Reasonable Property: Benchmarks, Market Intelligence and Impulse Purchases

Rory Sutherland often cites the restaurateur Will Guidara when he talks about reverse benchmarking. Guidara’s restaurant consistently rose through the ranks of the world's best because when he and his staff visited competitors, as impressed as they were, they did not emulate what these restaurants were doing supremely well. Instead, they capitalised on where these heavyweights were somewhat lacking: enter the beer sommelier.

In property, we also benchmark. We size up the competition and go on building tours.

They have a roof terrace. Let's have that.

They used Scandinavian timber. Let's use that.

They spent a fortune on cyclist showers. Let's do that.

To call this benchmarking requires a suspension of disbelief. It is impulse buying whilst standing in a supermarket check-out queue, or clicking the 'why not add to your basket' feature when shopping online.

We observe what is succeeding and mistake it for a shortcut to success. And yet when we fail to replicate success, we are surprised.

Roof terraces, yoga studios, tenant lounges and coffee bars were the future once. They commanded rent premiums because they offered the market something new. They were differentiators. Now they have become expectations. They hardly push the boat out.

In fact, amenities increasingly feel like Hollywood sequels and reboots, signalling to the market that we have run out of ideas. Not because they are inherently wrong. Far from it.

The problem is that we have mistaken the visible manifestation of innovation for the innovation itself: The roof terrace is not the innovation. Understanding something about the market before everyone else is.

We gather data and mistake it for market intelligence. We replicate the feature rather than understand the behaviour behind it.

We take it at face value. We don't interpret it. We don't interrogate it. We don't seek the causes behind it.

Two people can look at the same data and reach entirely different conclusions. Data is the easy part. Interpretation is where intelligence is created.

Knowledge may be power, but knowledge is what we do with data, not how we harvest it.

What if we, like Will Guidara, reverse benchmarked?

Instead of asking what the best buildings have, we should ask what they are failing to offer the market.

That is where differentiation is created.

Reverse benchmarking is not the search for better amenities. It is the search for the unmet need and desire that created them in the first place.

We can invent the future, or become a stale Hollywood remake of what the future once looked like.