Service: the fad that will not fade

There’s a stack of junk mail on my dining room table that has a direct relationship to Tower 42 in the City of London, and not simply because it is higher than it is wide.

The junk mail is there because, I am mortified to say, I find it a whole lot more interesting than I used to. Ten, even five, years ago I would have cheerfully binned the lot. But every Saturday morning now you can find me sifting through a week’s worth of holiday and gadget catalogues, investment opportunities and wine and food offers. There’s usually some pretty good stuff in there, too.

That pile of unsolicited mail represents what is probably the most significant shift in the relationship between producer and consumer since the bell tinkled for the first customer in the first ever shop: the use of technology to identify and address the obsessions, desires and needs of individual customers. In other words, the marketing people have me bang to rights. They know who I am, they know what I like and they know where I live.

The unopened envelopes, as I tell my wife, are the sharp end of a global movement away from mass marketing, in which the individual was just part of a crowd, towards one-to-one or ‘relationship’ marketing in which the individual is king and/or queen. My wife appears strangely unmoved by the explanation, but the truth is that one-to-one marketing can’t be ignored. It touches every business, it works like a charm – and consumers are beginning to love it and demand it.

Cut to Tower 42. Close readers of this magazine will recall that when Greycoat bought the old NatWest tower, the company’s chief executive appointed a former country house hotel manager to look after it (TheFB, May 2000). That manager – the ever-affable Terry Welsh – treats everybody in the building as if they were guests in a posh hotel. They have room service. They can order cabs, cigars and theatre tickets from their desks. And they can even have a frock made.

The result is that Tower 42 now commands the highest rents in the City – and the owners’ only problem appears to be that the tenants don’t really want to move out when their time is up. They love the service they’re getting, and very shortly they’re going to start demanding it elsewhere. Bright landlords will learn to provide it.

The current wave of customer-service initiatives in UK property is not a fad that will fade. It is part of a global shift in attitude towards the consumer.

The point of this curious introduction is to illustrate that the current wave of customer-service initiatives in UK property is not a fad that will fade. It is part of a global shift in attitude towards the consumer: a drive for competitive edge, enabled by new technology. And for that reason, Tower 42 – splendid though it is – is only a stepping stone to an even greener and more pleasant land for occupiers.

At the British Council for Offices conference in Birmingham last month, I snatched the chance to quiz 40 construction and property professionals on where they thought their businesses would be in 10 years’ time. The answers were illuminating and, for some, unquestionably terrifying.

There will be fewer landlords, the experts said. Their businesses will be profoundly client-focused. They will partner with occupiers, to give the occupiers what they want. There will be an enormous diversification in the levels of services offered. Their businesses will be based on income generation rather than on capital growth. There will be fewer developers, they said, and they will be more customer friendly and more user focused. They will help occupiers understand total occupancy cost. They will be responsive to changes in technology. Many of them will take their income from development fees, rather than investment trading profits. They will have to become more socially aware as they respond to the increasing desire of individuals to vary their place of work.

There will be fewer construction companies, they continued. And fewer customers too. We will see the rise of the mega global construction company that will operate as fund, investment manager and developer. They will be relentlessly customer focused. They will operate in an industry that is lean and mean. Large architects will become part of global facilities management companies. Small architects will become niche designers and will learn to live and work with user-led design. Agents will become brokers.

There was much more in this vein, and more that deserved to be taken seriously. The audience of 40 included professionals who have the power to influence the future of their businesses. And the underlying belief behind a survey of this kind is that those who have the power to influence the future tend to get the future they expect.

Against this background, the impending sale of MEPC to GE Capital and Hermes could be seen as another stepping stone: part of an inevitable move by the funds to take a larger share of the reward in return for taking the lion’s share of the risk; a move that prefaces a re-engineered property sector in which there are fewer and larger players; a move that marks a shift from the traditional property company founded on capital growth, to a more flexible animal designed to meet customer need at a profit.