City Builders in Sync with Customers 1

Thursday, September 24th, 2015
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A chance to love our suburbs is within reach. The way forward is clear: the customer knows what they want better than you do and is happy to share.

Australian property development is fuelled by some of the most entrepreneurial architects and designers in the world. A 2015 industry survey found that 80 per cent of them wanted to launch their own business and 78 per cent said they are pursuing their passion. As a world leader in building design, Australia is pioneering innovative luxury and high-performance design for communities and cities.

A Suburban Challenge

Now the largest industry in Australia, property development is driving urbanisation to new levels. The total number of housing approvals in Australia was 19,298 in July, up from 18,523 during the previous month. Changing lifestyles and demographics is driving strong apartment approvals in Australia’s largest capitals, with Sydney seeing a 49 per cent jump in apartment approvals to 4,468 during July. However the number of standalone dwelling approvals in Australia has been trending downward month on month with a 2.6 per cent decrease in July to 9,479 approvals.

While some of the fastest growing suburbs are seen on the edges of Australia’s main cities, suburban estates are often viewed as socially isolated, designed around cars and lacking vibrant shared spaces. This type of development discourages interaction and a sense of belonging. With increasingly sceptical home buying customers, it is now more difficult to deliver and sell suburban estates.

Over time, many estates trend toward the industry average of pricing, lifestyle and design. Developers begin to lose a passion for customers and the industry. Even the best developers are struggling to show how they are different from others.

From living in Asia, I have identified that the root cause is a struggle to collaborate with suppliers and customers for success. It is not easy leading in an environment that is continuously changing, yet the developers that can collaborate are able to find service-market fit with customers. Such developers show a passion for customers and a will to win.

Collaborate and Connect with Customers

Collaboration must be across the entire value chain shown below, including organisations, places, people and processes. Managing a value chain successfully drives service-market fit with customers. If the value chain breaks down, an area that easily falls apart is the communication between the developer and customer. Effective communication with customers is the number one developer success indicator and once broken is difficult to repair.

Development Value Chain

Effective collaboration starts when a customer allows you to understand what they want, which informs your awareness of new trends that could disrupt your business. I encourage you to use this four-step model in customer collaborative design:

  1. Define your customer: Know the personality of your customer and be specific.
  2. Form a community concept: Customise your design around the real needs and wants of that customer to create their ideal community.
  3. Market the concept: Bring the concept back to the customer you defined and gauge buyer interest.
  4. Evaluate your approach: How strong is the communication between the developer and customer in identifying needs and wants?

A Case Study: Landmatters

With a vision to prove the business case for performance design, developer Landmatters Currumbin Valley approached its design and planning process for a new estate with the customer in mind. Landmatters gained extensive input from local residents and interested customers to create an estate with a strong sense of place and community.

The developer was able to identify a customer wanting to reduce household costs and realise sustainable building practices in a community. Through their collaborative customer consultation, Landmatters created a clear community concept. As a result, Landmatters received over 85 per cent in pre-commitments, validating the success of their customer approach.

To What Extent?

It is important to remember that building a great concept with your customers isn’t about creating lots of different features that are somewhat related. Rather, it is all about providing a cohesive plan with well-defined parameters such as your expected return on investment.

The right customers will accept “no” to additional features if you have helped to create a value proposition that meets or exceeds their needs. If you have created enough perceived value for customers in the concept plan stage of collaboration, you can achieve exceptional ROI and brand value. Setting expectations as well as explaining your concept development process helps put customers at ease and avoid any unwanted surprises. Trust is crucial in collaborating with customers and you can ensure this by explaining the parameters early on and ensuring that any lines that are drawn are reasonable and equitable among all customers.

By testing different concepts, developers can understand real-world customers, how to reach them and most importantly new ways of thinking. Suburban estate plans can no longer afford to plan in silos. Success comes from collaboration across the value chain with a commitment by developers to listen and learn from customers. Capturing the passion among designers and architects can assist in delivering innovative design to meet the needs of customers. Collaboration is the strategic piece in delivering successful and valuable estate communities.

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  1. Gavin Duthie

    Spot on Grant all businesses should take note of customer requirements as well as diversification.