What about brands in the property industry?Posted on: July 21, 2007
I explored this topic most recently in an article for TTA (an extremely good communications agency in the property industry) Industry Insights newsletter after they saw my original series of branding in property articles in 2001.
Brands are still in their infancy in the property sector. February 2007 saw the second annual Property Brands Conference and recently Property Week magazine ran an on-line poll of the leading property brands. Most talk about names, logos and advertising but this is naïve as brand is a much broader concept, which should have a fundamental impact on every aspect of a business. Maybe this is because marketing people know all about brands and not much about property, and property people know all about property and little about brands.
There are numerous research studies showing that brand leaders dominate their market, command premium prices, enjoy superior profits and outperform their competitors financially. Brands can account for around 10-30% of the value of a company – which must be of interest when you consider the negative NPV of most listed property listed companies. But in essence, branding is about how you differentiate your product (whether it is a house, an office complex or professional services) from others in the market in a way that really adds value.
Confusion about where brands fit in the property market
Branding is used in a number of different ways in the property market. For example:
- Corporate brands – Large institutions and organisations promote their reputation as a brand to the capital markets and investors. A key element of brand here is about reputation.
- Service brands – Those who provide professional services – whether surveyors, architects, engineers or agents – have brands to encourage people to use their services.
- Bricks and mortar brands – The actual developments (whether houses, shopping centres, office blocks or distribution parks) often have an identity which people then think is the same as a brand
Now the first two (corporate and service brands) are usually managed by the professional marketers within property companies and firms – and they need the entire organisation to understand the “brand promise” and deliver it on a daily basis in every customer/client interaction.
Yet the bricks and mortar brands are within the domain of the agents. Agents are paid to “market” large developments – but do they really understand branding? Surprisingly, marketing (and branding) is not taught to surveyors.
There is also some confusion about the way to develop and promote B2B brands (where you target institutional investors or business tenants in the retail, industrial or office markets) and B2C brands (where you are target consumers – whether shoppers in retail centres or residents buying houses). They often use different models and different approaches.
Building a brand requires a management intensive, expensive and long term strategy. Strong brands require a bedrock of rigorous analysis about a business’ mission, market position and values. This requires carefully researched marketing strategies embracing market need and perceptions and integrated marketing communications campaigns which ensure the differentiating message is delivered consistently through design, web sites, PR, physical space and the behaviour of staff.
The increasing importance of the service element of property businesses means we have to help all staff act as appropriate ‘Brand Ambassadors”. Staff must ‘live and breathe’ the brand to deliver the ‘brand promise’ on a daily basis. So we have to embrace training and internal communications in our brand building strategies.
Research shows that the market does not act rationally with regards to the value of property shares and there is a complex interplay between company specific factors and average sector discount but also some unidentified elements. It begs the question as to what extent does or could brand impact the irrational, sentiment issues?
Organisational buyers are no different to consumers who are influenced by both rational and emotional brand values. The brand insistence model defines five dimensions of brand – the emotional connection, the value delivered, relevant differentiation, awareness and accessibility. Brands represent trust and this is a precondition to loyalty. The view of academics Argenti and Druckenmuller is that reputation is managed reactively whereas brand is a future promise.
Leading property brands
(Note: All this information is in the public domain – having been either presented at conferences or published in articles).
A project manager at Segro (formerly Slough Estates) recently completed his MBA research dissertation on property brands by interviewing property industry CEOs. Five leading property “brands” emerged: Workspace, Land Securities, Brixton, Arlington and Helical Bar. In the recent Property Week brands poll, the winning brands were Land Securities, Londonnewcastle, Morley, British Land, CB Richard Ellis and Chainbow.
Land Securities used research to help pinpoint key issues, agree brand values and define key messages for all stakeholder groups. JP Morgan has described the contribution of its branding in reversing the trend against NAV to an earnings based value. Stonemartin uses synergistic brand association with the Institute of Directors and its IoDHub flexible offices.
The strategic process at Brixton Estates drove its branding exercise, which has resulted in the development of a new service (B-Serve) for the customer service, leasing, asset management and estate/contract management elements of its business. The change from landlord mentality to a more customer-centric model of service provider required the recruitment of an almost entirely new team. The prize was an increase in customer satisfaction from 57% to 85% and renewals that have more than doubled since 2001.
Rok Property Solutions was formed in 2001 with its roots in nine offices, a few hundred staff in the West Country and a share price around £1. Two years ago, Rok appointed a Brand Director to its board. As well as becoming one of a handful of property companies to gain a place in the Sunday Times Best Employer list, the company has grown to 40 offices, over 2,500 personnel and a share price of around £5.
The bedrock of Rok’s approach is customer feedback. The research is used to define service standards across the business. Snook, Rok’s CEO, says that the core of the Rok brand is its people.
Good, commercial, motivated people. Selected for their quality skills and their ‘up for it’ attitude to change and development.
Every new Rok recruit – from the most junior technician to the most senior director – spends three days at a residential course absorbing these values and the Rok approach to customer service. Every employee is on the same benefits package.
We recognise that the Rok brand is created by every employee who comes into contact with customers – therefore everyone must know what we are trying to do and is motivated to contribute to our success in every encounter.
When others in the property sector realise that brand means more than logos, we might see some significant development amongst property brands.
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