Money for nothing and nothing for free: the profession may find itself in dire straits if working practices do not evolve.
Beauty may be in the eye of the beholder, but there is growing exasperation in the agency world that instructions are ever more dependent on the size of the fee suggested and not the quality of service offered. One top ten firm now withdraws if the name of a certain rival is on a short list. This is because experience has proved that, even if they pitch at cost, the competitor invariably comes in at 50% below that figure. The winning agent probably loses money on the deal and the client will not get the service he wants – even though he will, ironically, get what he paid for. Not a very efficient method of matching supply and demand.
A further common complaint from the agency fraternity is that if they have to utter – or hear – the seemingly ubiquitous phrase “added value” much more they are going to go stark-staring bonkers. In fact, several surveyors have already been afflicted by this distressing condition. One has confided that the next time a client who has no idea how to give a proper brief asks him how his firm would provide the dreaded “AV” he will throw open the boardroom door and bring in a circus clown and a chorus line. A trifle extreme, perhaps, but an example of the frustration currently being experienced.
But the issue of value for money is a serious, if simple, concept that needs to be addressed by surveying firms if they are to fight off stiff competition from other sectors. Property costs take up around 10% of any business income – and it comes straight off the bottom line. Reduce costs and profits go up – a pretty powerful motivation for any company director. The trouble is that too many of them still do not understand property and how to manage it, and are looking for someone who can. The prospective candidate must understand the clients’ business in order to understand how to “add value”.
Here, firms of accountants have an advantage; Typically they have been involved in either auditing or preparing business plans for ABC plc and will already have a fair idea of how it operates. And they are busily building property into the range of services they provide : at least one of the major “bean counters” is currently on the look out for some 40 surveyors to establish a full service property department. (Good news for unemployed surveyors perhaps, but not good news for the future of the profession.)
In contrast to their counterparts in accountancy, property practitioners usually have to wait to be invited to make a costly pitch when a company decides it has a one-off property need. This relationship must change, becoming more meaningful rather than being the occasional one-night stand. Encouragingly, leading multinationals have already adopted a strategy of using preferred suppliers in preference to beauty parades (see “Opinion”, May 6). Forward-looking firms of surveyors are working hard at ways of securing regular partners – and thereby stabilising more consistent fee incomes.
