As the world continues to work remotely, a new age of tenant engagement has emerged, leveraging technology and digitisation to connect and communicate with at-home workers. To celebrate the experience experts from our client partnerships, we have...
Most businesses involved with tenant service in CRE are, by their nature, made up of dense, complex structures. Uniting the processes of a landlord and property manager — or a landlord and a separate managing agent – with a single piece of tech can be a daunting exercise, because the two do not often share a single operational playbook or rhythm.
It is tempting (and completely understandable) for well-capitalized landlords, owners or property management firms to say: "I know my business better than anyone. I know the industry and its challenges. Why shouldn't I create my own tenant experience platform, and get rid of the middleman?"
We know, from extensive experience, that haphazard ventures into the production of proprietary tenant experience technology seldom pan out. We have worked with landlords in the past who have tried – one, in fact, invested big money into a prototype which was then abandoned for Equiem two years later. It's not impossible, but you do need to consider and plan to overcome these five hurdles.
1. The cost of a TenX platform
Developing your own tenant experience app (just a single mobile app, mind you, not a mobile and web app) is extremely expensive: hundreds of thousands at a minimum. If you commission an app development firm to produce your product, this cost can easily compound through multiple rounds of prototyping and iteration. A decade in this market has taught us that SaaS is especially susceptible to Hofstadter's Law (things always take longer than you expect, even when you take into account Hofstadter's Law).
Once the tenant app is built, you will face maintenance costs in the area of $100,000 per year. Let's say, after two years of operation, you want to augment your platform with an e-commerce plug-in, or a host of integrations: the price of evolution is high, especially given the speed at which proptech moves. By the time you release your app, existing providers will have moved two years ahead of you in terms of functionality (more on this below).
Here's an example of a common scenario. You:
- Spend hundreds of thousands of dollars to create an app prototype
- Then discover you need to integrate your platform with a work or maintenance request system — it's a must-have, so you pay the cost to develop the integration
- Realize you also need to integrate your existing flexi room booking solution with your platform back-end
- Discover that your tech stack is not compatible with the infrastructure of the flexi room booking system
- Uncover a host of apps you cannot integrate with in the future, due to the way your tech stack is designed
From there, do you scope and implement a costly redesign, or forge ahead with a fundamental flaw in your infrastructure? These are the kinds of conundrums inextricable from the SaaS business model.
But they needn't be your conundrums. Tenant experience technology firms have teams of engineers and developers dedicated to looking ahead, to anticipating future needs for technology and integrations. Equiem has more than 250 staff across its global teams, and each team member is tasked with helping Equiem achieve the goals of its core business: tenant experience. That is a considerable headcount increase for landlords, whose business structures and goals are already complex and varied.
2. The time
Our developers estimate that a tenant experience app, with a core set of features, requires one to two years of development. By the time you have a prototype, the other market players are minting their latest market-leading innovation; by the time your app is market-ready, with all bugs ironed out, the baseline scope of tenant experience technology features has changed forever. In 2020 alone we developed and released three separate solutions to the market – that's a pace you can only match with a full-scale development team.
3. The expertise
Commercial landlord companies and technology companies could not be more different. Tenant experience technology may bring the challenges of CRE into focus, and solve them for landlords in succinct ways, but that does not mean the solutions themselves are easily developed or deployed.
Operating a SaaS business model alongside a traditional CRE landlord model can only work when the two businesses operate independently. So, if you want to create your own tenant experience app, you are effectively signing up to create an all-new entity — with its own goals, structures, executive, team, branding, and so on. You'll need the right talent, too — and it's not common that CRE experts and SaaS experts travel in interlinking circles.
As said above, tenant experience and engagement form Equiem's core business. From our executive leadership to our board of directors, we are equipped with the right knowledge and experience — both about CRE, and about SaaS — to evolve our product based on the changing needs of landlords and the market.
4. The risk
End-user technology solutions impose a high baseline of risk. Security and privacy certifications, for example, are notoriously difficult to attain. Satisfying GDPR alone requires a significant and ongoing investment of time and resources — but then there is PCI-DSS compliance to chase, and regional regulations to satisfy.
You will also need a team dedicated to data security. Data breaches can be catastrophic for a business (the average cost in 2020 was $3.86 million) and when they involve personal customer information, especially so. Landlords deal with enough risk on a day-to-day basis to make the addition of large and complicated software an unattractive prospect.
5. The current market landscape
Currently, the tenant experience technology market is mostly characterized by specialist firms who solve one particular landlord or building management problem. There are building operations platforms, analytics platforms, CRMs, work or maintenance request tools, flexible space booking platforms, communication-only apps, and more. If, for example, you need a help desk platform and a tool for communicating with tenants, that often means selecting two different operators and software solutions. Often, those solutions do not work seamlessly in tandem.
Consider this, too: Future-proofing is a luxury available only to those who have a complete, market-ready product on which to build. Everyone has a different prediction about the future of work: Cushman & Wakefield expects office demand to continue, while CBRE envisions the rise of a "hub-and-spoke" model. With an adaptable tech stack, you might be able to hedge your bets — invest in flexible space systems and integrations over communication or engagement tools, for example — and emerge in a reformed market with a viable product. But you need a solid technological footing, as well as extensive research, before you even place your bet.
So, what will you do? Will you attempt to be the one-stop shop, or will you specialize and tackle specific problems with tailored solutions? Whichever approach you take, you'll need to be all-in.
Equiem has been in the market for almost 10 years, and it has taken us that long to perfect, iterate, and innovate. We have gone farther, achieved more, and made more mistakes than even our competitors. You can benefit right now from our experience and our product, save yourself all the associated expenses, and focus on offering superior customer service. However, we can understand your keenness to offer your own customer experience to your tenants. Good luck!
Want to find out more about how Equiem products? Book a demo today.