Right from the consumer goods to automobiles, marketing and brand-building initiatives of industries include customer loyalty programmes. However, it has not gained ground in Indian real estate, since the predominant mindset is that the home is mostly a one-time purchase product. Nevertheless, a Track2Realty pan-India survey recently noted that no less than 0ne-third of the buyers with most of the top-class brands are repeat and/or referral buyers. In a market where sales are slow, the importance of customer loyalty programs, hence, cannot be underestimated.
Here are some examples:
- A developer in Noida, which is arguably one of the most challenging markets in India, gets 30%-40% repeat and/or referral buyers in almost all of his new residential project launches. The developer has a unique customer loyalty programme, where he offers early bird invitations at a special price to the existing customers and investors, before the project is officially launched at a higher price.
- Another developer in Bengaluru has a customer loyalty programme, where existing buyers get an incentive of 1% of the sale value, if they refer the developer’s projects to their friends and family. This developer also organises consumer connect programs at his projects that have already been handed over to the RWAs. The strategy is to get the buyers’ feedback and push the incentive schemes to satisfied home buyers.
- Some other developers offer home interiors and furnishings, to bring more buyers to their projects. One developer has also offered a refund of the CAM (common area maintenance) charges during the COVID-19 pandemic, since many of the amenities and services were non-functional.
Do rewards really create loyalty?
Aditya Kushwaha, CEO and director at Axis Ecorp, agrees that it has been a common notion that customer loyalty helps only in securing repeat sales. In real estate, getting repeat business from the same customer is rare and hence, not a lot of emphasis was laid on orchestrating good customer loyalty programmes. However, he maintains that in India, real estate is a sentiment-driven sector and a well-planned customer loyalty programme, can go a long way in helping a developer to secure referral sales. “Positive word-of-mouth is an important aspect of the real estate business. With the help of a robust customer loyalty programme, developers can develop positive word-of-mouth for themselves. Many developers organise engagement activities that lead to better customer satisfaction. However, these schemes need to be nurtured over time,” says Kushwaha.
See also: Buyers willing to pay more for homes from established brands
Vipul Shah, MD, Parinee Group, disagrees that the industry is not adopting consumer loyalty programmes. According to him, the developers are focused on improving relationship management through these measures. “A majority of reputed real estate brands advance their profit margins through their prevailing set of customers, either through referrals or repeat buying from the customers or through their loyalty programs. Such developers ensure that their customers get first-hand information on new launches, offers and attractive payment plans, during such programmes,” he says. A satisfied customer is significant for marketers, since their word-of-mouth recommendation can help in developing the brand’s image. To achieve this, however, the developers must first ensure that they offer a quality lifestyle and an experience that is worth communicating, he adds.
Vinit Dungarwal, director, AMs Project Consultants, points out that real estate works on different parameters than most other sectors. The relationship between builders and buyers is based on fulfilling the need and requirements and the consideration involved is significantly large. “There is a need for new-age customer loyalty programmes in real estate. The idea behind these, should be to reward clients for repeat sales. In addition, there could be certain benefits that the customer gets entitled to as a result of his long-standing relationship with the developer. The existing customers should get the best offers and first refusal on any offering,” opines Dungarwal.
Pros and cons of loyalty programs
Strategic marketing, relationship and loyalty marketing have been considered as a potential ROI activity in real estate and work well to amplify profits and build brand image. Retaining an existing client is directly related to the improved customer experience and engagement that is being offered by the developers and businesses.
There exist diverse ways by which the developers can build consumer connect – from utilising digital media, to staying in touch with referral or repeat buyers. Their word-of-mouth advertising helps in creating a ripple effect for the brand.
To further help in forming a considerable database of trustworthy customers, developers can take extra efforts to engage with customers through consumer connect programmes, by holding vaccination camps for buyers, incentivising referrals with free products, offering value-added schemes like assured cashbacks on every booking, or giving financial benefits by way of loyalty discounts.
Customer loyalty programmes have been a potent weapon to not only accelerate sales but also create a better brand recall and thereby attract a premium. However, the only caveat here is that it has to be a transparent offer that is known to the existing buyers, as well as the new buyers.
FAQs
What are customer loyalty programs?
Customer loyalty programs are a means to attract and retain customers.
How does customer loyalty program work?
A customer loyalty program in real estate works by offering discounts, rewards, cashbacks, monetary or other incentives like free furnishing, attractive payment plans, etc.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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