Tag Archives: Builders harass buyers

Poor consumer connect willful reality of builders

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Nothing hurts Indian real estate more than their inability to connect with the consumers. Ravi Sinha finds that right from showing approvals at the time of booking to the construction lifecycle, the developers continue to take the homebuyers for granted. 

Builder Buyer Meeting, Builder buyer conflict, Builder harassing buyers, Builders arrogance to buyers, Buyers protest against Builder, India real estate news, Indian realty news, Real estate news India, Indian property market news, Investment in property, Realty Plus, Realty Fact, Housing News, Track2Realty, Best real estate portal, Best property website “When a buyer buys a BMW car worth INR 1.5 crore does he ask to meet the owners of BMW? I think the expectation is way too high in real estate purchase,” says a Pune-based developer during an informal chat.

The statement, though in an informal chat, nevertheless shows the callousness of developer community at large towards the homebuyers. It also shows their level of commitment to the desirable element of consumer connect.

Going by the developer’s remark, one wonders whether a real estate purchase can be termed as another expensive purchase. In a BMW purchase, for example, the buyer can look & feel the end product before one takes a final call. But in real estate it is only a promise and the product is yet to be produced.

Moreover, the net-worth of a person buying a car worth INR 1.5 crore is not less than INR 20-25 crore, whereas for a house worth INR 1.5 crore the majority of buyers hardly manage the 20 per cent margin money of INR 30 lakh and the rest is through bank loans.

No wonder, the homebuyers are not impressed with the poor consumer connect of the developers. They are increasingly questioning their callous attitude and their frustration is vented out through protests, social media bashing and court cases.  

Relevant questions; unsatisfactory answers

“Even when I buy perishable consumer goods and there is any dissatisfaction I do write to the company and most often they do address my concerns. Why should the benchmark be so very different when making the costliest purchase of my life,” questions Ajay Raj, a Chandigarh-based dissatisfied real estate buyer.

Ajay is not alone to have such a query in mind. The homebuyers across the country are today asking whether there is any element of accountability with the biggest investment of their life in housing. The cynics even have it that the absence of any regulation makes it a sellers’ market with a ‘take it or leave it’ gesture on part of the developers.

Developers, on their part, assure that they have started interacting with the homebuyers and they even address the website visitors and solve their doubts and queries which have started reflecting in their conversion ratio as well. But by and large addressing the consumer touch points is few and far between in the Indian housing market.

More importantly, the consumers are nowadays being pacified due to the fear of consumer backlash than a serious concern to address the grievances and be seen as a responsible and committed real estate brand. 

“There is much space left for improvement and innovation to have better connect with the investors and facilitate them with the information they require for their final call. With the e-space platform also, the focus of Indian property market is to tap the NRI customers and other HNIs outside the catchment area or advertised geographical boundaries than to create a dialogue platform for the buyers,” says Devika Menon, a dissatisfied homebuyer in Chennai.

Reality of consumer intelligence 

Ignorance of the homebuyers for long has been the bliss of the Indian real estate developers. But the reality is that the informed buyer is today less of a liability than misguided consumer activism, often resorting to the consumer blackmailing in the process.

Consumer intelligence is hence being debated within the built environment of Indian real estate and there is a growing evaluation as to what is the way out in an age of informed buyers.

The developers, on their part, are mostly living in denial that the challenge of meeting up the consumer expectations in the Indian real estate sector is more challenging than in other domains. This is because the sector has been largely unorganised and that all stakeholders do not follow the same ground rules. 

In fact, the rules and regulations for the sector have varied from state to state and region to region. As a consequence, transparency in the dealings of many real estate entities has been found wanting. Low transparency has created a trust deficit, with most consumers viewing the sector with a high degree of scepticism.

Abhay Kumar, CMD of Grih Pravesh Buildteck agrees that customer intelligence should be a key component of effective Customer Relationship Management (CRM), and when effectively implemented it can be a rich source of insight into the behaviour and experience of a developer’s customer base.

“We always look at the CRM from the perspective of who all have bought our apartment. And the dynamics are defined by satisfied versus dissatisfied customers. I feel the time has come when initial buyers in the housing project should be made part of decision making; something that will lower the buyers’ grievances as well as generate goodwill leading to referral clients,” says Abhay.

In today’s hyper competitive real estate market, buyers’ viewpoint can no longer be ignored. It is hence a better strategy to make use of the intelligence of the informed buyers, instead of letting the ill-informed and disgruntled buyers making an opinion about the developer in the open marketplace.

Voices getting louder

The property rally and huge demand made the developers complacent and the buyers satisfied with the appreciation. And hence, there were only a minority of the buyers cribbing.

The slowdown made the cribbing buyers grow in number while the developers also realised that consumer connect is not only economical means to communicate but equally beneficial for brand positioning. 

Consumer connect is by and large still a missing link with direct interface meaning different things to different set of developers. A sector that has gone overboard on brand campaigns and publicity has not been seen translating that aggression for connecting with the customers to whom they want to convey the message.

Though on the face value they agree that the efficient consumer connect is the best brand positioning yet the scores of consumer cases tell a different story. The disconnect has its genesis with the way the sector has been witness to a horizontal growth where the focus has been more on volume than value.

When the market was at its peak ATL (Above the Line) mediums such as newspaper, radio, television, mobile and digital marketing took precedence while BTL (Below the Line) activities took a back seat.

The slowdown nevertheless made the developers get into a cost & benefit analysis where they realised the importance of connecting with the customer and are laying more emphasis on achieving the same. This has also been a cost effective way of communicating.  

Different developers had different ways to connect with the end users. While some of them shifted focus on the third party endorsed PR (Public Relations), there were others who tried to connect directly through various CSR related programmes.

Some of them even had innovative ideas to rope in the buyers as the brand ambassadors. The get-together with the buyers, both purchased and prospective ones, has also emerged as the means of direct interface.

But the question still stands – how far the sector has succeeded in connecting and communicating with the buyers?

The neglected customer 

Consumer connect is deliberately neglected by the developers as they have constantly taken homebuyers for a ride

KYC-Know Your Customers is something that builders do not think is necessary in real estate

The nature of real estate business is so opaque that the developers wish to avoid direct interface with the buyers

The government policies do not help the homebuyers to compel developers for transparent flow of information

Real estate is the second largest advertiser after FMCG sector but it is a monologue and not dialogue with buyers 

Next: Customer is not the king for builders

Relationship management lacking in Indian realty

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Relationship management on the lines of service industry can give much-needed facelift to Indian real estate.

Best practices, Best practices in Indian real estate, Professional practices in Indian real estate, Cheating in real estate, Builders cheating buyers, Consumer complaints in Indian real estate, India real estate news, Indian realty news, Real estate news India, Indian property market news, Track2Realty, Track2Media Research“When I entered the office of this developer I was surprised to note there were no bodyguards and security guards surrounding the office. It was just a pale security guard at the gate which looked quite contrary to the way most of the developers operate nowadays. It has been all the more surprising since this developer operates in slum redevelopment where the use of muscle power is a common reality. And yet the developer operates like any other corporate sector and not a builder. On being probed I found out that the trick lies in his relationship managers who manage the clients in such a professional manner that there is no major confrontation between the builder and the buyer,” Pranay Vakil, Chairman of Praron Consultancy shares his experience.

Investing in relationship management to earn the trust & goodwill of the homebuyers is something that the Indian real estate has not adopted as an industry practice. CRM or Customer Relationship Management is something that every developer today boasts of, but this relationship hardly goes beyond attending phone calls of aggrieved buyers and online registration of grievances.

Whereas the kind of relationship experience that Vakil is sharing is more on the lines of KYC (Know Your Customers) where the relationship managers have all the info about the homebuyers, his grievances, if any, and they are constantly met to update them on the developments with the housing project. This builds a level of trust and good will.

Divya Gehlot, a homebuyer agrees that relationship management of the developer not only breaks the ice but also goes a long way to understand each others’ point of view, thereby less acrimony. She had a similar experience where after booking the apartment the relationship manager did not forget even wishing her on the birthdays and anniversaries in addition to keep updating on the developments of the project. The dedicated manager was always there when she wished to visit the site.

“I was even invited by the relationship manager to show me many options for the tiles of the floor that they are going to use. I had the liberty of choice and since everything was done in a transparent manner I am not complaining now even though the delivery of the project is some eight months delayed. They have explained me the reasons of delay and I feel the reasons are beyond their control,” says Divya.

The question is how many developers are maintaining that kind of relationship management with the homebuyers. Are they even bothered to talk to the customers once the booking is done? As an industry practice today, the only interaction from the developers’ side is when they send the demand note for further payment. In some cases they keep updating over emails but one-on-one relationship management is a critical missing link in Indian real estate.

This raises a fundamental question as to unlike other matured industries why Indian real estate has failed to focus on relationship management with buyers and prospective buyers.

Rattan Hawelia, Chairman of Hawelia Group tries to explain method in the madness when he says that other matured industries which are focusing on relationship management are usually more service oriented whereas real estate has always been addressed as a product based industry. As per the traditional mindset, most of the developers consider that a homebuyer is a one-time consumer because of which they have always failed to explore the benefit of relationship management. Consumer connect is by and large a missing link with direct interface with homebuyers.

“I must admit here that the real estate sector has gone overboard on brand campaigns and publicity rather than identifying the gains by connecting with the customer. Exploring this medium by gaining trust and satisfaction of one customer for lifetime will surely open threshold for many satisfied referred clientele and direct boost in sales can be accounted. So far marketing communication has been majorly based on the perception and exposure at the basic level of the first generation business families in Indian realty sector despite the fact that relationship management is a key and effective component to connect with the customers,” says Hawelia.

How far is the perception that the nature of business does not support to have dedicated relationship managers a deterrent? Analysts maintain that due to the demand and supply gap the developers did not took a conscious call to defeat this perception and make efforts for word of mouth publicity through dedicated relationship management with the customers.

Of late, with the advent of second generation and overall changes in the ecosystem there has been sharp contrast in the nature of business. Now some of the developers have started understanding the benefits of relationship managers, and since the first visit of a prospective buyer a single point contact is being appointed who is responsible for all the needs of the buyer from readily sharing the required information & timely responding to their queries to arranging technical support from sales/administration/loan/construction/other department(s).

Such services helps in boosting the confidence of the customer manifolds and also supplements the mindset of Indian consumer who is investing his lifetime savings and hence wants to be treated as a preferred client.

In terms of the cost & benefit analysis of having a dedicated relationship manger for a group of customers, the operating methodology of most of the developers suggest there would not be major cost implications because the business model will remain more or less the same; though certain functional differences would be there in terms of promotion, lead generation and connection with the prospective customers. Such move will create a better understanding between the developer and the prospective customers which will surely help in building goodwill of the company.

The real deterrent is probably the developers’ inability to change with the changing market dynamics where the homebuyers are increasingly getting aware and demanding with their rights.

A dedicated relationship manger for the homebuyers can close doors to the market perception but what makes the developers uncomfortable is the fact that it also closes doors for deliberate delays and cutting corners in construction, as the homebuyers will more or less ask questions on a regular basis. Are the developers open to this customers’ scrutiny? The answer in today’s context is a clear No.

By: Ravi Sinha