Tag Archives: Consumer connect in real estate

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

Who cares to care in real estate?

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Care for customers, employees, other stakeholders and environment is something that is not just symbolic best practices. Indian real estate nevertheless fails to acknowledge it as a sound business strategy that could reap the benefits in the l0ng run. 

3C CSR, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyOne of the most critical aspects of in business is ‘Caring Factor’. Every business on the face value tells its customers and stakeholders, including the employees, that it cares. It cares about them; it cares for them. It wants to make them feel loved and appreciated.

But if it is the Indian real estate the counter argument has always been: why to do that? The phenomenal growth of the sector has imbibed the inherent arrogance that they have the advertising clout to look & feel good and project it to the larger audience the same way.

But then advertising has serious limitations when it comes to conveying empathy and the harder one tries the more alienated the audience becomes. There is, of course, another way and it has to do with cash engines. Moreover, the slowdown has exposed to the reality that a developer cannot always escape with the lack of inter-personal relationship when the business is down.

The importance of care in the business environment cannot be under-estimated when one recognises that business organisations are ‘complex systems’, rather than ‘machines’. The realisation empowers to a different view of the business: it is the strength of connections between people that makes an organisation resilient, adaptable, robust, and successful in traditional bottom-line terms. Caring about others is a connection strengthener, and is therefore good for business.

Care is not usually thought of as a power word, but it is a power action. When our interactions are filled with genuine care, not only are our connections strengthened, but also our relationships are enriched. We all look for and long for security in our lives. Security at all levels, from personal to global, resides in the strength of our positive connection to others. Our power and control in life is in our ability to ‘care-nect’.

In the context of Indian real estate ‘care’ is a foreign concept in most of the organisations, but in matured industries it is part of what defines them. Care is a soft skill that Indian developers need to usefully develop. And it starts with each and everyone of the value chain.

So why are Indian develoers still not getting the balance right? Several larger organisations will point to the fact that what they do is never communicated properly. Howsoever debatable that stand may be, it still raises more questions than settling the answer. Why has that not been communicated well? Whose responsibility is it to ensure care connect is communicated well, and regularly to the stakeholders?

Corporate Social Responsibility (CSR) is a new concept in the Indian real estate and companies are yet going through the learning curve. For most of the developers it is an emerging trend to explore with ‘why not’ mindset.

There are not many smart realty companies to have found out the benefits of CSR both in terms of engaging their stakeholders as well as brand enhancer. The developers need to shift their focus to broader and deeper issues surrounding sustainability, accountability and governance concerns.

A real estate company organises painting competition, another one takes a clean the city sweeping drive for a day. Some other companies organise school for the children of construction workers. Someone organises a blood donation camp for a day as the CSR effort. That is what is the understanding about Corporate Social Responsibility (CSR) in the Indian real estate. 

Realty companies are definitely moving ahead of getting into CSR for fulfilling mandatory provisions, though CSR as of now means different things to different realty companies. Hence, Indian realty has not completely been able to link CSR strategy with their overall brand image. 

It is in general believed that while a local brand can take a selective and partial approach in the formulation of CSR strategy, a global brand strategy should be defined from a multidimensional and multi-stakeholder perspective.

This brand strategy, however, is yet to take off in the Indian real estate that is predominantly a local business but is increasingly striving to be seen in global markets. The realty companies have by trial & error method trying to formulate CSR strategy that enhances brand image from a local perspective and glocal (global & local) objective of fund raising. Many of these companies also maintain that CSR cannot be a brand driver, and there is no scientific metric to calculate ROI the way other branding efforts are being evaluated.

Diipesh Bhagtani, Executive Director, Jaycee Homes, says that CSR alone cannot be the catalyst for brand building; there is no case study as such. CSR is seen more as a responsibility towards the society rather than a business promotion activity.

“CSR brings a company to limelight as a socially responsible company. It also goes to say that a company understands the need of the day towards the entire society, may it be towards green revolution or towards special ability children or even patients with terminal illness who cannot afford treatment. This forms a very different kind of branding for a company and has a rub off effect on the company,” says Bhagtani.

However, there are others who believe CSR must be linked to brand positioning in the overall scheme of things. Jackbastian K Nazareth, Hiranandani Communities advocates that brands must operate responsibly in the communities they serve. “This is particularly true of real estate brands, as the category has historically been mired with perception issues.  CSR activities are a credible brand building tool and must be leveraged,” says Nazareth.

Kamal Khetan, CMD, Sunteck Realty also claims that being a responsible corporate entity, CSR forms a very important aspect of their day to day functioning. The company has formed Sunteck Foundation that is a dedicated entity which under its umbrella supports various initiatives that lead to social betterment.

“This includes a wide spectrum of activities like green initiatives, education support, empowerment of the underprivileged and many more. The Sunteck Foundation under its umbrella supports initiatives like Tree plantation, medical checks up, notebook distribution, food distribution and many other such initiatives,” says Khetan. 

Devang Varma, Director, Omkar Realtors & Developers puts it in slightly different perspective when he says the CSR perspective is inter-woven in their business model as any form of redevelopment impacts the society at large and stakeholders in specific.

“At different levels of our brand communication, the essence of upliftment of economically weaker segment and direct/indirect benefits accrued by quality and responsible redevelopment gets communicated to our audiences,” says Varma. 

While there have been very few successful case studies in effective CSR strategy by the Indian real estate, some endeavours, of late, indicate the shift towards wilful CSR. For example, in Kolkata a real estate consortium stepped into fund the clean-up of Bank Plot jheel, a water body that was under threat of land sharks in Saheednagar area off the Prince Anwar Shah connector to the Bypass. The development by the consortium is significant as it points to a change in the mindset of realty players vis-à-vis their connecting to the public.

“When the Centre has mandated that we spend a portion of the profits on activities that reflect corporate social responsibility, it makes sense to invest in improving the environment of neighbourhoods because that will make the place more livable, and hence, more amenable to development,” says Sushil Mohta, South City Projects Director.

While the value of a comprehensive CSR program can not be understated, the Indian real estate has by and large been slow to adopt. It seems the developers were initially unaware of the implications and costs of such a program, and its critical linkage to ROI and brand enhancement. Some more matured property markets globally have successfully defined the CSR programmes for the right reasons.

Their Indian counterparts are scaling up gradually but in order to remain authentic, it is critical that all levels of management are committed to a comprehensive CSR program for the right reasons — and not simply for financial gains and some media visibility.

Poor consumer connect dent on Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: A Track2Realty study finds that the buyers hardly get to see the approvals obtained by the developers.

Homebuyers harassment, Project delays, Developers fault, Builders' high handedness, Real estate malpractices, Realty complaints, Homebuyers' woes, India real estate news, India property market, Noida property market, ATS, Amrapali, Supertech, Panchsheel,, Track2Realty, GaursonsA few ground realities that suggest real estate continues to be sellers’ market, more so with an opaque one.

8 out of 10 home buyers are not sure at the time of booking as to whether the developer has got all the mandatory approvals for construction

7 out of 10 developers refused to showcase even the project CC (Commencement Certificate) to the buyers

7 out of 10 buyers pay the due diligence fee to the lawyers to get the legal titles of the land, while developers only assure them verbally

9 out of 10 buyers have absolutely no idea about the fiscal management of the project and its execution feasibility

8 out of 10 buyers were persuaded by the lending banks to go by the verbal assurance of the developer

6 out of 10 home buyers really had to fight with the builder to get a copy of OC (Occupation Certificate) and CC (Completion Certificate) 

The above statistics says a lot about the way the home buyers have been taken for a ride. The developers in many cases do not have all the approvals in hand at the time of starting the booking the project. Many of them simply do not entertain the home buyers to showcase the approvals, even if they have obtained it.

Nothing hurts Indian real estate more than their inability to connect with the consumers and showcase them was is their legal right. The seeds of lack of trust in the minds of the buyers are sown at the time of booking itself as the developers do not find it necessary to showcase approvals, even when asked to, and it continues throughout the construction lifecycle.

The agony of the buyers continue till one fights for the Occupation Certificate and Completion Certificate. In Noida many home buyers have got the possession of the apartment and are living over there without the registry, as the developer has failed to get the OC for one reason or the other.

“I was simply told by the builder to take it or leave it when I wished to see the approvals and the legal title of the land. With no choice left, I made the payment of initial 20 per cent and the project has not yet started after two years now,” says a dejected Rakesh Mathur in Gurgaon.

Developers, on their part, assure that they have started interacting with the home buyers 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.

Manju Yagnik, Vice Chairperson, Nahar Group defends that scenario is changing fast and the real estate has undergone a massive change in last one decade. According to her, there has been greater transparency and considerable awareness among the home buyers. Therefore, it cannot be agreed completely that consumer connect is a missing link and the developers refuse to show the approvals.  In fact, of late, social media and digital project promotions have effectively improved the transparency.

“There is a slight gap that exists due to certain conditions such as perception and lack of understanding on various facts which are beyond the control of the developer. These conditions will include lack of necessary infrastructure, complex real estate regulations etc. Consumers are less aware of the formalities and rights involved while purchasing a property. But these flaws can be overcome by creating better awareness among consumers,” says Yagnik.

However, Nikhil Hawelia, Managing Director of Hawelia Group admits that this is a prevalent market reality where the developers simply refuse to entertain the home buyers who ask so many questions. The idea is to simply have only that kind of buyers who could be handled easily. Since the market continues to be sellers’ market, most of the needy buyers just succumb.

“When I myself volunteered to showcase all the approvals and legal title to my home buyers in Greater Noida West they were all surprised. They had been witness to an altogether different kind of market reality. But in hindsight today I can say that those buyers have stood with me, even when the project was slightly delayed. As a matter of fact, some of them became my repeat customers as well,” admits Hawelia.

This any way is more of an exception than the market reality. The prevalent mindset of the builders is that why to entertain so much to the buyers and make them even more demanding. As a developer sums up the discussion, while requesting anonymity, “the more you try to be open with the buyers, the more they get demanding. We as the developers do not want one more party to arm twist us, as already the development authorities keep us pushed to the wall.”

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

By: Ravi Sinha