This guest post was written by Flip Howard, Founder of WORKSUITES.
WORKSUITES has not only stayed in business but thrived and grown from our first executive suite location in 2001 to 19 locations 18 years later by focusing on providing maximum value to small business owners. I always strive to make sure that if I were selecting an office for myself, after weighing all the factors, that I would choose us.
That said, the landscape in which we operate has changed dramatically in the last few years. I see a lot of traditional executive suite operators trying to shift their business model to stay relevant amidst all the new coworking competition. Some are doing it better than others. The ones who are doing it poorly are doing things pretty much the same way they’ve always done everything. They try adding some open/shared space near the reception area and calling that their "coworking offering." Unsurprisingly, this is usually not very successful.
I believe that every good company needs to constantly evolve and re-evaluate how it operates. We don’t look at the ways in which the rise in coworking has inspired us to evolve as us “staying relevant.” Rather, we have seen it as an opportunity to take advantage of a rising tide. By implementing some of the best practices more common among newer coworking companies than among traditional executive suite providers, we have seen a dramatic increase in both new customer acquisition and current customer retention.
We have not shifted our target market. There has always been — and there always will be — plenty of people looking for private, professional offices. In fact, we have clearly seen that the increased market awareness of the basic concept of shared/flexible workspace (and we have mostly WeWork to thank for that!) has brought about an increase, not a decline, in the number of people searching for good old-fashioned drywall private offices. But that does not mean that executive suite operators should keep doing business as usual. There are many things that have been common in our industry that are simply becoming obsolete, and clinging to them going forward will be a recipe for decline.
How can traditional executive suites thrive?
In order to take advantage of — rather than be threatened by — the current disruption in our industry, here are a few specific things I would advise traditional office suite operators to consider:
Establish a relationship with your customers
View your relationship with your customers as an ongoing retail/customer service relationship, not as a landlord/tenant contractual transaction. This is at the core of what coworking companies have done much better than traditional office suite providers. Be straightforward and transparent with your pricing and policies. Re-think all your pricing and policies — especially when it comes to issues around term lengths and “gotcha” provisions in your leases or service agreements. Today’s coworking customer will not tolerate bait and switch tactics or being nickel-and-dimed like they would in the past — and this is a good thing.
Understand your target market
Know your target market and stay true to who you are while you evolve. Some companies try to appeal to very different groups simultaneously and end up appealing to no one. It is good to freshen things up and make things more contemporary but do so in a way that does not make you unattractive to the core customer base you already have. As the shared space industry continues to grow, there will be plenty of space for many niches. Find yours. Don’t try to out-millennial WeWork if your current demographic is baby boomers. There is a balance here to strike. Think about high-end hotels or restaurants that appeal to a wide age range. Consider not only how they look, but how they operate.
Reconsider your product menu
Do you offer the same office included amenities, pricing packages, virtual office packages, and meeting room options that have been offered for the last 20 years? Think outside the box and keep it simple and easy to understand. We are having great success with our revamped product menu. People simply have different office needs then they did 10-20 years ago. We offer a totally all-inclusive office package that includes things like printing and IT support and cloud storage (among other things). And we offer bare-bones packages for those who just need space and don’t want to pay for things they don’t need. We also offer fractional shared offices, part-time office packages, and team solutions priced by the desk. Our coworking memberships are not about open/collaborative spaces, but instead offer access to a variety of desks integrated throughout the center (mostly in rotating vacant private offices.)
Re-think your space(s)
If you are adding new locations, re-think your space design. In the old days, everyone needed a 200+ SF office. Until recently, 150 SF was the standard small one-person office. Nowadays, in most new coworking facilities, the average per person is around 40 SF. You need a lot of glass to do that, and our average size is much bigger than 40 SF; but you do need a much different variety of office sizes than you did in the past. You also need much larger and cooler common spaces, natural light, and thoughtful design. But again, be careful to stay true to who you are.
Decide what "coworking" means to you
Decide what you want to do with the word, "coworking." The line between executive suites and coworking facilities is blurring. Almost all new coworking locations dedicate most of their space to private offices, and most office suites offer some sort of coworking membership. Eventually the line between the two will disappear and there will be a spectrum of styles of coworking facilities. Embrace this reality. Our industry tried unsuccessfully to get names like “executive suites,” “serviced offices,” “business centers,” etc. to gain wide market awareness.
Coworking is the new umbrella term for shared workspace and this is a very good thing for us. As this terminology transition happens, there are challenges. In most markets right now, many customers still equate coworking with open-plan spaces. Try to educate your prospects and be clear about what you are and what you are not.