Real Estate Branding - Added Value Asset Management
While the ‘b’ word, branding, is now more frequently heard at real estate conferences, there is still the attitude that this is simply about marketing activity and corporate identity usage. The concept of shopping centres or business centres as destination brands with their own distinctive personality and culture is still difficult for building professionals to grasp it seems. Everyone acknowledges the financial value of classic product brands like Coca Cola, where the intangible brand equity far outweighs tangible assets, but the perception persists that the real estate sector is only comfortable with tangible balance sheet valuations of yield and property values. This is odd in that ultimately rentals, service charges and ‘commercialisation’ – that unfortunate word to cover non rental income – depend on optimum customer spend in the case of shopping centres and successful tenants in the case of retail, leisure and business centres.
The connection between a centre’s brand equity (image and reputation) and its sales performance (as a true reflection of its ultimate value and income potential) is not always recognised. Real estate professionals tend to be more comfortable with hard, reliable property valuation rather than ‘softer’ emotional added values cited by branding professionals. Projected sales performance is the key component of brand valuations, but property valuations do not seem to embrace the concept of investing in the vital ‘added values’ that make a destination brand a first choice for its target audiences and users. It is easy to put a value on physical remodelling, less easy for a communications / marketing strategy. In neither case can sales improvement be guaranteed, however property professionals tend to retreat into their known comfort zones. The result is often well designed but soulless ‘shop fitted’ centres that have a complete absence of personality, visitor communication and inspiration. Such centres often fail to create the perception of a destination venue run by management who really care.
Graphic-led treatments, which inspire, inform, create memorable experiences and ambience, and must be seen as part of an overall communication strategy. Nowadays this involves digital screen technology and increasingly sophisticated lighting and projection installations. Software can now control changes in mood, image and content. Architecture becomes the ‘screen’ and stage set for different activities externally and internally. Clearly, property professional courses need to have a module on latest communication strategy and media as an integral part of their studies along with lease, negotiation, valuations, capital cost and maintenance number crunching.
The prevalence of digital screens in every centre also exposes the often complete lack of understanding that these are not just a space to sell as an income stream but potentially key communication ‘touchpoints’ for the centre and visitors. This is a classic test of ‘commercialisation’ – balancing brand profile development ‘cost’ with an operational income opportunity.
The ‘costs’ of advertising, signage and communication are often not normally seen as ‘investment’ as no one can directly measure ‘worth’ short term or long term. The marketing strategy for a centre should balance the long term need for building real brand equity and the short term need to drive sales and footfall. Sadly, short term actions can easily destroy long term credibility and reputation. Footfall is measurable but a poor experience is less easily quantified in terms of the likelihood of a future visit.
As buildings represent the most expensive manifestation of the brand, leveraging this should be a given. Destinations can use their architecture as a brand icon and corporate signature – think Harrods, the O2 Millennium Dome or Wembley Stadium. However, there is still little understanding of the potential for architecture to be a distinctive brand element in providing a memorable signature. Too often, branding becomes a subsequent badging exercise to elevations and building profiles that could have been major brand statements in their own right. That should be the obvious benefit of aligning architecture and branding in terms of visual manifestations. However, branding should be an expression of an organisation’s values and ethos if it is to be more than a cosmetic packaging exercise. Successful architecture, where ‘form follows function’, must meet operational criteria and quantitative, measurable issues – the right spaces, efficient planning and circulation; practicality, durability; capital versus maintenance costs. Architecture must also meet emotional functions – ambience, atmosphere, places that inspire, excite, are interesting and make you feel good. These are the ‘quality’ factors that make a centre memorable and distinctive. They can also make or break the success of a place. In a world of me-too, cloned solutions, tenant mixes and formats, the emotional factors, which can differentiate one centre location from another, become key to creating a distinctive synergy between branding and architecture.
An organisation’s ‘values’ are now transparent. Sustainability has brought into question basic developer activities – environmental impact, effect on the local community and the new, increasingly tangible evaluations – carbon footprint, green materials, local resourcing, maintenance costs – heating and cooling, sourcing and technology. The list gets longer and longer. ‘Green washing’ with token grey water recycling and provision of more cycle racks is not a convincing PR strategy if service costs are seen as exorbitant and local high street shops are going out of business due to a new centre development. Politicians and local interest groups have their own audiences to satisfy and a developer’s history and environmental credential become significant elements in the business brand profile of the centre.
Increasingly the difference between B to B and B to C audiences is becoming blurred. The business face of a centre and its corporate equity and reputation has become an integral part of its consumer brand profile and activities. People now ‘look behind the label’ regarding an organisation’s assertion of sustainability. Any mismatch between claims and behaviour can be easily publicised by interested parties and community trust undermined. The increasing power of social media is something no corporate organisation has learnt to control. Lobby groups create major communities of outraged, upset customers overnight with some effective cut and paste viral communication using Facebook, twitter and You Tube. The old rule applies – ‘do what you say you do’ and respond positively to complaints and black PR. How to say sorry has become a key factor in any branding strategy. Marketing managers now have the potential of leveraging sophisticated software technology to track and interface directly with customers through loyalty cards and phone apps. But they have equally sophisticated consumer controlled technology and media to respond to – who is targeting who?
The property industry has to embrace branding as a key business strategy and management principle – retailers got it many years ago and banks are still struggling to become customer centric by learning from retailers. Surely it is time for property professional and developers to get their act together and leverage ‘branding’ in the fullest sense. The comfort of a balance sheet and its apparent ‘certainties’ will always be more compelling to those who see the world through a property valuation rather than realising the potential brand equity of an asset. Perhaps a Coca Cola centre may help change perception. The brand over the door should create as clear an added value as it does on a bottle. Loyalty is a powerful factor for generating and augmenting revenue. How well does your local Mall measure up against this kind of value? How strong i
s its equity as a brand destination and experience?