The serviced office industry has two types of operators. First there’s the type that tries to squeeze every dollar out of every client and out of every square metre in the building. Then there’s those of us who realise what’s more important is making clients happy and keep then for as long as possible. It’s what we call ‘sticky’ clients and it’s not as easy as it sounds.
If you can get it right, client are happy with the service as well as the office space and environment, they generally stay. A happy client also introduces other clients as well, so you can grow and improve your service even more.
Americans typically do it well, they have a lot of open space in their cowork offices and lounges and what that does is, it says to the clients is that the serviced office is not trying to maximise their income potential. The consequence of that is the worker likes that, they like the space, they treat it as their space, their home, and you get sticky clients. Unless there is a real reason for leaving, they don’t.
That’s the difference you get with a good quality independent operator. It’s all about making clients happy, not about maximising the dollar. We are very much in tune with this American model. We can’t run this business on every dollar, although of course we have to make sure that we’re profitable, we’re not interested in maximising value out of every square inch on the floor. For us it’s about client retention. We think that’s where the value is, so we spend a lot of time working with our clients, making sure they’re comfortable where they are.
Often other serviced office spaces don’t work like that. Some workers might find they’ve only got to go up and talk to the receptionist for 10 minutes and unless they’re careful they get a bill at the end of the month without realising it. That’s a good way of maximising every dollar but it doesn’t make clients very happy so you lose your stickiness.
You work out what it costs you to replace a client and it is worthwhile going that extra mile. Things like providing little breakout areas, giving clients drinks on a Friday night, making them feel very comfortable so they’re very happy to recommend others come in. A good proportion, probably 25% of our new clients now are from direct referrals which is a direct consequence of how we run our business.
Sticky clients are really important to us and these client referrals are like gold dust. We treat them like gold dust. For these new clients we continue to put in the work and provide the extra services and benefits to keep them happy and so then hopefully they’ll stick around too.