Let me ask you a question: Who are a real estate company’s customers?
If you had to think twice about the answer, you’re in good company. The issue is clouded because of a traditional disconnect between real estate owners and operators and their customers. Often there are so many layers between a real estate company and its ultimate customers that the whole sense of service – a customer/provider relationship – gets lost. The industry is only just realising that this is a real problem. But as with any problem, there’s also an upside for those that manage to address it boldly and imaginatively.
In this blog post I’d like to show you some of the ways how real estate is changing the paradigm – and how the early movers around the world are dealing with the change.
A new report by PwC – Real estate trends 2019 – pinpoints this problem on the basis of the property-related findings of PwC’s 22nd Annual Global CEO Survey. It takes a broad and in-depth look at the market and concludes that the key to multiplying value in the current real estate environment is customer connection.
Bridging an old gap…
The study identifies big changes in the property business. It’s becoming more and more consumer-oriented, with people not just aware of but also engaged with the organisations that own and operate the buildings in which they live and work. Have you come across the glossy ads, brochures and websites (embedded in sophisticated digital marketing campaigns) promoting innovative, people-friendly housing developments? Then you know what I mean. These efforts are part of the industry’s attempt to finally resolve the problems of awareness, reputation and trust that have stemmed from a longstanding disconnect with their customers.
The challenge for many real estate businesses is that brand recognition, engagement and loyalty with the occupier of a building have never been priorities in the industry. Most people don’t know who owns the building they work, learn or shop in. Imagine having no idea of the brand of the search engine you’re using or the car you drive. But relative anonymity is still the norm within real estate. This lack of positive identification and damaged customer relationships have to be addressed.
The study points out the danger of relying exclusively on fixes like PropTech and social impact to repair the damage. While they might help, they can become a distraction or even an excuse for ignoring the need to get closer to customers, find out what they really want and deliver it in a way that makes social and commercial sense.
…to finally connect with customers
The recipe recommended by the study is more comprehensive and holistic. The authors argue that companies must rethink their approach to connect more effectively with customers, pioneer new ways of living and working, and develop innovative solutions to the challenges facing urban communities. This way real estate businesses can potentially transform their brand image and boost their market value.
It’s clear that there are long-term value opportunities in this evolving marketplace. But how can you as a real estate business gain the customer recognition, insight and trust to prosper and exploit this value? The real secret is to keep your finger on the pulse and focus on the three keys:
- Real connection – Although a service company might be well-equipped to engage with customers, it’s important to think about how many layers the real estate company wants to put between itself and the ultimate consumer.
- Real innovation – Data is clearly important and the technology to harness it is advancing rapidly in areas regarding environmental quality and the efficient use of space. But PropTech can’t get to the nub of customer issues and how to resolve them on its own.
- Real inclusion – To develop confident vision and build a brand people can relate to, it’s important to ensure the workforce has the diversity and inclusivity to reflect and understand the customers and communities they serve. As real estate evolves into a truly customer-driven business, it will require a more sophisticated approach to understanding the complex needs of different customers. As the range of services and opportunities increases, business with diverse talent — staff from different backgrounds with a wider range of skills — are more likely to thrive.
In our real estate advisory practice at PwC, we encourage clients not to focus exclusively on technology. Instead we specialise in bringing ideas and people together, and implementing new standards, procedures and ways of approaching the property business. The real estate findings of PwC’s latest survey confirm that this is the way forward for the industry.Want to go into this more deeply? Please check out the study and feel free to call me to discuss the issues that concern you.