We call a spade a spade, while a rose by any other name is still a rose. Throughout history, there have always been idioms to tell us that it does not matter what something is branded, it is still the same thing. Unless, that is, you are in property.
Remember occupiers – people who occupy buildings? Or tenants – people who occupy buildings? Well, in today’s politically correct world, where money is king, the 21st-century version is “customers”.
This use of the word “customer” made its way across from the US in the 1990s, and was reinforced by Gordon Edington’s book Property Management: A Customer Focused Approach (1997). The UK’s property sector has now totally embraced customers. And with landlords fighting to attract and keep tenants in tough economic times, if a word makes a difference, they will use it.
“The mindset here should clearly be that occupiers are valued customers; this must be reflected in all aspects of landlords’ or their agents’ interaction with them,” says Richard Angliss, international director, property and asset management, with Jones Lang LaSalle. “There should be a clear understanding and expectation of a responsive service, whether in relation to day-to-day operational management or more strategic occupational matters.”
He adds: “Tenants are the property owner’s customers by any reasonable definition and, as in any other business, the perception of feeling valued by the owner’s management team can only encourage customer loyalty.”
Kate Dean, regional director for offices at SEGRO, agrees that feelings are critically important. She says that the definition is about customer expectation, and how customers perceive that SEGRO itself perceives its customers.
“At SEGRO,” she says, “the terms ‘occupier’ and ‘customer’ are integral to our company’s service culture and philosophy, but it’s about more than just the words – the words represent the way in which we do business.
“[The definition] is also shaped by more emotional aspects such as the ‘feel’ of a business park or estate, whether they ‘like’ their asset manager and the ‘tone of voice’ used in our conversations. Experience builds satisfaction. To paraphrase John McKean, author of The Human Touch, 70% of decision-making is based on how we are treated and 30% on the product itself.”
So, should being labelled a customer, rather than a tenant or occupier, make a difference to people’s expectations of how their landlords treat them? “Absolutely – and so it should,” says Lee Middleburgh, group managing director at Peverel Property Management. “The industry is still learning how to treat people like customers, so there will be mistakes, but the proof of change will be in the way it learns from these mistakes.”
However, Tom Keys-Toyer, a retail partner at King Sturge, is not so sure. “I don’t think being labelled a ‘customer’ makes any difference to an occupier’s expectations when it comes to service,” he says. “The identity of the landlord is more relevant. Certainly, retailers’ expectations for customer service will be greater for an established institution or property fund than for a smaller property company or private investor.”
For those who consider rebranding tenants as customers a soft, southern craze, it is worth noting that the change to customer is being made across the UK. “It shouldn’t make any difference geographically – this is all about consistency of approach,” says Keys-Toyer. “The smallest customer should receive just as good a service as the largest.”
Landlords such as Bruntwood are now using this terminology in the north of England – and it makes sense, says Eamon Fox, associate director of DTZ’s office agency in Leeds. “If the customer is looked after, retention rates are going to be high,” he says. “Using the term ‘customer’ softens the sometimes misunderstood relationship between tenant and landlord. To see occupiers as customers requires a shift in perception about the relationship between landlords and tenants. Landlords who think of their occupiers more as cashflow than customers should remember that occupiers have a choice about where they take their business – like any customer. This important factor will determine whether your occupier wants to remain your tenant.”
But just as the property world is getting used to using the word “customer”, Tracey Byer, UK head of occupier services at DTZ, throws another description into the ring: “client”. “To a landlord,” she says, “tenants or occupiers are their clients and they wish to be recognised as such.”
Whether they are customers or clients, Peverel Property’s Middleburgh believes that the shift in mindset away from occupier and tenant has fundamentally changed the market forever.
He says: “The old property hierarchy – with landlords, tenants, sub-tenants and lessees all in their place – was a structure of power that meant those at the top could use the legal clout of the lease to batter those further down the chain. At last, the industry has entered the age of the customer. This turns the whole traditional relationship on its head.
“Before, disputes would have been settled by those at the top of the tree using the legal jargon of the lease to assert their authority. Now, with residents treated as customers, problems, resolutions and actions are explained properly. All sides should understand the other’s motivations, even when in dispute.”
Tower 42, where the customer is king
London’s Tower 42 on Old Broad Street, EC2 – with 2,500 “customers” from 43 international companies – pioneered the customer service-led approach to office management 10 years ago when its owner looked to the hotel industry to source a general manager.
Providing five-star customer service and a shift in emphasis away from “tenants” and “occupiers” has paid dividends and remains the guiding principle today.
The management team at the 31-year-old building has twice won national customer service awards. It has more than 300 staff members contracted for cleaning, security, front-of-house and maintenance, but all are treated as belonging to one company.
As part of the focus on customers, the concierge offers access to all the hottest tickets in town, while the front-of-house team covers nine languages.
Its customers benefit from service-led concepts such as a room-service menu readily available to all in the building.
The market view
“The property industry gets a bit hung up on these delineations, but to us it’s pretty straightforward. If you signed the lease, you’re a tenant. If you occupy the space, you’re an occupier.
“But, above all else, if you’re paying the rent, then – just like anyone else buying goods or services – you naturally think of yourself as a customer.
“Occupiers or tenants of commercial property are no exception to this and they should be treated as customers. In our experience, this applies across the board to office, retail, industrial and any other occupier of commercial space: if they pay the rent, they expect service and consideration.
“But if landlords think they can address this state of affairs by simply starting to call their tenants ‘customers’ – and, by doing so, get an improved quality of relationship – then they are being naive in the extreme.”
Rob Riley, director, Tenant Assistance Program
“This is particularly important when institutions and property owners are engaging with the occupiers within their portfolio.”
Len Rosso, head of logistics and industrial, Colliers International
“There is an enormous difference between the terms. ‘Customer’ tends to refer to a single transaction – they have the ability to shop around and withdraw their custom at any point, whereas ‘tenant’ tends to refer to a locked-in relationship – and the most successful landlords are the ones who take the view that tenants should be treated as customers.”
Matthew Purser, managing director, tenant representation specialist Studley
Oliver Jones, head of corporate real estate, built asset consultancy EC Harris
