their work.”

So, what makes a great interview?

“A great interview is a conversation which is directed by the interviewer to cover specific points,” said April Davies, who has been with RealService for 12 years and whose projects have included Cadogan, Great Portland Estates, The Crown Estate and others.

April Davies … skilled interviewer

“We are often interviewing very busy people so we need to engage with them very quickly and convince them of the value of taking part in the research.

“It is about covering all the bases in the questionnaire and providing real-life examples, so when our client reads the transcript they know exactly why their customer thinks they are doing a good – or bad – job and what they can do to improve.”

The value of RealService feedback is described as “crucial” by David O’Sullivan, Director of Occupier and Property Services at Great Portland Estates.

“The feedback from the RealService surveys is not just important, it’s crucial, critical,” he said.

‘The feedback loop is essential’

“The feedback loop is essential and it’s one of the reasons we moved our survey from a biennial event to an annual one. Two years is too long to go without talking with your customers.

“To the question, what do we do with that research, the answer is we create action plans from the feedback.”

Before the start of each project, the interviewing team is briefed by the project manager. All have been trained around issues such as confidentiality and data protection. Last month, all undertook  Interviewer Refresher Training.

“We believe our research team is our point of difference,” said Louise Freethy.

“We do not contract out our interviewing to a call centre. We use an experienced, in-house team who are a key component of our business.

“They go above and beyond when interviewing to provide the sort of insight which allows RealService to go above and beyond for our clients.”

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