Case Study 1

Customer Focused Real Estate:

The Bruntwood Way

About Bruntwood

Bruntwood is a privately owned commercial property company established in 1976

by Mike Oglesby and a business partner (who lived on Bruntwood Lane). The first
acquisitions were factories in the Manchester region refurbished to provide serviced
accommodation. Following the industrial recession of the mid-1980s Bruntwood
shifted into the office property market. The first office building Bruntwood bought
was South Central in Manchester City Centre. Chris Oglesby joined Bruntwood in
1991 and was appointed Chief Execu~"Ye at the end of 1999.
Today, Bruntwood owns over 90 buildings in Manchester, Leeds, Liverpool and
Birmingham. Bruntwood has enjoYeQ} unparalleled growth; starting with only
40,000 of private equity in 1978, its asset value topped 1 billion in recent years,
before the global decline in values. It remains much lower geared and financially
robust than most property companies, despite the challenging financial times.
Bruntwood is an exceptional company, unlike any other property company, with an
extraordinary commitment to customer service, which results in tenant retention of
three times the national average. It 'does not use the word tenant; use of this word is
reported to have resulted in a contribution to a swear box for many years and the
refusal to use the 't word' in leases initially created some problems of acceptance
with solicitors. To us, it reflects the Bruntwood commitment to treating customers
differently. Bruntwood consistently ranks first in the Real Service Best Practice
Index for Benchmarking Real Estate Excellence.
The Bruntwood business was initially built upon refurbishment of existing
buildings; it has now recently completed new build offices, including One New York
Street, Manchester (Figure Cl.I).
This case study examines its customer focused approach and the benchmarking
systems used to measure and constantly improve its offer. It is based upon information kindly provided by Bruntwood and an interview with Rob Yates the
Customer Service Director and John McHugh, Customer Service Development
233
Manager, in November 2009.

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Bruntwood's Success

The exceptional success of Bruntwood, as we see it is, is set out below and connected
to comments made by Rob Yates, during the interview.

Buying well, spotting opportunities and recycling equity created through innovative and creative redevelopment to finance future projects:

we are perceived as big risk takers but infact if you look at us we very rarely
take big risks.

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Case Study

Figure Cl.2

1 235

A typical high quality reception area in a Bruntwood office bUilding

Recognizing that this is a cash business and creating a company around this so
that customer satisfaction leads to retention of customers and therefore drives
~ ..
the cash flow:
customer service, isn't just about happy smiley faces, and pulling in competitors ' customers. It started wiJjz the initial approach that came from America,
it's very much the flexibility of lease model, and that has been always the
same, we've never changed it.

Providing customer flexibility and a range of products from virtual offices,

meeting rooms, services offices and large lettings:
we have mallY examples of customers moving through our product range,
from virtual offices to serviced offices to small office lettings to large office
lettings; which Regus cannot do; our model is to have a range of services
and products which feed into one another.

1-

Knowing what stock is required to grow your customers and being able to provide
it at the right time:
we understand the markets which we work in, we have the biggest sales team
in the north west, people don 'f realize that, but it means we are geared up for
making sure we understand our sales to stock requirements ... if you haven't
got enough stock through the factory door, you're not going to be able to grow
anymore.

236 Case Study 1

--~--.

A significant part of this success is attributable to the creation of a brand driven bJ

and recognized for customer service. This customer service is driven throug!t
a number of sustaining factors including:

recruitment of customer service staff from the hotel and hospitality industries.
where quality of service is central to the difference between the best and !be
rest;
empowerment of staff, particularly general managers in each building
and
a commitment to continuous measurement and benchmarking of customer
service and acting upon the results.
It is interesting to note how Rob Yates confirms this approach:
we have more people in our buildings than we do in our offices, many of
these people are trained, in the hotel industry, they are used to forming relationships with customers and that relationship is the biggest single factor of
customer retention.

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Bruntwood publications set out the customer servicf team approach:

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OI4.r:ustomer Service teams make sure our buildings run to the highest standanis both behind the scenes andfront of house. For J1;ese people, delivering
outstanding customer service comes naturally: There are dozens of anecdotes
about the lengths our service teams will go to for the benefit of our customers.
From dressing as waiters when one was let down by a catering company, to
helping with jump leads- when a car failed to start, to simply changing light
bulbs and ordering taxis. The list goes on but the commonality reinains they'll do all they can to help.
In the interview Rob Yates illustrated the contrast between their approach and
most traditional property companies:

At development (X) the management is outsourced, compared to us, we insource our people. With a traditional landlord, how often do you see the
property manager? If he/she is acting on 200 properties in the Nonh West,
you might see them once in two years; and who employs the people?
There will be outsourced suppliers. Running a property [on this basis}
you have outsourced the relationship and the people working day-to-day
in the business.
You would not find someone like Virgin or another hospitality industry or
a hotel, who we try to model ourselves on, outsourcing their customer facing
people or the people who form a relationship with that customer. Yet that is
what the property industry does every single time.

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Bruntwood is not primarily driven by costs, as with many traditional property

companies, but by cash. As Rob Yates states:
lfwe outsourced everything - Asset Management, Facilities, Finance etc - we
could run this business with 10 people; and if you run this cost based model it
makes a lot more profit. Bruntwood has 360 people, for a property company,
it's a lot of people. We spend as much time looking after people, providing
service, as we do the business.

As a private company, Bruntwood has very different stakeholder expectations

than, say, a REIT based company such as Land Securities. This focus on cash, the
survival instinct of a family firm, has fostered the creation of a unique, customer
focused property company and a brand that is rooted in openness, honesty, integrity,
and a 'can do' customer centred approach.
The above also resonates well with a statement on the Bruntwood website:
Our customers have told us that the essential elements of our promise are
a wide choice of offices, commercial flexibility, customer service and long
term value for money.

Whist this case study focuses -on the benchmarking and customer recommendation survey it is worth :'rioting some of the other features that we attribute to
Bruntwood's success. These were discussed in the interview and providein -themselves a benchmark aga.in.1 which occupiers should measure their existing or
proposed offer of service: ..
being ahead of both the comPe'tition and regulation, for example Bruntwood's
leases are not only compliant with, but actually exceed the standards of both
the Code for Leasing Business Premises and the RlCS Service Cbarge code;
offering immense flexibility and the ability to 'tear up' a lease and start again;
smoothing service charges to a void financial shocks;
employing general managers of buildings and other service customer facing staff
trained in a service environment and motivated through performance systems
linked to customer feedback and recommendation;
future proofing both its own business and that of its customers by early planning
for sustainability, including the Carbon Reduction Commitment Energy Efficiency scheme and the impacts it will have for both landlords and tenants;
creating a Bruntwood green lease to deliver competitive advantage through
a sustainable approach; .
recognizing the importance of energy security, including the generation of electricity for its own buildings.
Bruntwood continues to innovate, with initiatives like Red Rooms, 'pay as you
go' meeting rooms that can not only be used by Bruntwood customers but other

238

case Stud

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businesses. As with all Bruntwood produc"ts, the focus is on cash, raising r""'.......
from difficult to let spaces on ground floors of buildings, offering an added vsIiooii
service to existing customers as well as a marketing opportunity for new cu:,t0nJL1111loi

We recognized a market place just for meeting rooms and re-branded a sub
brand of our serviced space as Red Rooms. It acts as a focus for new external
customers who are not in our serviced space or our buildings. An external
customer who comes to a meeting for the first time sees Bruntwood around
them, experiences the service quality and, who knows, in five years' time,
when starting a business of their own may just register a bell and come lO
us as a customer. It is another distribution channel for sales leads.

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Bruntwood's Values

It is clear from every interaction with Bruntwood; through its documentation.

website, or with its staff, that it has a very different approach, and this is evident
when examining its values.

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Our customers. Although we own over 90 office buildings it's our 1000
customers who make our world spin round. Our custpmers are our lifeblood
and we will do all we can to keep them happy. _
....
Our people. Our people make our business prosper and we want to invest and
develop in them as well as our buildings. We are an accredited 'Investor in
People' - this is the National Standard which sets a level of good practice for
training and development of people to achieve business goals.
Our community. Bruntwood's success is linked with the success of the regions in
which it operates. We help our communities thrive by giving 10% of our annual
profits to charity, encouraging our people to volunteer their time and skills and
fundraising for local charities.
Our environment. We all have a responsibility to reduce our impact on the environment. At Bruntwood we take this very seriously. Initiatives range from
encouraging our customers to use our recycling scheme, partnering with the
Eco Cities project, installing smart meters in our buildings to help reduce wasteful energy use and using environmentally sound suppliers.

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Bruntwood's Commitment to Benchmarking Customer

Service

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We believe a significant part of Bruntwood's success is attributed to its commitment

to high level benchmarking of its activities; a genuine attempt to integrate the

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Case Stud 1
benchmarking process into its strategy; and to act upon and value all feedback
received. Bruntwood does not value surveys such as the Occupiers Satisfaction
Index. It looks at best practice from other industries and utilizes both strategic tools
such as the Balanced Scorecard (as discussed in Chapter 5) and recommendation
surveys used for many years by companies such as Enterprise Cars and used in
luxury service driven organizations such as Lexus.
We examine, in this case study, two separate benchmarking activities that
Bruntwood engages with.
THE

REAL SERVICE

BEST PRACTICE BENCHMARKING SERVICE

REAL SERVICE is a member organization that provides a forum for sharing and
benchmarking best practice in customer service within the property industry. It
measures how far each member organization has progressed in the adoption of best
practice in customer focused property management. The REAL SERVICE Best
Practice Index has 12 members who provide evidence against 25 criteria organized
under six building blocks.
It is interesting to compare the building blocks with those developed by BAA,
discussed in Chapter 4.

Building blocks of the REAL SERVICE best practice benchmark:

Service Strategy
The Occupier Custom!!
Products and Services
People and Leadership
Business Operations
Measurement

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The annual REAL SERVICE report provides a report on each building block containing the following:

Performance Status. This shows how the organization has performed and how
this score has changed over the last year.
Key Findings. This summarizes the progress the organization has made to
improve best practice based on evidence provided and reviewed by REAL
SERVICE.
Member Actions. This is a record of some of the actions that the organization
plans to take in the next 12 months to enhance best practice.
Recommendations. Drawing on the best practices of other REAL SERVICE
members who may wish to be considered.

Bruntwood has been ranked number one consistently within this practice group
and its evidence provides outstanding achievement across th~ m~ority of the

%48

Case Study 1

categories. The benchmarking process does provide annual recommendations for the
company, for example:

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Utilize your expertise to help more occupiers achieve their own environmental
targets
and seeks to provide a process for continuous monitoring and improvement.
However, as Rob Yates comments:

We got nearly 94% in the last Real Service benchmarking exercise. Apart
from a couple of technical points with regard to the lease code of conduct
there was nowhere for us to go, so we are not really getting a lot back. A
lot of the other companies in the index cannot adopt our business model.
Whilst Bruntwood is clearly in advance of the competition"in respect of customer
service it does utilize all the feedback from the index and visit other companies to
compare its processes against. For example, British Land and their facilities
management operations at Broadgate are reco~ed as excellent and Bruntwood
visited them to learn from the way in which they do things.

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THE Cj.l.STOMER RECOMMENDATION SURVEY

.
The following information is extracted from material kindly provided and written by
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John McHugh, together with a copy of the 2008 Bruntwood Customer Recommendation Survey.
The customer recommendation score concept was developed by loyalty buSiness
model expert Fred Reichheld of Bain & Company and is discussed in his book The
ultimate question: Driving good profits and true growth, based on the link between
customer satisfaction, customer loyalty and profitability.
A customer's response to the 'recommend' Question serves as a <tr(m<Y',\ir';~~7
n ~""'Ull'C' ~ H'~J!VIlM' LV LUI: recommena" questlOn serves as a strong 1J
of customer satisfaction. According to Reichheld's research, customers with hi~
scores typically buy more products, remain customers for longer and recommend
service to others.
The Bruntwood customer recommendation survey asks every customer's ......~
decision maker only one so-called ultimate question:

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Please rate the likelihood you would recommend Bruntwood to another business, friend or colleague.
Responses to the customer recommendation survey are recorded on a 0-10
with 0 meaning the least likely to recommend and 10 meaning the most ti.kmrecommend. This approach is very different, and more brutal than
surveys, such as the Occupiers Satisfaction Index (OSl). Only scores of 9

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equate to a recommendation and in Bruntwood's eyes only these scores guarantee

retention of that customer. A score of below 7 is a detractor and 7 and 8 neutral.
The difference between the percentage of recommendation and detractors is the
customer recommendation score. For example, if 50% of a building's customers
respond with a 9 or 10, and 30% respond 0-6, the building's score would be 20%.
The survey is managed externally to ensure objectivity and to allow customers the
opportunity to provide feedback in confidence.
Bruntwood's net recommendation .s core in 2008 was a very impressive 26%. As
a general rule of thumb UK companies are found to have a net recommendation score
of around 5% with US companies now up to around the 13% mark. If the OS1 was
done on this basis we believe the results would probably demonstrate a net recommendation of around -3%. Mobile phone network companies have had recommendation scores as low as - 18%, indicating more detractors than people who
would recommend them. However, some car manufacturers such as BMW and Lexus
have scores of over 30% and help to enhance a company's reputation and d yve10p
completely satisfied customers.

The recommendation survey plays an important part in Bruntwood's commitment to continuous improvement of customer service. The data can be examined in
terms of overall performance, by region, building and categories. The categories
allow greater detail to be exru&Ded within the context of the overall recommendatioI}
scores. Examples of categories examined, resulting in detailed customer comments
and feedback are:

n-

or
er

PM: Structure and Fabric

PM: Services
Customer Service
Lease Flexibility
Lease Contract Issues
Value for Money
Product Quality
Moving in Procedure
Billing and Invoicing

-.

Whilst Bruntwood has a very impressive recommendation score which underpins

its retention rate of three times the UK average, it inevitably has some areas that
score less than 7 and are considered a detractor. These are picked up in the survey and
any individual comments examined and acted upon. As Rob Yates states:

We may still score low on some building issues - e.g. where a lift has not been
performing well. But in fact we find that a few detractors can present an
opportunity because we know we can pull the customer round, we know we
can do it. We have had a number of customers who may have issues like