Why Members Stay: The Flex Retention Playbook

Member retention is the foundation of a successful flex model, but engaging members over the long term requires more than acquisition strategies.

Our recent breakfast event, co-hosted with NORNORM at Uncommon Holborn, explored this topic in depth. Edward Crabtree (BD Director at technologywithin) moderated a panel discussion, where the following industry experts shared their insights on what keeps members coming back:

• Amy Pighini, Operations Manager – Argyll
• Catherine Le Druillenec, Managing Director – Knotel
• Ed Hobbs, Workspace Director – x+why
• Richard Webb, Head of Sales – Huckletree
• Rebekah Lloyd-Beere, Head of Flex Workspace – MediaCityUK
• Charles Fraser, Head of Flex – JLL

Here are the key takeaways from their conversation.

Why do members leave?

Churn used to be advantageous in flex. While Charles Fraser was working at Workspace Group over a decade ago, member turnover helped operators capitalise on rent increases, with offices quickly filling up. But times have changed, and Charles admits that the London flex market is much more challenging today.

Flex operators cannot afford to lose members, as doing so leaves them exposed to covering void periods, service charges, business rates and liabilities. This makes “retention absolutely key,” says Charles, who recommends that operators work towards reaching 90% occupancy in their spaces.

Understanding why members leave can help improve retention. From changing locations to budget issues and experiencing friction in the space, “there are so many reasons why someone might leave,” notes Ed Hobbs, urging operators to look for early warnings. Late payments may signal a business in financial distress, while operational challenges, such as the Wi-Fi connection dropping or when access control doesn’t work, may grate on members over time. For any fixable issues, Ed advises operators to “jump on it straight away.”

The standards in flex are now extremely high, as “most serviced office providers have such incredible buildings,” explains Charles. But it also gives members plenty of choice, and they can easily walk away from a space that doesn’t meet their expectations. The flexibility of coworking also means that some members view it as a short-term solution that meets their needs at a particular time.

When Rebekah Lloyd-Beere was told a member in her building would be leaving a 2,000-square-foot space, she quickly found a way to convince them to stay, and they downgraded to coworking instead. Over a period of six months, Rebekah checked in with the tenant weekly until they were ready to upgrade – they’ve just taken on 800-square-feet.

For Rebekah, retention isn’t necessarily about being in “the same office, but it’s retention in that they haven’t gone elsewhere for that period.” Flex retention starts with staying close to members; the earlier you know what’s changing, the better you can respond.

Teams at the heart of retention

We tend to hear about member experience when tenants are happy, but they don’t always vocalise when they’re unhappy. This makes a termination notice sometimes come as a surprise. To understand members’ needs, the panellists recommend maintaining constant communication with members.

Community managers often have their ear to the ground, being on-site every day. At Media City, monthly catch-ups are organised with members, but in between, community managers “hear little wisps of conversations” which helps them gather an understanding of member experience, explains Rebekah Lloyd-Beere. Rebekah joined the company as a host and worked her way up – a career trajectory that speaks to the company’s retention-led culture, and one that stands in sharp contrast to traditional asset managers (who tend to check in with tenants every five years or so).

Similarly, Huckletree trains and upskills on-site teams, encouraging them to have natural conversations with members about renewals. More formal catch-ups are also scheduled, “where we can discuss members’ behaviours, experience, how they use the building, and further support them,” says Richard Webb, who emphasises the importance of starting renewal conversations early. At Huckletree, “renewal starts the day members move in.”

Ed Hobbs agrees, urging operators to pick up on member experience before someone announces they’ll leave. While x+why once began renewal conversations four to five months in advance, they’ve since changed tack and now have those conversations six to twelve months out. Like several workspaces, x+why’s “community teams very much act as the conduit for information” around member experience.

But it’s not just the panellists who value the influence that team members have on retention. An audience poll during the discussion revealed that on-site teams (and price) had the biggest impact on whether a member stays in a space.

How data comes into the equation

The coworking industry centres on people, but pre-empting whether a member will stay or leave can often come down to gut feeling. In Richard Webb’s words, “the most important data we can rely on is just the communication we have with our members.” However, he also acknowledges the importance of data collection and recommends operators use both.

Huckletree, along with x+why and Foundry, use Net Promoter Score (NPS) to look at “how everyone is enjoying the space and the building.” The honesty with which members respond helps teams enhance the space to meet expectations, such as introducing more phone booths or resolving issues, such as mending a coffee machine in one of the enterprise suites.

Catherine Le Druillenec sees immense value in using technology tools to track space usage, although she acknowledges the challenges of implementing consistent data collection processes. Knotel aimed to “change people’s behaviours and find a reason for them to physically check in at the desk,” introducing a concierge-style service that welcomes members on arrival.

Gathering meeting room utilisation and booking data helps Catherine identify any downtime, and take action on sales activity or check-ins with businesses that typically use those amenities. As well as collecting data, Catherine reminds operators to anayse it and present the findings to the wider business. At Knotel, this “has been a game changer in how we make meaningful decisions.”

When retention outweighs replacing members

Whether a member leaving comes as a shock or not, it’s not always because they’re unhappy with the space. A common reason for members to move is “because they’re either expanding or contracting,” explains Charles Fraser. In these circumstances, flex operators must decide whether retaining a member outweighs acquiring a new one.

Flagging new customers with huge growth plans, or whose businesses have merger and acquisition (M&A) activity, can help keep an eye on movements. At Knotel, it’s about “retention of the customer relationship, not necessarily retention of that customer in the space,” says Catherine Le Druillenec. Knotel will move customers across the portfolio within their lease term to improve long-term loyalty and even form partnerships with businesses to deliver and run larger spaces for them outside the portfolio.

That said, this approach won’t be right for every operator. When Argyll members come in with huge growth plans, Amy Pighini questions: “Does that still fit what we do within that particular building, and how is that space going to impact other clients if that business is expanding too much?” Profitability plays into this too, as accommodating a member with huge growth potential could impact rates.

How to encourage members to stay

As a final question, the panellists were asked to share one recommendation to encourage member retention in flex. They answered:

● “Consider increasing the break clause in contracts” and “you can never have too many meeting rooms or phone booths,” – Charles Fraser.
● “Separate the role of receptionist and host to provide the best possible service” – Rebekah Lloyd-Beere.
● “Make sure your CRM works,” – Ed Hobbs.
● “Prioritise proactive relationship management, making sure that every single person in the business realises that relationship management and retention are critical to business success,” – Catherine Le Druillenec.
● “Introduce incentives and referrals for team members” – Richard Webb.
● “Have processes to capture conversations” – Amy Pighini.

Member retention is clearly the key to success in flex. You can watch the full panel discussion here as well as the fireside chat between Gary James, CMO at FOUNDRY and Sam Stinton, Business Development Manager at NORNORM which takes a deep-dive into FOUNDRY’s retention strategy.