The Post RERA Marketing
Real-estate marketing has undergone a paradigm shift. The recent policy changes, advancement in technology and market consolidation, to name a few have become some of the deciding factors in developers marketing strategy. Ankit Gohel takes a look.
As we all know, demonetisation left the developers as well as the property buyers with a cash crunch. With new launches stalled, the quantum of advertising reduced. Then came the Real Estate (Regulation & Development) Act (RERA) which introduced guidelines for project promotion and marketing. Developers had to redraw their marketing initiatives to be in sync with the RERA compliances. Now, the implementation of Goods and Services Tax (GST) has brought the third disruption in the real-estate branding & marketing strategies.
David Appasamy, Head – Brand and Strategy, Social Beat opines, “Given the impact and aftermath of demonetisation, the real-estate industry suspended marketing for a period of time, and resumed promotional efforts only in March-April 2017. These were aimed at liquidating inventory in projects that had already been announced and were under construction so that they could keep revenues flowing. No new projects were announced, and projects that were being considered were kept in abeyance until a climate of confidence and consumer sentiment recovered.”
Expressing the developer’s point of view, Rohit Gera, Managing Director, Gera Developments Pvt. Ltd., said, “With RERA, any marketing is now possible only after the approvals have been obtained and the project has been registered with the authority. Hence getting the product mix absolutely right is extremely critical especially since making changes in the project once the sales have started is very difficult. This increases the overall risk and therefore the pressure on success of the launch of the project and marketing of the project is now exceptionally high.”
Prior to the RERA, the marketing of real estate projects were more focused on generating leads. Once RERA came into force, the marketing strategies shifted to gaining customer confidence.
The New Stratagems
Regardless of the scale or type of project, the property marketing includes market research, consumer insights, branding, lead generation, post sales marketing initiatives among others. The liquidity crisis forced the developers to realign their marketing and adopt new means of branding & promotion. Fancy words and indicative images can no longer be used. Many developers are marketing their projects highlighting the RERA registration as the sign of trust or emphasizing the “Zero GST” effect on the home prices to attract consumers.
The policy changes have made the market very tough and competitive. Thus an effective marketing strategy will play the game for the developers. “Consumers do not buy products. They buy product benefits” – these words by David Ogilvy are best applicable on the real estate sector in the present scenario.
One year ago the real-estate projects were advertised on the basis of the amenities provided by them. But, given the strict RERA guidelines about what can and cannot be advertised, the developers has shifted to complying with the new norms with RERA registration becoming the primary tool of project promotion.
Given the rising popularity of smartphones and falling data tariffs, according to a survey, digital advertising spend in India is likely to grow to Rs. 13,000 crore by December 2018.
Though the medium of promotion remains the same i.e. digital and print media, the changes are in the focus of the strategies. The pre-launch marketing is all about gathering the expression of interest from the consumers. During the launch of the project, the developer tries to penetrate aggressively into the market through on-site & off-site customer engagements. For most developers, this active engagement with buyers continues through the construction cycle of the project till the delivery and sometimes beyond that.
As Augustine J Selwyn Director- Marketing and Sales at Terraform Realty elaborates, “Sudden change in real-estate marketing is evident post RERA. Pre-launches without approvals have become a thing of the past. Off the Cuff Marketing programs have disappeared. Under writing Sales modules by Brokers is not the norm anymore. Sales Velocity will now be mapped to the Construction Funds required and the delivery date committed to RERA. Price calls & quantity to be knocked off at what price point, will be more based on Cash flow requirement (more logical), less on perception and market estimate especially with the designated account system in place. Clarity to the customer is far more now like, amenities, specifications, delivery schedule and carpet area / net useable area etc. Construction Funding tied to Sales Q-o-Q will also bring in a new angle to sales planning.”
A combination of Bought media – which includes print, digital, radio, television and signage and Owned media – which includes websites, emails, CRM, blogs and social networks, can communicate the brand and make it relevant for the Earned media channel – which includes PR and social media.
The Consumer Connect
The use of technology in customer relationship management and effective use of the data base of prospects is becoming increasingly important. Analytics and the sharing of data to be able to re-target prospects that visited a site and did not buy is the key. For the cost of selling to a prospect a company has already engaged with is lower than in generating a fresh sale given the lower level of demand in real-estate purchase at this time.
A favourite modus operandi of developers in terms of marketing is the endorsement by a brand ambassador. Talking about the relevance of a brand ambassador, Gera said, “By and large, brand ambassadors are really the only way of getting the attention of prospective home buyers towards the project. However, given the recent issues with the real-estate sector, brand ambassadors are extremely reluctant to associate with real-estate projects.”
Citing his own example, he added, “In the case of Gera Developments, for our ChildCentricTM Homes project, our sports brand ambassador has a tie up with the project for a longer duration as his sports academies will provide coaching facilities for the children and the residents in the project. This sort of a tie up is enormously value accretive not only for the real estate developer and his project but also for the brand ambassadors and the customers. Likewise, Learning, Inspiration, Networking & Training (LINT) is a community building initiative borne out of Gera Development’s corporate philosophy and brand promise for its commercial customers. It is a one-of-a-kind endeavour by any real-estate brand to build a meaningful engagement platform with their customers.”
In the changing environment, the developers are finding new ways connect to their homebuyers. Various activities have been initiated by the developers for the people living in their newly occupied projects. These are the nifty practices to attract the potential homebuyers. Every project is assessed independently as to what sort of marketing spend is required for the project. By and large projects in very prime locations especially commercial projects require much less marketing spend than projects which have been set up to create a destination.
“The cost of acquiring customers has gone up significantly. Be it the Digital or Print or Outdoor. Inefficiency of the sales force at the (POP) point of conversion or the lead generation team at call centre could further impact this cost. With many agencies now creating a professional set up to distribute real estate stock (especially due to RERA), the dependency on such channels is increasing by the day. In spite of heavy marketing expenditure, the distribution cost through local brokers, IPCs, Corporate / institutional broking houses are also rising,” stated Augustine
Considering the scale of changes that have been introduced in the realty sector, the industry has been extremely resilient. Developers are extremely focused on completing their on-going projects. This is more so in states where RERA has been implemented in letter and spirit. If this trend continues we will see consumer confidence return in 2018 and developers will use the year to recapitalise.