The Experience Strategy Podcast: Experience First: Hotelifying Apartment Living

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How do you take a simple moment and turn it into something that is memorable every single day? Many of us have had wonderful experiences at hotels, but residential living has been slow to embrace the lessons of hospitality. In today’s episode of The Experience Strategy Podcast, we’re talking to Trevor Hightower, the founder of Craftwork, about creating meaningful moments for apartment residents and powerful ways to disrupt the residential real estate industry. 

Introduction: [00:00:00] This is the Experience Strategy Podcast where we look at the best and the worst customer experiences and ask what were they thinking? And now, here are your hosts experience nerds, Dave Norton and Aransas Savas.

Aransas Savas: Welcome to the Experience Strategy Podcast. I'm Aransas Savas.

Dave Norton: And I'm Dave Norton.

Aransas Savas: Many of us have had wonderful experiences at hotels. Moments that we'll remember for a lifetime. Moments where we felt seen and cared for. Moments that make us want to come back.

So what's holding back the apartment industry from creating similar moments so that their residents are excited to come and compelled to stay? A recent addition to the residential real estate sector Craftwork has made it their mission to put meaningful customer experiences at the heart of their business model.

Today, we are so [00:01:00] delighted to welcome Craftworks President Trevor Hightower to the show. Trevor's experience in positions of leadership in the military and in the commercial real estate industry have all really helped shape his philosophy and passion for community, entrepreneurship, place and seeing others around him flourish.

He's the founder of Work Flourish, a co-working space in Houston, Texas, which merged with Craftwork in early 2018. Prior to this, he was Managing Director of Houston for leading commercial real estate firm, CRRE. And today we invite you to listen in as Trevor Shares Craftworks unique and powerful method for adding value to the residential experience and as we work with him to explore ways that Craftwork can continue [00:02:00] scaling up and bringing even more value as they grow.

Dave, what are you excited for in this episode?

Dave Norton: I haven't thought about apartments and experiences in a long time. So it's really interesting to explore that space. And traditionally residential people, builders, commercial builders, they have focused on the physical space itself. Is this place going to have a two bedroom or a one bedroom?

And what are we going to do with our entryways and our hallways? And what I like about what Craftwork is doing is that they're helping the industry to think about moments. What a classic traditional kind of move to make, but one that an entire industry is not focused on. How do you take a moment in an apartment experience that happens every single day and turn it into something that is memorable? So I would be paying attention to the way that Trevor has built [00:03:00] his solution around a couple of key moments.

Aransas Savas: Trevor, welcome. Thank you so much for being here today.

Trevor Hightower: Aransas and Dave, thank you so much for having me. I've been listening to the experience strategy in preparation for this conversation and let me just say it's great to talk to fellow experience nerds.

Aransas Savas: Woohoo. It's our nerd verse coming together. All right, let's dive into it. Trevor, start off by telling us a little about what Craftwork your company is.

Trevor Hightower: Great, Aransas. Thank you. Craftwork answers the question that I've always had and at its core everyone I've met has had a great experience at a hotel, and no one could say the same thing when I talk to them about their experience of living in an apartment. And so we try to fix that. We put our hospitality bar in a lobby of an [00:04:00] apartment. We are replacing traditional apartment expenses like leasing labor, concierge labor, and providing an elevated experience that focuses on hospitality.

That includes food and beverage services in the morning, in the afternoon and the evening, with coffee, healthy grab and go food and alcohol in the evening, pool side service. So we're really in that spectrum of the hotel vacation of apartment buildings, but really at our foundation and our core, we're there to delight the end user resident.

So we do things like surprise and delight residents on their birthday with drinks and a handwritten note. And our bar hosts their number one job, as we say, their first principle is to get to know the residents, know their names, know their stories, and create delightful experiences when they interact with them.

Aransas Savas: I love that so much. As you're talking too, it makes so much sense to really [00:05:00] invest in those spaces because a hotel is in essence a date, whereas your home is a marriage. And we spend so much time in our homes and it has such an impact on our overall sense of any given day. I just think it's so beautiful what you're doing to invest in that.

What inspired your unique approach to residential real estate? Cause I really haven't heard anything like this, and I don't think I have any, at least in this specific part. Yeah. There's a lot of gyms and there's a lot of amenities, but there isn't I don't think, hospitality.

Trevor Hightower: Yes. My background, I was in commercial real estate. Once I got out of the Air Force and saw many different components of commercial real estate as a developer, a financial analyst working for a large service company like CBRE.

And what I primarily saw [00:06:00] is the real estate industry seeing and viewing their real estate like a product. And really the traditional thinking and how to differentiate one asset class or one property versus another is to differentiate the product. So, how do I create more amenities, as you say, or the amenities arms race is really in the multi-family as an outworking of this. How do I create bigger, sexier, a golf simulator in the apartment in a way that attracts the end user resident.

What I am encouraged to see is there are more operators and owners in real estate that are focused on the end user experience and understanding that it really is the experience of the end user that at the end of the day, will increasingly create the most value for the asset. And we see this in office and we see it in multi-family.

Personally, I love what you said, Aransas. One of my favorite [00:07:00] quotes is from Winston Churchill and he said, of all people we shape our buildings and then our buildings shape us. So from a kind of a core foundational why, coming from the real estate industry, I had to be part of a solution that really created better building places for people to live and to work, where ultimately it shapes them in a way that makes their lives better.

Dave Norton: See, now I wasn't aware that you had both the residential as well as the commercial real estate aspect in mind. I imagine those are two very different audiences. How do you make believers out of those two very different types of clients?

Trevor Hightower: Yeah, that's a great question, Dave, because we are a B to C company. Our B2B client is an apartment owner and we provide a service for them, and they pay us a fee. And obviously our B2C client is a resident. The great news is the better [00:08:00] job that we do delighting our B2C client, the easier it is for a B2B client to validate our fee.

Now for us, we also know the commercial real estate industry is a conservative industry, and so that's why our model is to come in and replace traditional expenses that might be more commoditized and replace those expenses with our expense so that the owner has a justification, has a NOI positive NOI impact to their asset.

Aransas Savas: Can you tell us what that means, NOI.

Trevor Hightower: Yeah, sorry, that's my nerd-dum coming out on the real estate side, but that is net operating income. Essentially we are able to replace traditional expenses for an owner, and those expenses might be labor expense for a leasing professional, coffee expense, unserviced coffee and a coffee machine. Some of the traditional marketing expenses like the events that might not be an experience, [00:09:00] but more just the happy hour that's for the entire building. And we say, allocate those expenses towards Craftwork and we're gonna create a really personalized experience for your residents.

And so now the owner has a justification for our expense that creates a positive net operating income, which is, that's the NOI to an asset and that positive net operating income to the asset occurs before, what we see is the benefit of providing the experience for the resident, which is they tend to renew more and they tend that the building tends to have higher occupancy because it's differentiated from its competitive set.

Aransas Savas: What are these people who are purchasing your service, what do they say when you present this idea to them? Is it obvious to them that this is the experience that's needed or is it just totally out of their scope of reference?

Trevor Hightower: It's a very good question Aransas. I would [00:10:00] say that more and more owners I think are seeing the importance of experience for their end user. And this is really cool because there's a lot of leaders coming from outside of the commercial real estate industry into the industry bringing this expertise. So for example, one of our clients is Cortland. They're one of the largest owner operators of apartments in the country. And they hired a gentleman by the name of Mike Gomes and he worked for Disneyland Theme Parks.

And really provided the end user experience strategy for Disney and was hired by Cortland to come in and focus on customer experience for the residents. And so that's one example of many where it's really exciting the thought leadership that's coming into the industry. That said, the majority of the owners might still be thinking about their assets as a product, as [00:11:00] opposed to an experience.

And so that is the neat opportunity to come in and describe the importance and value and benefit of having someone focus on their resident experience like Craftwork and why that leads to positive benefits for their asset. The short answer to your question is we see more and more I'd say, both strategic leaders coming into the industry who are focusing on this and there's still a huge opportunity with a majority of the industry to realize the importance of experience for their residents.

Dave Norton: It takes people from outside the industry coming into the industry to shake it up, doesn't it? I think about real estate, I think about rental properties. I think about maximizing your net operating income by trying to get as many people into one place as possible. Spending as little on overhead as you possibly can. And I also think about the kinda the [00:12:00] world we're in right now where people are very, how should we say it, in need of a place to live and there's a friction that exists between owners and leases. It's a challenging environment. How do you address all of that?

Trevor Hightower: Dave it's very insightful and it's very true. It is a challenging environment. I think that the great news is we truly believe that it's not mutually exclusive. Both the focus on care and focus on the enhanced living experience of the residents is absolutely in line with the owners asset level goals of increased occupancy and retention. And so how we address it is as I mentioned, because of a lot of innovations and technology and operations. A lot that has been accelerated in the past 16 months during the pandemic, there are a lot [00:13:00] of opportunities for owners to create more efficiencies and operations.

 And so then the neat discussion is, as opposed to those efficiencies creating all of it going down to the bottom line. What if you reinvested some of the savings into services that enhance the quality of life for your residents, and in so doing increasing the retention in your buildings, increasing the occupancy in your buildings.

And if that occurs, then you know the enhanced experience for the owner's, residents, and the owner's responsibility for their stakeholders to have an asset that's performing well, are actually right in line. And that's what I love Craftwork for many reasons. But I love that our missional focus and the benefit to our clients are directly aligned.

Aransas Savas: As I listen to you, to me it falls into the category of keep doing what you're doing, but do it better. And we just did an episode on the [00:14:00] power of experience strategy as a disruptive innovation strategy. To me, this is such a brilliant example of that. One of the things it seems like just looking at your website and talking to you before that has been really at the front of this is a customer focused mission. Can you talk a little about that?

Trevor Hightower: Yes. The resident for us is our hero. Spend all day thinking about the resident. And, all of us have been residents. I think most of us have lived in some sort of rental property. Most of us have family members who are living in a rental property.

So it's really easy for us to have the resident as the hero of our story. And so our mission at Craftwork is to create places residents feel generously seen. And I think that we have missional moments that we share in our internal channels of when that occurs. And we celebrate those like they are the most important things in the world because they are.

[00:15:00] And so these are when a resident cries because they get a birthday note or they're cheered on because they are about to go into a job interview. And the bar, our bar host remembers this. It is again, what's great about being a mission driven company is when it's more than just the placard on the wall, and it's something that really is the fuel and the DNA of the organization.

When you achieve mission success of residents being delighted, it is directly in line with your business objectives and business success. Because the more that residents are delighted, the more that we're actually providing value for both our business to business client and obviously our business to consumer client, our resident.

Dave Norton: Those are wonderful stories. Do you have more examples of some of the experiences that some of the residents have had, or a wonderful story that you could share with us?

Trevor Hightower: These are my favorite stories and so I love sharing these. I do think it's [00:16:00] important Dave and Aransas, the hero of our story is the resident. The star of our show is our bar host, our frontline teammate, and reading as much as I could about experience strategy, I love the focus for companies who are engaged in creating experience strategy on their team, their frontline team.

And so I'd be remiss if I didn't say that the hiring, the training and the equipping of our bar host team is the most important focus of our company. That is able to create these stories. So some of my favorite stories are with our bar host who one, there's a certain wiring that we're looking for. Obviously there's a focus on and a love of the mission of creating places where people feel generously seen, but then there's this empowering of their unique gifts that allow them to show up on site and [00:17:00] really in their own way create delightful moments for residents.

And so some of my favorite stories are bar hosts coming to us and just saying that I felt generously seen because my gifts are being uniquely utilized on the buildings that we're working in. Which I think that creates the more authentic moments that I mention where because they are empowered in their unique gifts, we hear from residents that, wow, I had a really hard time losing one of my family members and I felt comfortable enough to share this over a relationship with the bar host. And they gave me flowers in my unit. And that's nothing that we instructed from Corporate team that was just our bar host team being empowered to really care for the residents that they're engaged with on a day to day basis.

Dave Norton: That's so cool. How do you keep it fresh? Because unlike a hotel, you [00:18:00] can't do the same things every single day. Or maybe you can, maybe that's part of your approach. What do you do to make sure that it's fresh for people?

Trevor Hightower: That's a great question. I think that authenticity is really important for residents, important for our bar host. And what I mean by that is the interaction to be fresh has to be sincere. There can't be a fake smile or a fake interaction. It's this bar host genuinely cares about the person that they're serving and their story and their name. And I think when you have authenticity, which means you know that there's this authentic desire for the bar host to connect. Then it is fresh because every conversation is new and every interaction is new. And what is consistent is the sincerity of the interaction. And how you keep that consistent, that is really important. And for us, [00:19:00] that is such a huge part of our ongoing training.

We have a thing that we stole directly from the Ritz Carlton training manual, but the Ritz, I think does a 21 day credo. We do a 30 day credo, which is every day we are focused on another component of our mission or core values or first principles. So for instance, today is I will embody Craftwork hospitality by looking directly in the eye of those I'm talking to. And so it's very simple things like that. But there are practices that remind us of how we're going to engage authentically with our hero, our resident.

Aransas Savas: I love the specificity in that, and I keep being struck as you talk by the fact the entirety of the hospitality industry was built on making people feel at home, and yet no one ever tried to make people at home feel at home. . .

Dave Norton: That's [00:20:00] great. I love that.

Trevor Hightower: I do too, Aransas. It's not the multi-family, which is the apartment industry's fault. They were trying to solve, I say the industry was trying to solve a need of of housing and trying to create the supply. And there wasn't a lot of focus on the experience for the resident. Just say we need to provide the right product and maybe some of the right services that will be adequate for people's living. I'm excited about the opportunity because there's a huge opportunity to create a better home of where people live every day as you said, Aransas. So it's a great opportunity and we're excited to be part of it.

Aransas Savas: So what's next for Craftwork?

Trevor Hightower: We're still a young company. We're focused in Texas, we're growing a number of locations in the Texas markets. Our service primarily from the B2B standpoint works in high rise assets and mid-rise assets, which are the properties that have the budget [00:21:00] line item where Craftwork services work. So we're really focused on growing in both those type of assets and then in the Texas markets. In the next year we have 12 locations that are gonna be launched over the next six to nine months. And then we're really excited to grow into other markets like Denver and Phoenix, Atlanta and then ideally to the coast in the latter part of 2022.

I think for us, my partner Riley and I have always said, if we get to a hundred locations or a thousand locations, but we lose our why or we lose our mission, then that would not be success. So we're really trying to focus on how do we scale in a way that we maintain and keep our culture and a people focus business. That's easier said than done. And so we're trying to be really wise and learn and listen to mentors and how to make sure [00:22:00] that we do that well.

Aransas Savas: That's so smart to keep the mission at the center. More specifically, what challenges do you foresee as you scale up and try to sustain the connection to your core values.

Trevor Hightower: That's a great question, Aransas. We're one part of the overall operations of the building and there's a property manager that we work really closely with. And property management is either done inhouse, which you know, in the industry would be called, vertically integrated owner operators.

Those are owner operators like Cortland or Camden. Who are large reach in the industry and it is a little bit easier to integrate into the operations with the owner operators. It's a little bit more challenging when we are partnered with a third party property manager because we are integrated into services and trying to push resident experience forward. So I think that [00:23:00] the challenge and the opportunity for us is how do we do that? How do we partner really well with the third party property managers? Ideally creating strategic partnerships with them where we can create differentiation for the third party property manager as we work really well with them to drive resident experience.

But I think that's not gonna be easy because there's a lot of really successful kind of third party managers that have entrenched positions in the industry. And so finding the way to work well with them is gonna be both our challenge and our opportunity.

Aransas Savas: And you know how much we love to look for problems and then find creative ways to use experience to solve them. The first thing that's coming to mind for me, and I'll be super curious to hear what Dave is thinking. As you're talking, it feels to me like a big service design opportunity. So I don't know how much you know about service design as a discipline, but the idea is really to take an end to end view of the customer's [00:24:00] journey and look at it through the operational lens. From the moment of first consideration for a customer all the way through to the end and create detailed maps and experience documentation to assure consistent translation and integrity of the experience throughout. So that to me is the first thing that came to mind as a potential opportunity consideration for you guys as you look at this. How about you, Dave?

Dave Norton: I think if you did that you would find additional opportunity areas to grow regardless of what kind of property you're working with. Currently, you've got this wonderful bar type of experience in the lobby. That's a starting point. Yeah.

Years ago, It's funny because, it's really odd because we've been doing this for so long. I remember many years ago, a guy by the name of Jim Gilmore, who co-wrote The Experience Economy with Joe Pine, I [00:25:00] was invited to speak at a conference of hotel people about the experience economy, and he invited me to come with. And we spoke together and we called the presentation start with the cart. Okay, and the entire hotel industry was basically saying, what is this experience stuff. We don't have to pay attention to experiences. People just want a really clean room and a nice bed, and this is actually even before some of the things that W did to change the bed experience for people. And so Jim and I got up there and we talked about, start with the cleaning cart. Create an experience around the cleaning cart and let it build from there. And Jim, called it start with the cart.

And I've always thought about that particular moment. Because to a lot of hotel companies at the time, it didn't really make sense. They didn't even understand that someday Hard Rock would have their own hotel or [00:26:00] or that W would come along. And maybe that's what we're seeing in the residential rental category now as well. I would hope that's the case, right?

There's so much square footage that is going up these days. Yes. And it all looks so cookie cutter to me. It looks so the same and there's only so many swimming pools that you can put in, tennis courts that you can put in. We've gotta start thinking differently about this. And of course, on top of everything that's going on, you've got the way that people work is becoming so different as well.

So I, I think you're at the beginning stages of a revolution and it's not gonna be easy and it's not going to be fast. I think it's going to take time because there's a lot of mindsets that have to change. To me listening to you talk about being there at the moment, being mission driven, meeting [00:27:00] the guest, knowing the guest, it just took me back to a time and place when we were talking to hotels about exactly those things. And I think you're onto something here. But as the industry begins to catch on to what it is that you're doing, you're probably not gonna be able to cause this transformation on your own. You're gonna need allies and others to help you.

But as the industry begins to catch on don't be afraid to very quickly move into other channels for your customers. So think about the digital experience, think about the hybrid experience. Think about what you can be doing to support your customer's, customers across the board and I think you've got a real recipe for growth.

Trevor Hightower: Dave and Aransas, this is a very inspiring conversation. I love this, the work that you did with Jim Gilmore in [00:28:00] hotels. And it's a great story because in real estate the only asset class that's really I'd say recognizing that we are entering or we're in the experience economy is the hotel asset class.

And that's very commonplace for hotels to understand. That is the access in which they're competing with their other hotels. It is just so obvious and all of the trends that on the demand side that had led to hotels needing to focus on experience are occurring right now in apartments and in office.

And so it's really exciting as I hear you talk, to think about our place in how we can really help the industry focus on experience. What is so exciting and great to the mission that you guys are both focused on is ultimately the experience economy is what is best for the [00:29:00] end user.

And Aransas, as you said, is so important that we figure this out because it means that the people who are living in these places, their lives are better, and especially coming out of the pandemic. But even before we were in a pandemic of loneliness. And where according to Cigna, three out of five adults reported feeling extremely lonely, which had the detriment of health impact that is akin the smoking 12 cigarettes a day.

And so experience economy is really important for residential use because people are really isolated and really lonely and they need owners and operators of buildings to think about how their living experience can be improved. And we think that's improved in part by having someone who is there, who their mission and their job is to generously see them through the services that we're providing.

Aransas Savas: Trevor, that is so [00:30:00] incredibly inspiring and from the first moment I read about what you were doing and then getting to talk to you, I just feel a really deep sense of gratitude that you're doing what you're doing. And I really do believe that the ripple effect of this work on individual renters, people who are residing in these buildings onto their communities, has just a massive and important impact on the overall connectivity of human beings in an increasingly digital and disconnected society.

If I think about the takeaways for our listeners, knowing only a handful of them are gonna be in the exact category you are in. I wanna think about what the sort of universal takeaways are for people who are responsible for experience, whether it's running their local laundromat or running a big bank.

And I think from you the first one I take is just really to have a mission [00:31:00] that leads every business decision and to keep that customer at the center of the mission. I also hear in so many important ways how you're keeping human beings in general at the center. Whether it's the owner operators and their needs, the bar host and their sense of purpose and mission, and of course, the customer themselves making them the hero of this story. What would you say people of all industries could and should learn from Craftworks?

Trevor Hightower: Aransas one, that was a great summary and I'm encouraged by that. I'm glad that's what you gathered from our conversation. I would say if you're in an industry where maybe similar to residential, the industry as a whole is maybe a late adopter to the experience economy or understanding the economic progression of [00:32:00] commodities to products, to services, to experiences. To find a niche or a part of the business that you can drive that forward.

Because Dave, as you described the industry is massive and the opportunity is huge. And we're certainly taking the cart approach. We're finding our niche to drive experience forward with our mind and our heart and our eyes on the bigger picture that we do think that there's a huge opportunity comprehensive experience of the resident. But also knowing if you're a startup company or you are part of a large company you can get your foothold in one part of an industry and kind of take that it starts with the cart approach that you reference with hotel.

So for us, it started with the front door experience for apartments. The place in the bar, in a lobby that a lot of times goes underutilized and not activated, and doesn't really focus on the experience and how do we really reimagine that whole experience for a prospective resident walking in.

[00:33:00] And then for a resident who lives there. It is a very small piece of the entire puzzle but I think it's a great way for us to do our part to drive the industry forward. And then it opens up a lot of opportunities down the road. So my takeaway would be just find your niche and drive experience forward in that niche.

Aransas Savas: Love that. How about to you, Dave?

Dave Norton: I love where this conversation has ended up. It's not exactly where I thought it was gonna go and yet I love what you're describing and I think there's a lot of companies that really need to start thinking about one specific moment and going after it. Which to me feels nostalgic and a little bit old school, but maybe that's exactly what we need.

Aransas Savas: Well said. Here's to human connection. Here's to creating experiences that don't just encourage people to spend more time in places but actually add value to the time they've spent [00:34:00] in places and with products. Thank you for all you're doing, Trevor. Thank you for being a true experience innovator, and thank you so much for joining us on the show today.

Listeners, hope you all got tons of inspiration for your business, whatever it may be, by listening today.

Trevor Hightower: Aransas and Dave, thank you so much.

Closing: Thank you for listening to the Experience Strategy Podcast. If you're having fun nerding out with us please subscribe, and share wherever you listen to your favorite podcasts.

Find more episodes and continue the conversation with us @experiencestrategypodcast.com.