Cost Savings…Then What?

Service providers can be an interesting bunch to hang around. They’re likable and friendly, but they’re often full of contradictions. So is their marketing information. One US-based real estate services company website I visited touts the firm’s ability to save its clients between 10-15% in real estate costs. Further down on the same page, the firm’s message is that they focus on fulfilling long-term versus short-term needs. Sooner or later, however, the ability to create cost savings dwindles so isn’t cost savings alone simply a short-term solution?

If you approach real estate clients with a message focused solely on cost savings you’ll soon hear a chorus of “What have you done for me lately?” We’ve all been there and it’s what keeps so many real estate services firms companies in business. Sooner or later, the client is going to send out an RFP and want to switch their service provider.

I envision cost savings like pulling back the power band on a slingshot or enabling you to step on a car’s accelerator. It’s the result of the action that matters. Service providers have to do a better job of communicating the business benefit of cost savings. Wait a minute, you say, cost savings is its own benefit. Well, yes, I’ll agree but only insofar as you’re focused on short term needs. But as I mentioned last month, corporate real estate clients today need real estate solutions that do more for them than just lower costs. I mentioned that real estate outsourcing (properly delivered), is moving into the company’s driver’s seat–for a long-term ride. This month, I’ll try to illustrate exactly what “properly delivered” means with respect to cost savings. In other words, what should cost savings do for the client? Here are two important illustrations.