When organisations get so big it is hard for them to continue to consistently deliver great customer service. And in some cases sheer size means poor customer service. Some large companies: Tesco, Apple, the AA, seem to manage to maintain their customer focus while others (and the interest here is the UK property management sector) like Peverel (who manage over 150,000 homes) and Countrywide (managing 60,000) seem to lose customer service discipline. The irony is that this was never their intention.
The net result of this is that there will be a period of de-centralisation in the property management sector as leaseholders focus on getting the service and value they want and deserve.
Why Some Big Companies Fail
There are four or five really big residential property management companies in England and Wales. Between them they deliver management services to well over 250,000 residential leaseholders, out of a total of 1.6m leaseholders. A decent slice of the pie.
Now let’s imagine you’re a senior manager at a property management company with 100,000 homes in management. What do you worry about? Mrs Miggins’ flood at Flat 23 Holborn Court or the macro costs of cyclical maintenance in the South Region? It’s easy to understand how - as property management companies get significant in size - they inevitably lose their eye for detail.
I accept Mrs Miggins has a dedicated ‘front line’ Property Manager employed by Huge Property Management Company Limited, whose job it is to serve her immediate needs and wants. But go up the management chain and very quickly Mrs Miggins’ issue - which to her is actually critical - becomes pretty insignificant.
What if Mrs Miggins’ property was managed by a local, more modest sized company? Let’s call it Joe Bloggs Residential. Would the approach be different? Because Mrs Miggins’ flat takes up a bigger slice of Joe Bloggs’ portfolio Joe is much more likely to care. Plus if Mrs Miggins is unhappy it’ll be much easier for her to flag up her problems with senior management – who similarly will recognise the importance of Mrs Miggins’ business and act accordingly. So the size versus customer service correlation seems to be: big corporate equals facelessness and small local business equals customer facing.
It should be noted some really big companies do get customer service right. Apple is truly enormous and yet enjoys a reputation for delivering great service at the ‘front line’. How? Essentially it’s a result of strong leadership. Everybody at Apple understands, with absolute clarity, the importance of customer service. They also understand (and this is critical) the relationship between good customer service and the success of the company. Apple consumers can easily shop elsewhere. Apple employees know this. It’s the same with high street retailers. M&S staff know customers can easily shop next door if they feel the ‘offer’ is better.
Changing Managing Agent Is Too Much Hassle
Which leads us neatly back to Mrs Miggins who is, in a sense, stuck. Some of the larger property management companies have recognised their customers are to a certain extent ‘captive’. It takes an awful lot of effort for leaseholders to change managing agents. The sheer hassle of changing managing agents puts leaseholders off. Demographically speaking leaseholders are in work, in good jobs, with no kids and plenty of disposable income. I think they’ve better things to do than work through the red tape of getting rid of their irksome managing agent. Consequently leaseholders get bad service and bad value. Furthermore, some managing agents have been accused of employing tactics to prevent leaseholders from changing agent.
What Does This Mean For The Property Management Sector?
It’s widely accepted Peverel has a poor image. Indeed it’s busy trying to reinvent itself (following the recent rescue package). The re-invention, if it means improved services for leaseholders, is commendable. But can it continue to grow at the rate we’ve seen over the last two decades? This blogger believes not.
The internet has levelled the playing field. Leaseholders, from either end of the UK, who in the past may never have had the opportunity to share their common grievances can quickly mobilise themselves and create a powerful voice for change. Websites can easily be set up. Stories are shared and perceptions cemented. Don’t believe me? Just Google ‘Peverel’ (Spanglefish was sixth down page one, when I last looked).
Webocracy In Action
The sense is that leaseholders are recognising that ‘fit’ is important and they want a property management company who is local, responsive, and customer facing. As a result the sector is ripe for change and there will be a more fragmented property management sector in the future. Ultimately leaseholders will get the service they deserve. That it is starting to happen now is largely down to the digital revolution.
- The big players never intended to suffer with poor reputations regarding their customer service
- The big players are attempting to resurrect their customer service image
- Leaseholders realise that ‘fit’ is a significant factor when employing agents
- Leaseholders realise that smaller property management companies are more committed and devoted to any given block because it represents, pro rata, a significant slice of the agent’s business
- We will see a trend for smaller block and property management companies as the sector goes through a spell of de-centralisation.