The fact that the real estate consulting industry emphasizes the importance of trust and personal relationships is nothing new. Nor that it is an industry with relatively high mobility, foremost between employers rather than within the same one. Therefore, it is surprising that more is not being done by the companies themselves to integrate built-up trust capital into both the organization and the brand. Not only is this a way of ensuring short-term profitability, but it is also one of the most important aspects of future-proofing the business.
One significant part of the explanation for the way the market has turned out is, without doubt, customer behavior. For many buyers, it is simply more important who the consultant is rather than the company he, she or they represent. This is particularly evident in services such as transaction advice and building rights, where well-established network and good contacts are directly crucial to successful outcomes.
The following implications can be seen as both an opportunity and an obstacle. It means that the personal relationship of individual consultants can result in major business opportunities, assuming the relationships remain within the company. Moreover, it also implies a vulnerability for the business when (rather than if) key individuals choose to move on, due to risks of the client relationship following in a move to a competitor. In the short term, this concern has implications for the business – whereas in the long term, this could potentially affect the entire company value.
No matter the perspective, there are plenty of benefits for industry players if they choose to invest in a more systematic approach aimed at building loyalty among both employees and customers. Today, there are companies that have succeeded well with this, and lessons to be learnt. The commonality between these is adopting a model with several critical elements.
- Incentive structure for senior employees
The direct threat is senior employees choosing to leave the company. Therefore, an important aspect is to identify the factors that are critical to retaining talent over time and to create incentives for them to want to stay – to understand the drivers and ensure that these kinds of opportunities can be created within operations.
- Establishing structural capital
By creating an infrastructure that enables knowledge transfer and embedded learning, the structural capital is established in the organization. Promoting this work in those parts of the business where it is possible and encouraging key people in the company to share both knowledge and contacts with junior staff, is therefore a key activity.
- Thorough review of branding
Established brands with high awareness can be an important factor in the purchasing decision for many customers – thus reviewing how the company’s collective experience and skills can become part of brand building is an important part of establishing an attractive and profitable position.
Breaking free from individual employee dependency should be a key concern for real estate consultancies, both today, tomorrow and those who succeed in this have a great opportunity to build a long-term successful business. Those who fail risk the opposite.
Johanna Lundin, Project Manager and Kristian von Seth, Partner