SERVICE CHARGE: SIMPLY NOT ACCEPTABLE
Earlier this month, the threat by John Lewis to withhold 20% of its service charge fees made headline news. A spokesperson for the company, a major player in retail letting across the country, told Sky News -
“Continued increases are simply not acceptable, particularly in the absence of strenuous efforts by landlords to work collaboratively with us to reduce these costs.”
This highlights two major problems stemming from within the industry. First, it indicates a lack of alignment between customer and landlord. Second, it suggests an emphasis on the downward spiral – the reduction of cost. According to Sky News, John Lewis’s move could result in legal action by property owners – the one obvious way to deal with epochal changes currently facing just about everyone in the property industry.
IS THERE ANOTHER WAY?
At Experience Makers, we think there is.
As the property industry evolves, becoming more service driven, there is a huge opportunity to enhance the experience of customers AND generate added value. This is a revolutionary new income stream that has the potential to plug the gap where traditional methods falter. If only there was a way to:
- Demonstrate the impact of CX initiatives
- Justify a boost to the service charge or even …
- Raise the overall investment value of an asset, based on the satisfaction of customers and users?
This was the focus of Experience Makers’ latest event Modelling 'ROX,' the first stage of our ongoing research and development to help the industry get to grips with – and harness – the value of ‘Return on Experience’.
LAND, PEOPLE, MONEY
The event took place in the tasteful offices of Argent, against the backdrop of their impressive model of King’s Cross. We made the model came alive with markers to illustrate a range of services and initiatives taking place across the site. This highlighted just how diverse and proactive the world of property is becoming and put, in visual terms, the shift in focus from perimeters to people.
Yolande Barnes, Chair at Bartlett Real Estate Institute, a new, global organisation which is rethinking the traditional view of real estate, led her presentation with the idea that real estate is a heady mix of land, people and money. She said that with fundamental changes taking place in consumer behaviour and the economy, the need for long-term income streams has completely changed investment criteria and aims. Hers was a compelling argument for the transition from capital concentration in real estate to models that require income from management and land stewardship.
The idea of guiding principles is increasingly being tried and tested in large-scale developments, with King’s Cross a prime example. An even more considered approach is being applied at the development by Argent at Brent Cross, with social value and performance indicators being built in from the very beginning.
Duncan White, Sustainability Director at BurroHappold Engineering, has recently been working on a proposal to interpret The Brent Cross Handbook, an illustrated booklet that imagines how life will feel for people living, working and spending their time at Brent Cross. He described the process as human principles first, informed by in-depth site and customer analysis, followed by research-based actions and ways to measure desired outcomes.
Health and wellbeing is a big focus. BurroHappold looked at behaviours that promote mental and physical wellbeing. From a variety of research findings, they identified physical elements and environmental factors to encourage these, then set a measurable objective (40% of regular users to be in ‘flourishing mental health’) and a way to track this target via post-occupancy questionnaires.
STRATEGY FOR SUCCESS
While both speakers referred to large-scale development, the same thinking applies at asset level. Millions of pounds is now being spent by the property industry on a variety of activities and interventions to enhance the experience of the customer. However, there is very little evidence of a methodology being used to show how successful, socially or financially, the range of CX initiatives are.
At the crux of ‘ROX’ is the need for a defined strategy that sets out purpose and generates trackable data.
During the event, we provided guests with an Experience Makers ‘ROX’ Assessment Tool card, which provided a template for formulating strategy and a way to identify gaps in current delivery.
There is long way to go before making a definitive link between individual experiences and investment return but a good place to start is by defining and finding ways to measure the impact you hope to achieve for your customer.
And that is something the customer will value too.
Read about our follow up event held in collaboration with Gresb and Experience Makers partners, RealService and find out how you can get involved with groundbreaking research to change the way investment decisions are made here