Watch: Customer experience in HMOs: Why it’s the game changer in modern shared living

Lee Dumbarton (00:09.871)

Thank you very much. Good afternoon, everybody. What pleasure to be here in front of the creme de la creme of the HMO industry at this lovely event and to follow on from some of the words that Caroline have already given us today and Jordi, which have been absolutely fabulous. So my name is Lee Dumbarton. I have two businesses in the HMO space. Urban Home, which is an HMO lettings business operating in southwest London and Crate Property Investments.

which is growing those properties, those investment properties in HMOs in southwest London. And here’s my team, which is fabulous. Before I get going, what I really want to do is just talk to you about something I was talking to my business partner, Peter, about just a couple of days ago, which is the concept of happy money. Now, who’s come across the concept of happy money before? Because actually, really sort of dovetails with what Caroline was saying earlier, and that is that…

As landlords and as investors and as agents, it’s really important that income stream is there. But the way that money flows to us each month can flow to us in one or two ways. In a way that makes us feel good about the way that money flows to us or in a way that’s purely focused on the numbers. And I’m really pleased to say that I think we’re all here today because we’re all taking huge steps to improve service and our offerings. And we actually really do care about earning happy money. But also, if you flip that around, how many of your tenants

would you say are really happy to hand that rent over every month? Now, many of your tenants begrudge paying that rent and how many can see the value you add as an HMO landlord, as an HMO operator, and are really pleased to pay that rent each month? Or as pleased as you can be to pay your rent each month, shall we say? So, it’s really, as it’s already been said, it’s looking at our tenants not as pound signs, but as customers. And I believe right now, more than ever,

it’s really important to consider that customer experience is valued higher and higher. And as consumers, our expectations are going through the roof and Generation Z’s expectations are even higher than ours, So we’ve got to gear up for these changes and we’ve got to gear up for these expectations to keep climbing. And with that, and again, I talk about Generation Z, patience is at its lowest. Yeah, so…

Lee Dumbarton (02:27.886)

We live in an instant world, instant results, instant gratification, and our tenants don’t understand properties like we do. They don’t understand that a small decorative repair isn’t a big deal. And they don’t understand that those little bits and pieces that we’re not getting on with aren’t as important to us because we don’t see the health and safety ramification. And it’s actually fine for that issue to be dealt with in two weeks’ time because it’s not rushing water. So all of these things mean that we’re having to change in a role. But actually, the fact that

we’ve got this instant world on our way is a real opportunity. And for those of us that have managed to solve that and get it right, we’re onto a real winner. Now my mic’s attached to me, but this is my mic drop moment, guys. This is the one sentence that if you take anything away from my speech today, I want you to remember. And that is exceptional customer service, not about the product that you sell or the service that you give, it’s about the way you make somebody feel. Okay? And the reason I make that point,

is because the way we make somebody feel will always be remembered. People might forget what you say, but they’ll never forget how you made them feel. And so that’s a really important takeaway from today. If you don’t remember anything else from what I said today, please remember that one line and please think about how you can weave that into your business and into your systems. Because lots of people here today will be talking about numbers and number analysis and number paralysis and all the other things that we do as investors and business owners.

But actually the businesses that focus and place huge importance on customer experience ultimately are more financially successful. And we’ve heard that from the two previous speakers already today. So every time we have an amazing customer experience, that becomes our new yardstick. So this is not a stagnant thing, guys. We are constantly having to re-evolve and re-imagine the way we deliver that customer experience. Because everyone is getting that little bit better and we’ve got to stay ahead of the curve.

So, here are some stats for you. These are only stats I’ve got for you today, actually. But this is information taken from the Institute of Customer Service. It’s a bang up to date slide. This information is an annual thing that’s put together in July of 2022. And you can go onto the Institute of Customer Service, you can download this annual document. It’s a 70, 80 page document. There’s some really useful information there. So I definitely encourage you to do that. But here are our 10 top

Lee Dumbarton (04:50.093)

performing UK companies for customer experience. And what I find fascinating is how they’re being valued and how they’re being assessed these days. So we have customer ethos, emotional connection to that business, complaint handling, and ethics. And these are the 10 that have ranked the highest at the moment in the UK. And there’s some that aren’t a big surprise, but there’s one or two that are to me. I don’t know about you.

But let me share some stats for you. 13 % of people have made a complaint in the last year. 16 % have experienced a problem with their service just in the last six months, according to this data. Two more stats for you. 45 % of people choose an organization because of its local values or local commitments. I think that’s really important for us to remember. There’s a lot of national operators out there, but if you can own your space on the ground, there’s a huge value in that.

And actually 35 % of people will be prepared to pay more for the right service and experience. And we can already see from examples like Waitrose and Apple, people proud to shop there, people proud to own those brands. And so absolutely, if you’re looking to operate in the top of your market space, and for us, it’s about trying to own the top 5 % of the rental market, that’s absolutely possible.

So what else can we learn from these top 10 operators? Well, for them, they’ve got their culture rights. Their teams understand their mission. Everyone in their business is facing in the same direction, and they’re able to move forwards towards a common goal. And that can’t be underestimated, and they wouldn’t be able to grow in scale and provide the clear levels of service they do without working towards common mission and common values. So all successful businesses have a clear mission statement, everyone facing the same way.

They share those values, and actually they understand the problem they’re here to solve in their industry. And they understand exactly how to go about it. And by having that mission and those values in place, it also enables them as a team to make the right decisions. And it guides them when they’re serving their clients. They know exactly what they need to do to uphold their customer experience. And guys, I don’t know about you, but I see it as an absolute pleasure to be able to provide accommodation to people.

Lee Dumbarton (07:13.29)

because we’re often able to serve them at their most vulnerable time. heard again from Caroline’s talk earlier about the example of her 23 year old that’s looking for a room. When we’re serving people at a time of vulnerability, high stress, we forget we deal with this day in, day out, but moving home is enormous to some people. Yet we get to use our experiences, our skills to put their mind at rest and ultimately to give them a safe home. And I always look at it that actually in our area, if they rent with us,

we’re potentially saving them from a lesser experience elsewhere. And so being in a room of people that are like-minded is a real privilege to discuss that with you.

Having nice bricks and mortar is one thing and we’re all producing lovely properties and we’ve got the karate chop cushions in the photos and we’re nailing it. We’re producing nice products for people to live in. But actually customer experience is more than just the bricks and mortar. As I said, how we make people feel. People need to have the confidence that they’re dealing with the right people. They need to know that they’re in good hands. They need to know you care. They don’t want to see you.

as a source of loss of earnings, that they want to see you as somebody that’s providing the right standard of accommodation and actually has an emotional connection and interest in dealing with that human being.

They want to feel informed. I often talk to tenants that have come to join us about the fact that they don’t ever hear from their landlord or they don’t understand what’s happening in the property. They never know when someone’s coming to deal with an issue and strangers just turn up and let themselves in the front door. All of these things are not conducive with co-living. So keeping tenants informed is so, key. They don’t want to wait. We spoke about that patience is thin and it’s to get more thin in Generation Z. So again, solving that problem is so, key.

Lee Dumbarton (09:01.683)

And ultimately, guys, people want to be served at the highest possible level. And I go as far as to say that they expect it now. It’s no longer a nice to have. It’s actually an expectation. We can all stand here and think about experiences we’ve had as consumers. We can think about the great experiences we’ve had, the experiences that we were happy to leave a Google review for. And we can also think about the worst experiences we’ve had. Restaurant, whatever it is where you’ve kind of thought, that’s it, I’m not going back there again, or TripAdvisor’s found out all about it.

But actually being in the middle ground to me is far more dangerous. If we’re vanilla, if we’re just in the middle ground of customer service, you’re never going to get a mention. If your properties are in the middle ground, they’re not getting a mention. And actually, when we’re middle ground operators, with our customer experience and with our service offering and our properties, we can only compete on one thing, and that’s price. We don’t have that issue right now because there’s a stock shortage. And actually, we can rent our rooms all day long.

but we should build our businesses so that they can cope in any situation. What I want to do is wrap this up talk to you about my little service wheel here. This is my service wheel to operate in the top 5 percent. This is, again, just a little takeaway for you guys. Service journey cannot stagnate.

We’ve already said that things are constantly evolving. Every time someone has a new best experience, the bar has been moved and we’ve got their new bar to surpass. So we’re constantly looking to change, to reinvent and to better what we’re doing and to take friction out of our service points. Now, how easy is it for somebody to join your business? How easy is it to take a holding payment, for example? How simple do you make dealing with maintenance for that individual and how much

resistance is in your processes because it is easier for you internally to deal with, but it scuppers them and the external message that you are giving. That is something we are constantly looking to review. Of course, tech is a huge, huge thing in your service offering. My personal belief is what tech does for us is it deals with everything that we don’t have, all the mundane stuff, all organisational stuff, all the simple communications, but actually it should free us up.

Lee Dumbarton (11:23.22)

to have more meaningful connections and more meaningful experiences with our clients. And that’s how we use tech in our business. We continue to hone our service to think about the brand we purvey, the message we want to give to live true to our value and our mission statement, and make sure that our experience is always improving and as good as we can be. And of course, all of that is to make sure that we keep our clients at the forefront of what we do. And if we treat our contractors

our landlords, our investors, our tenants, all as clients, then we are going to be able to build a business that’s scalable and will continue to operate in that top 5 % of our market sector. And guys, in the top 5 % is where we’ve got some amazing people, some amazing tenants that actually are aspirational and really care about the way they’re getting on in the world, and they’re an absolute pleasure to manage. So, that’s me.

That’s my talk today. I’m happy to answer any questions. Thank you very much.