Sales Strategies 2.0
Shubhra Saini talks to the stakeholders of real- estate sector across the country to understand the post-RERA sales strategies being adopted.
The year 2017 saw more policy changes in a single year than in the two preceding decades. Though unprecedentedly rough for the real-estate sector, the year also brought some positive government initiatives to the sector. RERA and GST are the two main policy changes that have inadvertently impacted the sales & marketing of the real-estate projects.
Post implementation of RERA, customers are more watchful and waiting to see how the market will pan out this year. The new sales strategy among developers too is dictated by the rebooted policy environment. The focus is on faster completion of ongoing projects and curtailing new launches.
According to Anuj Puri, Chairman – Anarock Property Consultants, to boost project sales, RERA compliance is being advertised prominently and GST exemption is being used as a new marketing hook. He said, “RERA and GST have definitely force-fed transparency into the entire process of selling residential real-estate. While the implications of GST have yet to evolve into better clarity and awareness, RERA – where it has been fully deployed – has clearly separated reliable developers from unreliable ones. Buyers now have a real yardstick by which to measure the advisability of patronizing a particular developer, and non-ambiguous online reference material on all registered projects.”
There is still a massive supply-demand mismatch in terms of pricing and configurations. That said, with the government determined push for affordable housing, the supply pipeline in this segment is limbering up with even larger listed players now getting into the budget housing game. Anuj Puri
Indeed, developers have tweaked their sales strategy to remain compliant to new regulations. With the aim of reducing their current inventory, developers have adopted innovative marketing schemes and offers, before launching new projects. These include freebies, EMI free month and so on. For the new launches, flashing RERA number has become a key strategy. Anshuman Magazine, Chairman, India and South East Asia, CBRE, putting things in perspective, explained, “Developers are focused on ensuring their projects are RERA compliant. We are already witnessing a positive movement across the sector and we expect this to continue. Growth is expected to be staggered and pick up in the long-term once all stakeholders align themselves with the new reforms. As functioning smoothens and the teething issues iron out, the end users will benefit.”
While RERA has resulted in an improvement in consumer and investor confidence, GST has made India tax neutral and promoted the Ease of Doing Business across the country. Anshuman Magazine
Short-term investors definitely have nothing to get excited about, while their long-term counterparts surely have reason to hope again as the market’s growth will be on much firmer grounds going forward. In 2017, the residential property prices either stagnated or corrected. The affordable housing segment emerged as the new ‘poster boy’. Also noticeable was the buyer’s increased preference for ready-to-move-in properties. Puri explained the market dynamics, “Unsold inventory has declined and there are a lot of consolidations, exits and bankruptcy/insolvency instances. PE investments in the residential segment declined from 59% in 2016 to 35% in 2017 (until November).”
What Developers have to say?
There is a clear shift of preferences for ready-to-move-in options and projects in very advanced stages of completion. In states where RERA has been deployed, buyers now look for RERA registration and also seek to understand the exact state-level RERA laws before making a decision. Buyers are aware that they are in the driver’s seat and that it is definitely a buyer’s market. “RERA is a foundation and a template for a sustained and steady growth for the real estate growth. Today, customers are only interested in RERA registered projects. At Central Park, we are in a strong position to align ourselves with RERA and therefore our focus project, Flower Valley at Sohna Road is getting good traction,” said Amarjit Bakshi, Managing Director, Central Park.
Since the developers don’t have an option of selling the property before receiving all the necessary project approvals, there is no possibility left for raising capitals by pre-pre-sale. Aditya Kedia, Managing Director – Transcon Developers briefed on the sales strategy adopted by the company, “We are providing buyers with various flexi payment offers, keeping in mind that many potential buyers are on a lookout for upgrade and low down payment options. Tirumala Habitats in Transcon Skycity being in its final stage of completion, offering buyers with flexibility in terms of payment will nothing but allow them to plan their funds accordingly.”
Sanjay Bhutani, CMO – Rivali Park, CCI Projects commented, “Post the implementation of RERA, all the required approvals for the project have to be in place even before the sales strategy is planned. So, one has to be sure of what the project is, how it will shape up and promise only what one can deliver.
Pratik Mantri, Director, Mantri Developers, added, “Buyers nowadays do not get influenced by advertising easily and do their own set of research. They will not respond to random advertisement or marketing which is good in a way because now only serious buyers approach and we also know that how to customize are offerings according to our buyers.”
We have seen digital marketing generate good response and have been experimenting with various digital media to gauge traction which has led to increase our digital spends comparatively. Amarjit Bakshi
Talking about their sales technique Bakshi said, “We are present in owned, earned and paid media to engage with our target audience. The good thing about digital marketing is that it can be customized to address the particular audience one plans to engage or target, whether it is from a particular region or even a small locality. Another flexibility of digital marketing is that one can track consumers’ response and tweak their messaging or approach.”
Explaining their sales approach Vyoma Pandit added, “We use inbound marketing in form of advertising in traditional and digital media, so that we are present at the right place and time when anyone is looking for our products. In outbound strategy, we generally use emails and SMS to reach out to an opt-in database along with referrals from our existing customers.”
After RERA, developers have to have all necessary permissions in place before making the sales pitch for a property. Delay in grant of the required permissions delays the whole project. Secondly, if the local body hasn’t implemented the infrastructure that it had promised, the charm of the area is lost and is difficult to boost sales thereafter. Sanjay Bhutani
New Sales strategies
With changing times, the sales and marketing practices in real estate are also evolving to keep pace with consumers’ expectations. People are hard pressed for time and are not able to invest considerable time while deciding upon properties. For such audiences, digital marketing and social media comes to rescue.
Giving an example of new-age project selling Amarjit Bakshi briefed, “In order to provide prospective customers a first-hand experience of Central Park ‘Concept based Living’, we have an experiential marketing program called ‘Resorts Safari’ which includes an informative tour about Central Park projects. We put equal emphasis on both inbound & outbound sales, extensively investing in pre-sales communication and in-depth product training for our sales team. This ensures that the customer is not left with any questions on the table for the most important purchase decision of their life.”
Furthermore, in the year 2018, a large chunk of home buyers will be Millennial and they are not likely to respond to the same methods of sales directed towards their parents. They are not interested in fliers or door-to-door soliciting. In order to reach this growing population, developers are leveraging social media and deploying technology tools to reach out to them on platforms they are most comfortable with.
Arun Anand– Joint CMOs, Shriram Properties feel technology can be leveraged to reach more customers. “We use digital marketing to the extent of 70% of leads and a third of the business. We are one of the early adopters in the industry of any new digital offerings from the likes of Facebook & Google. Social media is largely a channel to engage with the home buyers and not just another sales medium. Content for social & digital will be one of our focus areas in 2018.”
We were successful in getting ~500 pre-registrations for our Chennai launch just on basis of a powerful & largely digital-led teaser campaign and an outbound plan that ensured that customers were met at their homes, offices, grocery stores and even the temple! Anand & Pandit
Talking about how they are using technology, Mantri, said, “We have deployed SalesForce to know about what customers are seeking. Depending on what customers are actually looking at we customize are advertisements in order to target our set of TG efficiently. Right now we are spending 50 % on OOH media because still in real estate it is the biggest pull in terms of drawing buyers attention and then 30-40% of our marketing budget goes on digital marketing and rest 10 % is our maintenance budget.”
About 4-5 years back the emphasis was on the location, but now surveying and understanding the buyer need is the pre-requisite of real-estate. Developers have customised their offerings in terms of location, design and amenities. Pratik Mantri
Role of Realty Brokers
The channel partners have always been a great support in terms of business as they are significantly contributing to the sales target of the developers. Alternatively, the developer’s marketing mechanisms and campaigns help the brokers in achieving the set targets in terms of inventories.
Briefing on the new equation between a project promoter and a broker, Parth Mehta, Managing Director – Paradigm Realty said, “Channel partners have become the advisor or consultant after the RERA registration. It is one of their key responsibilities to appraise the potential homebuyers with the right information pertaining to the product and brand.”
The challenges of the realtors are greatly reduced because there is more accountability and transparency and less of a bad mentality. So as a strategy one would be freer to offer a number of options and not speak to couple of non-names with a repetition of delivery. Putting thing in context, Ravi Varma, Chairman, NAR-India stated, “Property buyers are feeling little more secure and confident of buying in the Indian markets. The confidence level as far as investing in India for NRIs is also gradually increasing. They feel a little more confident of being in the market.”
Working closely with developers, the innovative approach that Anarock has adopted according to Puri is to create the most affordable deals for buyers, including by bulk-buying residential inventory and selling it at significantly lower rates. The company ensures that only verified and regulations-compliant projects are marketed to its customers, thereby negating a lot of the risk that buyers were subject to in the past.
Earlier, people used to book in a project for a short term gain or for short term investment. Today, only those with a long term strategy are investing in a project. Ravi Varma
Stating the benefits of RERA for the real-estate brokers, Farook Mahmood, Chairman & Managing Director, Silverline Group said, “RERA has brought in more people into the internet of registering themselves along with being RERA compliant. The quality of service, the presenting of facts as they are will be implemented. Some of the leading portals used to promise the intending buyers by luring them to give back 7-8 per cent and that led to a lot of confusion to the brokers on ground.
The real-estate agents will play a more responsible role in marketing the projects without exaggerating from the point of view of gaining more sales. Farook Mahmood
Most reputed builders are not accepting any booking until their project is RERA registered. They don’t even want to take a cheque. Last but not the least, builders are actually setting aside 70 per cent escrow amount or completing the project for which they are taking bookings. The real-estate fraternity faced numerous hurdles created by the RERA and GST, but now the situation seems under control as shown by the gradually swelling sales rate and investments. We at Realty Plus hope 2018 to be more productive and progressive year with affordable budget and GST rates.