5 Ways an Amenity Consultant Will Add Value to Your Property
As a property developer, you’ve done extensive research before launching your new project. You’ve taken into account rental demand, resale value, real estate value, and market demographics. Perhaps you've even hired a property consultant to help you manage your building.
Why then hire an amenity consultant to tell you how to plan, program and manage the facilities within your building? There are many reasons to engage professional amenity consultants. The benefits you can reap range from increased real estate value, to enhanced reputation, to greater utilization of facilities, which may be the most important benefit, as it is linked to cost efficiency.
Read on for the top 5 reasons to hire an amenity consultant:
1. Experience
As a developer, you have several property developments under your belt.
Amenity consultants, however, have worked on a vast range of different types of properties. They have a great understanding of the many things that could go wrong, and can spot potential issues much faster.
An amenity consultant can also keep you from making the wrong decisions when deciding how to construct and outfit your building. Recently, we had a client who was developing a new residential building in New York City. They were planning to build a traditional business centre in the property, equipped with rows of desktop computers.
We advised them against it, as the neighborhood is defined by its start-up community, rather than a traditional business community. Instead, we helped them redesign their business lounge to a co-working space.
Rather than equipping the space with computers, we ensured there were plenty of power points for freelancers to plug in their own laptops and phones to. They used the money they would have spent on computers to buy 3D printers, drafting tables, and virtual reality goggles instead. Rather than building a typical business center that would likely go unused, we designed the space for discussions or even to be a creative studio where people could embrace their maker instincts unfettered. (I’m eagerly waiting for new sneakers to be made, size 14 double E please!)
This example may seem simple. But when you’ve spent a long time figuring out how to add value to your building, consultants can come in with a fresh perspective. The changes they suggest may not make a big difference budget-wise, but can significantly affect the appeal of a building.
2. An Independent Perspective
It can be difficult to be objective when you’ve spent months looking at a project from all angles.
As you work on a building project, you might find that some of your initial plans and ideas might not be so ideal when it comes to the implementation. Amenity consultants can give you a fresh point of view, help you understand the operational impact of those decisions, and help you see what else you could be doing.
For example, at some point, everyone wanted to be part of a fully-equipped fitness center. Building developer were investing heavily into expensive equipment and large fitness centers.
Today, the trend has started moving towards group fitness. Everyone wants a routine designed for their lifestyle and personality, and they want to do it with others who share the same interest. This has seen people rushing to build yoga, cycling, cross fit studios, and so on.
Amenity consultants have a wider range of experience and have seen trends come and go. They’ve seen massive fitness centers that are only utilized by a handful of people. They've seen small fitness studios that opened with sold out classes, but a year later, are struggling to pay their rent and drive utilization.
They can provide that objectivity to help you evaluate if you really need that large a fitness center... or if perhaps a small gym with special features will suffice. They will help you decide if you need to build a new yoga studio... or if that money will be better channeled to hire a yoga instructor to run classes in the park next to the building or on your rooftop.
They will help you decide what is right for your community, and what will be sustainable in the long term - not what is trending.
3. Cost savings
Amenity consultants help you negotiate vendor contracts, conduct feasibility studies, and recruit the right service staff for your property development’s amenities. This can help you not only save money, but also avoid costly mistakes. You only get one chance to open successfully and make an impression with your launch, so it’s crucial to plan well in advance, as one of our clients learnt the hard way.
This client decided to engage us closer to the time they were about to launch their new property, which they had already built with saunas and steam rooms. They were not aware of the permits required from the city’s Health Department. The permit application should have been submitted two years ago, with the building engineering plans.
The client had hired both an interior designer and architect to advise them on how the saunas and steam rooms should be built. Yet neither one of them had raised a red flag about the lack of a permit and public engineering certification with the city.
After months of marketing the sauna, steam, and spa facilities and spending money on building them, the developer had to launch the property without operational saunas and steam rooms, even though they were already built. Had they engaged us at an earlier stage, this costly mistake would have been avoided through our previous experience with successful permit applications.
Amenity consultants also help you save money through negotiating for better equipment pricing. They work with multiple clients at a time, and often buy similar equipment for different clients in bulk, passing on the cost savings. Keep in mind that an amenity consultant may be building 5, 10, or even 15 fitness centers per year, while you may be developing or opening one or two projects per year.
4. Higher Returns
Amenity consultants will help to design lifestyle programs that increase your community's appeal. Their aim is to transform basic facilities into special experiences and memories for residents and guests. This gives you the ability to command higher rates, while occupancy levels and year-over-year retention improve as well.
Some of the programs and events we have planned for our clients include beer parties and film festivals. These events have helped clients appeal to and retain an important new market, the up-and-coming generation of Millennials.
5. An Enhanced Reputation
An amenity consultant can help you improve a building's appeal by designing programs tailored to the needs of the community. It could be day care services for working parents, or yoga classes for stressed-out professionals.
The happier your residents are with their environment, the more differentiated your building becomes. The more unique the experiences you create, the better word-of-mouth marketing becomes.
For one of the projects we worked on, we realized that there was a sizable community of musicians in the neighborhood. We suggested building a recording studio in the building, where musicians could jam and record music.
Most residential buildings stick to the usual gym, sauna, lounge, and business center amenities. This unconventional move, however, generated lots of buzz for the developer. Out of 350 units, more than 15 tenants reported moving in specifically because they heard about the recording studio.
In short, yes, you can do a lot of the work a consultant does on your own. But having an amenity consultant on your team makes the job simpler, saves time and cost, and increases the value of your property.
Marketing vs Operations: Building a Successful Property in the Age of the Customer
In the past, while customers controlled the buying decision, sellers controlled not only the products/services being offered, but information about those products and services.
Today, thanks to technology and the Internet, sellers no longer control information about their products and services. At the tap of a button, users can share reviews and information about their experiences with the rest of the world.
For property developers, this means that simply winning awards and receiving traditional media attention for your property and program is not enough.
To win the hearts and business of customers in an era where the rules have changed, property developers must go beyond typical measures of prestige (such as awards and fancy amenities) when it comes to marketing their property. They must now focus instead on ways to enhance the service experience for every customer.
The Conflict Between Marketing and Operations
Of course, enhancing the customer experience is easier said than done, because it involves a conflict between marketing and operations. Marketing focuses on top-line revenue and, accordingly, seeks invention and creativity in order to win new business, while operations is concerned with cost, efficiency, and execution. This being the case, conflict is inevitable.
Wearing the marketing hat, one is focused on reaching as many new and potential customers/buyers/renters as possible, possibly at the expense of keeping up the standard of operations. Wearing the operational hat, one might be tempted to keep costs low and not invest in the additional enhancements needed to raise staff functionality and service levels.
These two hats are often seen at odds with each other – however, I’d like to suggest that they are not at odds, but rather, complementary.
Excellent operations lead to enhanced reputation in the long-run and drive sales.
A good marketer will not neglect the importance of operations, while a good operations manager will understand how operations drives revenue.
Investing in Customer Happiness
A clear sign that marketing and operations is being done right is simply happy customers.
Happy customers are the result of a great reputation (the promise) + a great experience (the promise fulfilled).
Marketing drives the promise, and operations fulfills the promise. Working hand in hand, both marketing and operational functions should be making investments in:
#1 - Training and equipping personnel:
As your occupancy rates grow, and as the value of the property increases, the investment into staff should grow accordingly. Staff should be trained to deliver an even higher level of service, and there should be an increased sense of mission for top-performing staff.
#2 - Research and development:
Top businesses are never satisfied with achieving a level of success – for every achievement, they strive to top it, and add more value to their stakeholders and the lives of the people they touch.
Likewise, instead of just striving to be the best in the industry, look at how to innovate even further through research and development. This will ensure you become not only a market contender, but a leader for years to come.
#3 - Constant improvement of service levels:
Success is easier to attain than it is to maintain. A player with an established reputation in the market will be put under more scrutiny and shown less mercy when a mistake is made. Therefore, the goal should be to have a service provider that is creative and that will never be satisfied with service levels, constantly striving to maintain, improve, and surpass them.
When the gap between marketing and operations in bridged, property developers will be able to deliver the level of service that gets people leaving glowing reviews on online platforms.
Think of your customer as basketball’s proverbial Sixth Man, the first person to be substituted from the bench. The Sixth Man is that player who can play multiple players and roles throughout a game, and is just waiting for the signal to jump into action. The presence of a great bench player is a sign of team depth and excellence.
Just like in basketball, every customer you serve represents untapped potential, waiting to be unleashed. If you execute your service plan right, you end up with many bench players who could be stellar substitutes for your marketing team, your PR team, or your crisis communications team – at the ready, just waiting to tell the world how great you are.
This continues in a positive cycle, because glowing customer reviews will lead to a better bottom line and increased staff morale. That in turn will ensure operations keeps running like a well-oiled machine. And that consistency and excellence is what will keep people coming back.
How deep is your bench of delighted customers?
Procedures Versus Empowerment: Which Comes First?
In the service line, it is important for a company to uphold its brand and service level standards. At the same time, it is equally important to provide front line employees with the flexibility and freedom to be empowered to create positive experiences for customers.
In a study published in Harvard Business Review, it was found that customers who had the best past experiences spend 140% more compared to those who had the poorest past experience. At the same time, it’s not just about creating that “wow” experience, but providing reliability and consistency, and being apologetic and quick to correct mistakes when they are made.
According to research published in Forbes, the reward pathways in our brains “over-react disproportionately to losses in comparison to gains. This is why we humans are so loss averse and why understanding how your customers have been let down in the past is so important.” Therefore, “a strategy of minimising disappointments could offer a better return on our investment of time, money and resources.”
So what is the secret to empowering employees to create exceptional customer experiences or to minimize the effects of negative ones? Many employees want to be empowered, and many leaders say they seek to empower their employees. However, for many companies, “empowerment” is still a buzzword. Talking about empowerment at the top and “motivating” employees to “be empowered” isn’t enough.
As long as the policies and procedures in place are overly prescriptive and goals or KPIs set are unrealistic (e.g. closing a ticket in X seconds or zero service failures), employees will be incentivized to play it safe and within the boundaries of the rules, instead of going above and beyond for the customer.
At the same time, companies may in their zeal for empowerment go the opposite direction, and provide too few operating boundaries and guidelines for their staff. While this may give them the freedom to do all that is necessary to service the customer, it also creates a lot of uncertainty and leaves a lot of room for interpretation.
Companies that have become legendary for empowering their teams to provide top levels of service, such as the Ritz-Carlton, have managed to successfully strike that delicate balance between procedures versus empowerment. Instead of asking themselves whether to focus on operationalizing service or empowering their staff, they focus on the customer, understanding that it takes both clear operating procedures, as well as empowered staff, to deliver not only good, but outstanding service.
At the Ritz-Carlton, every single employee is famously allowed to spend up to $2,000 a day per guest to delight them or fix a problem, a drastic act of trust and empowerment by the company. Conversely, their Gold Standards are extremely well defined. For instance, their “Three Steps Of Service” clearly defines what service means at the Ritz-Carlton:
A warm and sincere greeting.
Use the guest's name. Anticipation and fulfillment of each guest's needs.
Fond farewell. Give a warm good-bye and use the guest's name.
What the Ritz-Carlton has mastered is separating what can be operationalized (such as greetings and farewells) and what can’t be (going out of the way to accommodate a customer request or fix a problem), and training for the former, while hiring and empowering for the latter.
While operational procedures can be trained for through repetition and reinforcement, an attitude of going the extra mile cannot be trained. This is why getting hired at the Ritz-Carlton is so extremely difficult. Based on the number of applicants and number that actually pass the rigorous screening process and get hired, getting a job at the Ritz-Carlton is touted to be around as hard as getting into Harvard.
This emphasis on service formed the core of the Ritz-Carlton’s business model, and was one of the key strategic elements that Steve Jobs “stole” from the Ritz-Carlton, after enrolling all its new store managers into the Ritz-Carlton’s training and leadership program.
At URBN Playground, we deal with a wide range of frontline staff, from concierge and front desk staff, to lifeguards, fitness trainers, porters, lifestyle directors, and more. We invested three months this past summer into developing a 170-page operations manual with clear guidelines for each role, with detailed guidelines and checklists of things to do before the shift, during the shift, and after the shift. In short, we operationalized as much of what we do as possible, to clearly define for ourselves and our teams what an acceptable level of service means at URBN Playground.
At the same time, we know that there are many things that cannot be trained or taught. Where the do’s and don’ts are fuzzier, such as dealing with customer complaints or out of scope requests, we have turned to our best teacher - past experience - and developed case studies based on real life as part of our operating manual.
For example, instead of giving our staff blanket rules such as “Never entertain out of scope requests”, we provide examples of when it may be inappropriate to do so and when it is okay to do so:
Ask yourself, does this request violate safety policies or will it potentially affect operations?
Example 1: A bather asks a lifeguard to watch her kids in the pool while she leaves the pool area. The pool rules clearly state that children cannot be left unsupervised by an accompanying adult, and hence this is a request that cannot be entertained.
Example 2: A resident asks to turn up the temperature in the gym, which is centrally controlled. You should not do this as it will affect temperatures in other amenity locations as well.
If the answer is no to the above, you may entertain the request:
Example 3: A resident asks a concierge to hold her bike temporarily in the package room. If there is enough space to hold the bike, and entertaining her request does not impact your job, you can entertain the request and potentially make the customer’s day.
With these measures in place, we know that it still comes down to hiring the right people, people who can be trusted to have the customer’s best interests at heart, and to sense what is needed before it is even asked for. We have had the good fortune of hiring some amazing people into the team in our first year of business - we’ve had people who would run out to buy an important piece of replacement equipment at a moment’s notice, out of their own pocket, and people who have gone above and beyond to make a customer’s day.
It is an iterative process, and we are constantly evolving. As we learn new things and develop new best practices from working with top class people, we incorporate this into our operations playbook. At the same time, having a set of operationalized service norms and examples of case studies inspires new staff we hire and serves as a baseline from which to continue improving.