In an uncertain world, doing the right thing to look after customers has to be a number one priority.
But in the wake of some of the sharpest increases in the consumer price index (CPI) on record, boards and executive teams are now grappling with whether to raise rents by as much as 4.1%.
So how do we get the right balance between the competing needs of the business, customers and other worthwhile, but demanding agendas, such as net zero targets or our wider place-shaping role?
Whilst we might want to do everything and never increase our rents – this isn’t a realistic picture. We are faced with choices about where we stand.
And whether we implement 4%+ rent increases on the back of today’s CPI announcement is one of them.
Should our priority be to focus on helping existing customers to keep putting food on the table and pay for heating, or should we build more new homes that give people a roof over their head?
This is exactly what we’re having to ask at Futures – and we know we’re not alone.
As the sector weighs up this massive challenge, here are the five questions we’re asking. I hope they help you to make your own decision and protect your business and customers in a responsible, balanced and robust way too.
1. What’s right for your customers?
What’s happening in your customers’ worlds right now?
Data can reveal what additional support might be needed if rents are raised, or how holding rents could impact future service quality.
A clear picture of how many customers will be critically impacted, and how, can make the decision so much clearer.
For example, at Futures, enabling customers to maintain their tenancies is critically important to us. We have customer data that allows us to have an informed view of the impact of differing levels of rental increase and how many customers could be affected. We can then actively assist these customers utilising a suite of customer engagement tools. Our Customer Insight Committee and Board then use this data to make informed decisions.
2. What’s right for your business?
What is the business vision, its direction and growth plans? How do these align to the decision either way?
Understanding how this decision plays into the bigger impact you want the business to have is an important part of the conversation.
3. What values do you want to stand by, as an individual and as a leader?
Here at Futures, we believe in reaching our potential, so it will always be important for us to optimise the positive difference we can make to people and communities.
Understanding how we can do this, and what this means in practice, whilst protecting the well-being of customers is a challenging dilemma, but it will ultimately drive our decision.
4. What are the risks to your business either way?
Do you know what your business won’t be able to do if it doesn’t optimise its rental income? What are the opportunity costs across your thirty-year plan? And how do they compare with the data insight you have about the impact of rental rises on customers?
As with any risk appraisal, the board’s appetite is a key element of the decision-making process and due time should be built into decision-making processes to consider all the angles and options, in an informed way.
5. Are you clear on the numbers?
Be clear about the income lost, and what that means over the life of your business plan. But also be clear about the impact on customers, and what services can be put in place to support the hardest hit, should you decide to maximise future income to the business.
In summary, navigating these choices is never easy.
But by reviewing the decision through an informed lens, by collecting the data to give us insight and ask the right questions, I believe we can get a step closer to protecting our businesses, people and customers with the integrity they deserve.
