Office occupiers: are you being served?

‘The customer is always right’ is a motto that reminds businesses to prioritise customer satisfaction. Yet while this may be true of many service sectors, recent research by the British Council for Offices (BCO) - Building Performance: Rethinking the Relationship Between Owners, Managers and Occupiers - has found that UK office occupiers’ perception of real estate suppliers continues to be one of frustration and disillusionment. But why?

A key finding of the BCO research is the industry is perceived to be seriously lagging behind in the customer-service revolution. In a time of increasing demand for office space and a limited supply, less than 20% of office occupiers rated their property management service as good or excellent. And less than 33% of occupiers felt the property industry really understood their business needs.

We take it as the norm that tools such as TripAdvisor provide us with up-to-date, independent feedback about hotels, restaurants and places to visit. We take it for granted that we can shop on our iPhones: order a book or gift and it will arrive the next day as promised. Our expectations for quality of service and responsiveness have increased exponentially. However, the office industry is yet to get into its stride in this respect as far as occupiers are concerned.

Higher levels of service

Ever-changing business pressures call for the supply side of the industry to provide higher levels of service that focus on improving occupier satisfaction with how their office buildings are managed. Many landlords seem unaware of this need for reform, or that a cultural change is required that recognises it is occupiers who are the driving force behind the office buildings they develop and manage.

The industry must engage with these occupiers to understand the continuous change in their requirements.

As chairman of the BCO Occupier Group, I believe the industry must act now if it is to address this clear gap between customer expectation and customer experience. Despite technological advancement that has seen the emergence of ever more energy-efficient and sustainable offices in the past decade, the industry has been slow to react to what occupiers want when it comes to the day-to-day running and performance evaluation of these buildings. While 66% of occupiers are happy with the quality of their office and 75% felt quality had improved over the past 10 years, those surveyed felt there could be marked improvements in the property management service offering.

To try to address this, the BCO research has developed, with occupiers, a new definition for building performance to help owners and managers understand what a well-performing building looks like from an occupier’s perspective. This new definition highlights the differing needs of occupiers, including driving quality and value, meeting sustainability objectives and providing environments that meet the needs of users, resulting in efficient and effective workplaces. This new definition provides a more sophisticated approach to property management and is a much-needed break from the one-dimensional focus on cost reduction that has dominated the industry.

Crucially, occupiers are calling on their estate managers to switch their attention to finding the ‘performance sweet spot’ - the point at which the interests of the owner, manager and occupier are aligned. For this to happen, the industry must start to view its occupiers through a ‘customer’ lens and switch its focus towards value and quality creation. Owners and managers must spend more time with their customers and, most importantly, improve their ability to ask open and honest questions.

The potential benefits for the industry in adopting this approach are significant; those owners and managers who are willing to respond to customers’ fast-changing needs will prosper thanks to the ‘three Rs’ of real estate - revenue, retention and reputation.

The challenge for the industry in meeting these occupier expectations is how to take the concept of a ‘performance sweet spot’ and find objective ways to measure it, as well as finding a way to communicate these results in a transparent way. While the formal and technically specified style of service-level agreements was not considered appropriate for the UK office industry, discussing service-level agreements upfront could be a potential solution. If all parties agree to commit to a certain level of service, this could be a pragmatic solution to ensure the industry meets its customers’ needs.

The BCO’s Occupier Group hopes this research will spark renewed debate and provide a pragmatic way forward, drawing on the findings of the research and providing a response to the challenges highlighted. The study concludes with a 10-point action plan that the group intends to adopt as a guide for creating change in the office industry by working with office owners, managers and occupiers.

Chris Richmond is head of real estate at PwC and chair of the British Council for Offices Occupier Group