By: Shajai Jacob, Director & Head – Marketing & Communications, JLL India
Track2Realty: Even as the Indian real estate market shifts into the second gear of recovery, developers whose operations had slowed down during the lull are still faced with multiple concerns. On the one hand, the very basis of their business is the launching of new projects (the only function that really defines a developer’s viability as a going concern on the real estate market). On the other hand, it is vital for them to clear piled-up inventory in order to generate capital and enable clearances for new projects.
Clearing unsold inventory is also extremely important from the point of view of retaining existing customers, as real estate investors show a high propensity for exiting projects which are not clocking up healthy sales. By all standards, many developers find themselves in an unenviable situation at a time when the market is headed into boom mode after a prolonged slowdown.
- Â The causes of unsold inventory
When any business does not function efficiently, one of the most visible results of this inefficiency is lack of customers. In the services industry, this will be visible in reduced interest in the services offered, and little revenue-generating work on hand. In the case of product-oriented companies (such as real estate development firms), the evidence lies most visibly in piled-up inventory. Excess inventory happens when a company is left holding more of its products than the market is willing to absorb.
- What unsold inventory implies
Naturally, the visible evidence of excess inventory is regarded as bad for any business. It signals that the products are, for one reason or the other, not selling. In the case of Indian real estate, a very common misconception among buyers, investors and industry watchers is that developers saddled with a lot of unsold inventory are ‘paying the price’ of over-pricing their products. The assumption that follows is that reducing prices will catalyse sales.
In actual fact, this argument can fail to hold water. Many times, other developers’ projects within the same price band, location and category are selling at a much better rate. The fact that some developers simply have better marketing strategies than others is either not perceived or not well understood. If a developer himself lacks insight on why his stock not selling despite good price points and the right location and specifications, it can have serious consequences.
Developers looking at piled-up, non-moving inventory may panic and make counter-productive decisions. A futile blame game ensues if the developer views the unsold inventory as evidence that his sales and marketing team is not performing optimally. While there can be a grain of truth to this, it is also true that sales and marketing teams are only as good as the strategy that guides them.
If a developer has invested heavily into a flawed or incomplete marketing strategy, he is too close to the problem to see it for what it is. Insight is further clouded if a particular marketing strategy worked well in the past, should logically continue to work now but is no longer cutting it.Â
Real estate marketing: A constantly evolving concept
For a real estate marketing plan to succeed in today’s highly competitive environment, there are myriad factors that come into play. More marketing activities than ever before need to be deployed, and these new activities require specialized know-how and specifically trained and qualified manpower. Real estate is a product industry in which the rules of the game have changed drastically over the past decade, and will continue to change.
Today, maximizing engagement with the target market is everything. For a project launch to succeed, a developer’s clients need to have top-of-mind recall for his brand and his product. In the past, the resources available to a developer were limited to print advertisements, radio jingles, hoardings, word-of-mouth promotion and, of course, brokers. Today, clients need to be wooed across a much wider spectrum.
Not to put too fine a point to it, a developer who does not have a well-defined social media strategy today is a dinosaur doomed to extinction. Neither long-standing reputation nor excellent track record will help if these elements are not reflected online across multiple channels.
Today, approximately 243 million Indians spend a significant part of their lives online, and use the Internet to access and receive information of every kind. With the advent of e-papers, news portals and blogs, the manner in which information about anything travels has changed both in terms of direction and speed.
Platforms like Facebook and Twitter may have started off as mere social networking media, but today the power they wield in the world of business is beyond dispute. Companies of every stripe and description are investing massively into making their presence felt on these and other online platforms. It is literally a battle to stay relevant in a world that does not acknowledge the existence of anything anymore if it cannot be found online.
- Staying ahead of real estate portals
While the practice of maintaining well-crafted, informative and responsive websites has been a norm in the more developed countries for over two decades, Indian developers have only woken up to the need for this all-important calling card over the last 6-7 years. In this relatively short period, aggregator sites specialized in real estate deals and offerings have carved themselves the largest share of the online pie by investing exhaustively in search engine optimization and highly professional social media outreach.
The proliferation of these portals certainly spells good news for end users, because it gives them a more detailed oversight of what the market is offering than ever before. However, it is a different story for individual developers. The uniquely democratic business model on which property portals thrive hinges on showcasing as many projects and properties as possible. While developers can (and do) pay for higher ranking within this avalanche of options, the scope for focused branding and project-specific marketing on these projects is very limited.
Â Today, forging a distinct and prominent online identity is very essential long-term function for developers; but more importantly, an effective online strategy plays a critical role in the success of a specific project launch. In today’s market scenario, developers who lack a well-defined online marketing strategy invariably find their projects selling at a far slower rate than their competitors.
Â Vital ingredients of online visibility for real estate developers
- Â Dynamic website:Â It is definitely essential to have a good company website which provides oversight of the firmâ€™s projects. However, the â€˜fill-it-and forget-itâ€™ approach no longer works â€“ websites need to be user-friendly, informative and kept dynamic with regular optimization and updated content. A static website with no fresh activity to attract traffic is driven off the charts by competing websites, portals and other platforms
- Â High social media clout:Â Good Facebook, Twitter and LinkedIn presence with impressive and focussed followers is of prime importance, from a standpoint of visibility and branding as well as in terms of having a ready base of potential customers to address
- Â Engaging company blog:Â Blogs are an important tool in reputation management, and are different from websites by virtue of the fact that they speak to potential customers on a less formal and more interactive and informative level. On a company blog, a real estate developer can offer insightful commentary on the market and thus elevate the firmâ€™s status beyond that of a mere product dealership. A company blog which is regularly updated with interesting information attracts high search rankings online. Importantly, content on a company blog must at all times find the perfect balance between useful information and overt promotion.
Â Coming in New Marketing Avenues: Reducing Inventory, Building A Brand (Part 2):
- TroubleshootingÂ â€“ Fixing a faulty real estate marketing plan
- The new public relations dealÂ - Traditional Vs. Contemporary PR
- Client engagementÂ - Ditching The Monologue And Starting A Conversation With Customers