Relationships, Networks, Ecosystems - ‘How can we help?’
Caravan of Marco Polo traveling along the Silk Road. Geography and Map Division/Library of Congress, Washington, D.C.
Relationships, Networks and Ecosystems are really going to matter in the future of real estate. As we move from being a ‘product’ industry to a ’Service’ led one we need a different approach to how we deal with our customers. We need to move away from a transactional mindset and rethink where our value lies. There will always be a place for deals and dealmaking in real estate but the deal we will have with our customers will be a different one. And it will be based on relationships, networks and ecosystems.
Delivering a great service can only occur if you are working with great data. That enables you to monitor how you are performing and provides you with the feedback loop that allows for continuous optimisation. In the context of the workplace we need to know, in realtime and at a very granular level, how the building is performing, in terms of providing exceptional environmental conditions, how the space is being used, and to what purpose. To what extent are we providing the spaces and services that enable individuals to perform their tasks as efficiently and effectively as possible. I.e are we providing 1st class ‘Space as a Service’?
Our aim, apart from the obvious one of pleasing our customer, is to create a working environment that is tightly attuned to personal need. That actively and continuously learns from qualitative and quantitative data what a customer wants, needs and desires and seeks to provide it. We have talked elsewhere about thinking of ‘workplace as software’ and this is at the core of that concept. By constant iteration, by a process of ‘Build, Measure, Learn’, our workplace gets better as time goes on. For our customer. Their off the shelf workplace becomes increasingly made to measure.
And the benefit to us is powerful, as competing with made to measure is hard. Our customers could leave for a competitor but then they’d lose all the personalisation now incorporated into their workplace and would be back to off the shelf. The learning process would have to start again.
Our value proposition is that we are creating the perfect space ….. for you.
But we cannot do this alone. Which is where relationships, networks and ecosystems come in.
We need to build close relationships with our customers because we need to understand a lot to deliver a lot. And these relationships need to be built on trust. For us to really understand the wants, needs and desires of our customers, which is essential to delivering a great service, we need a lot of data. However, having been burnt repeatedly by companies extracting data from us only to then ‘productise’ us, many people are very wary, rightly, of being tracked. So we need to be extremely upfront and transparent as to the trade we are offering customers. We need to be able to explain why we require X, Y, or Z data and how it enables us to provide A, B or C service. And how we are storing the data, how we are respecting privacy, and what else we are doing, or not, with their data.
Our approach to customers data needs to form part of what our Brand stands for. Make no mistake, within the real estate industry we will see increasing examples of customer outrage as companies fail to handle data properly. And in a ‘Space as a Service’ world the price could be very high. Reputations take years to build but days to destroy. Try to be Apple, not Facebook.
Networks and ecosystems are required for two reasons. To help satisfy a customers real estate, and non real estate, needs.
Starting with real estate needs these are becoming more complicated for companies. In the old school, highly office centric world it used to be the case that all employees came into a single office building, every day, Monday to Friday. So a companies real estate needs usually amounted to securing one building per geography. Increasingly though, as companies move to a hybrid way of working, and then on from there to a fully distributed model, they might need a network of spaces. They might need a CBD base, some flex space, some co-working space, some ‘Club’ type space, some ‘Near Home’ space. And they might need these available across multiple geographies. And ideally they’d like them all wrapped up into a single offering, managed from a central online location, and managed and billed together. In other words, their needs are ‘complicated’.
How much of this could you satisfy on your own? In reality probably not much. Which is where networks and ecosystems come in. We are supposed to be the real estate experts and we are in the service industry, so we should be building our own support network, and ecosystem of partners that would allow us to tick off many if not all these boxes. We should be putting in place the arrangements that would allow us to service most of a customers real estate needs.
Because if we don’t, someone else will. And that someone will then ‘own’ a very important part of the relationship with our customer. And once you lose your relationship with a customer you are but one step away from being commoditised. Many landlords will learn this lesson over time; in a space as a service world owning the customer relationship is vital. Landlords could easily find they have no relationship with their customers, and step by step move from being ‘king of the castle’ to interchangeable suppliers.
On the flip side todays leasing brokers might morph into this sort of super advisor, where instead of making money signing up clients to leases, they have a more ongoing, less transactional role advising and organising away all the complexity of future real estate needs. Getting rid of problems can be a very lucrative business.
And then we have a customers non real estate needs. Unlike most consumer goods companies, who need to know a lot about their customers but seldom have any real world contact with them, our customers spend 90% of their day inside real estate. Our customers are with us most of the time. Historically though we have known very little about them. Which will change dramatically in a space as a service future. As we have discussed many times, we need to know a lot about our customers in order to provide them with a great user experience. In so doing we ‘should’ be able to discern what non real estate needs they have that we might assist them with. These might be hospitality services, or learning and development ones, or digital skills we can aggregate demand for. Or ….. whatever. The point is not to be prescriptive but to listen, learn and provide, where possible. What can you supply? Where do you fit in? How can you help?
In the tech industry companies talk about CAC and LTV. What is the Customer Acquisition Cost and what is their Life Time Value. The higher the life time value the more one can pay to acquire a customer. Why don’t, can’t we think more like this in real estate. Stop thinking of customers as transactions but instead see them as long term ‘guests’ whose lives we can improve in multiple ways.
Via our relationships, networks and ecosystems.