The Customer Perspective
Oakwood Worldwide’s Ric Villarreal shares temporary housing secrets for success
Oakwood celebrates its 50th anniversary this year. When Howard Ruby and two business partners started the company in 1960 with the slogan “Living Where the Fun Is,” they were responding to a need for custom-designed housing for young, single professionals in Los Angeles. In 1969, Ruby created the Oakwood Apartments brand, featuring furnished apartment communities that catered to a broader audience including business travelers, families and seniors.
Today, Oakwood provides temporary furnished and serviced apartments worldwide, with comfortable housing solutions for short- and long-term stays. Business travelers enjoy full-size apartments with furnishings, home electronics and other amenities. Global expansion in the 1970s to the 1990s solidified Oakwood as a recognized brand and market leader. Oakwood operates throughout North America, Asia and Europe. The firm has more than 2,500 employees and manages nearly 20,000 serviced apartments.
Ric Villarreal joined Oakwood in 1997 as director of process engineering, ushering in a new direction of business processes for Oakwood. From 2003 until his promotion to president in September 2009, Villarreal served as Oakwood’s senior vice president and chief information officer.
In his current role, he directs Oakwood’s day-to-day operations and helps execute and implement the vision and strategic direction of Oakwood founder and chairman Howard Ruby. MHN Editor-in-Chief Diana Mosher interviewed Villarreal about Oakwood’s best practices, the role of technology and more.
What’s the secret to Oakwood’s longevity?
Oakwood has always stressed innovation. We were the first temporary housing provider to launch a national Website. And we were the first to develop a technology where our clients can self-serve. Last year, we implemented a 24/7, 365-day-a-year service management system that allows guests to request an additional need or report an issue and understand the status of their service requests at any time along the cycle. Before the end of the year, we’ll be able to text the status to a cell phone, PDA or iPhone.
Improving on our customer’s experience when they have a need has become an important part of our strategy. The process has been improved and automated with great partnerships like Microsoft, Hewlett Packard, and Oracle. We’ve always looked to these types of partnerships as more than just providers of software or hardware—these relationships and their perspectives have helped further our reach and have fostered our innovation.
What are Oakwood’s best practices?
I would say the very best practice we have is listening to our customers. We need to truly understand their business goals in order to offer solutions that fit their needs or solve a business problem. We don’t have a one-size-fits-all offering. Our training and our ability to retain accounts and to message to them is based on what we think is a best-in-class marketing team that does very sophisticated targeting. When we develop technology, we do so from the customer perspective, asking, “How can we be the easiest provider to do business with?”
Tell us more about your target audiences.
Our vertical markets have varied needs and behavior. The insurance industry, for example, is a very different world from a government contractor with 900 guests in the language training school every quarter getting trained in 25 to 30 different languages. Entertainment is a totally different customer profile. We house many types of entertainment channels and work with entertainment brokers who manage logistics for big productions.
And then there’s relocation, which is really a big sweet spot for us in this industry. Relocation is dealing with the needs of one individual and his or her family—you’re talking about a high-level manager or executive moving to a new location. It’s one of the top-three most significant changes in our lives, and it’s very different from the consultant who wants to end up in the building near the best take-out food. The relocation client wants to have a great time in a great environment, and the relocation has to be close to schools; they’re asking for very different things. They’re with us while they’re looking for a permanent place to stay.
There’s also the international market. In Asia, the service apartment industry is extremely mature and has been part of the culture for many, many years. The idea of a temporary furnished apartment came out of the practice of long-term intra-Asia assignments. Investors and apartment owners have long served this business need, providing expats with furnished apartments for three, six, nine months or a year. During a long-term assignment, you’re more comfortable in an apartment with a full-sized kitchen. Likewise, when a consultant in the U.S. goes back home every Friday and comes back Sunday morning, they’re coming back to the same apartment with their clothes in the closet and their juice in the refrigerator.
The consumer market is very different; the need is more immediate. We’re telemarketing and doing telesales from our Worldwide Sales and Service Center in Phoenix. We developed a very sophisticated approach to segmenting our market and having a different message strategy for acquiring their business individually.
How do you obtain and manage inventory?
We listen to our customers and determine where they need to be. Then, we lease apartments from best-in-class partners. In some cases, we manage branded assets. In New York, for example, you’ll see several buildings with awnings that say Oakwood. We manage those and we balance the furnished and unfurnished conventional side of those carefully. We control the supply side by differentiating between a furnished service or corporate apartment and an unfurnished conventional apartment.
How has the temporary housing market changed in the past 50 years?
This is a time where we’re seeing the perfect storm for change. The competition has dramatically increased in the last few years, from large, publicly traded firms to small Mom-and-Pop operations. Our customers have many more options in front of them.
Secondly, the buying process has changed. A single decision maker is really rare now, especially in the more sophisticated businesses. We’re now dealing with procurement [departments] in more than 50 percent of our dealings, especially within large Fortune 1,000 companies. Sometimes you’re dealing with a relocation department. The bottom line is that procurement is there.
Third, the ability of our buyers to research and transact online has changed our marketing strategy, our service and our sales. We’ve needed to provide choices to buyers on how they procure. There is much more access to information on the Internet, and the tools that competitors and Oakwood use to become better providers are more readily available and are less expensive. We’ve had to evolve our customer service and process to meet that velocity of decision that’s happening.
For example, your boss says, “You need to find me three units for three employees who are going to stay in Chicago for a six-week engagement.” You go online to Oakwood, and that moment we seize the opportunity to engage with you, the customer, so that we can connect you with those units in real time. That’s what I see as the biggest change. The other piece of this reality comes out of the economic downturn. Our prospects have become savvier. They’re scrutinizing the process and leveraging the use of suppliers. Clients expect better pricing and best-in-class service with a supplier who understands their objectives. So training the workforce is crucial.
It has gone from a pure relationship sale to a partnership sale and a value sale where we understand what it is you’re trying to accomplish in your organization and where you’re going strategically. Members of the Oakwood executive team are able to sit down across a table with other decision makers and listen and share strategic vision and look for those kinds of synergies. It’s a different kind of sale.
We’ve had to implement unique solutions for companies to manage inbound expats and manage worldwide entertainment programs. Companies want to partner with innovation. They want to know ‘what can Oakwood do differently?’ Many times this results in a longer sales cycle, but it really is the key to long-term success: how can we help you meet your corporate objectives? It’s a question that wouldn’t be top-of-mind for most companies when they think about their corporate housing spend. But when you talk about employee retention, you need to ask ‘what is employee satisfaction during the first 90 days, and how do you make sure you have fully engaged the employee hired? How do you make sure their onboarding experience is excellent? And, is the wife or husband back in the corporate apartment having a positive experience?’
What is the perception of temporary housing within the multi-housing sector?
Oakwood is the tenant that will always pay the bill on time. We’re the tenant that will partner with you and not dump a lot of vacancies on you at the same time. The pendulum has swung from “Oh, my gosh … people are moving out every 60 to 90 days” to “Wow, there is a difference between a world-class company that will give back the units in ready-to-move-in condition. We lease entire buildings from owners, and it’s really all about what is my bang for the buck in giving one tenant all my business? You need a tenant with a good reputation and financial stability, who’s going to give you that rent check every month—and, by the way, your effort to fill those 200 units is going to be very small.