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Given the role of family and peers when it comes to decision-making and zeroing in on a property, customer loyalty programs are a good way to create influencers out of a brand’s loyal customers. Those rewarded with benefits under such programs, could be the best marketers for a developer firm. At the same time, these consumers/home buyers also gain through such value-added services. While loyalty programs in India for real estate, have not received much publicity, the real estate fraternity maintains that these were always around. However, it is only now that its possible benefits are being taken into account.
The concept of customer loyalty programs in real estate
With the real estate sector inching towards transparency and regulation, developers and service providers are investing in improving the overall experience of a consumer.
A happy consumer is important for marketers, because their word-of-mouth recommendations can help the developer to develop a strong brand image. To achieve this, the developer must ensure that they offer a lifestyle and an experience that is worth communicating. If a project is worth the home buyers’ money, customer loyalty programs add to the overall worth. Akhil Saraf, CEO of Loyalie says, “Customer loyalty in real estate, is measured by how many people the customer influences in and around them, to purchase a property from that particular builder.”
Advantages of loyalty programs for developers and channel partners
Saraf says that referrals contribute up to 20% of sales for big real estate companies and estimates that in another couple of years, it could reach 25%-28% if the loyalty programs become an organised offering.
“Referrals are the cheapest and fastest way of selling. Not only does this increase sales but also reduces costs.
“On our WinnRE platform, channel partners are not only getting a structure to make it easier to work with different developers but also transparency in dealings. The entire system is also tied together with a loyalty program, to recognise and reward the channel partner’s overall contribution to the real estate companies,” Saraf explains.
Like any other relationship, loyalty programs also need constant nurturing. There are thousands of customers, their aspirations, their grievances and criticisms. This requires dedicated and sustained efforts, on the part of the company and there is a cost involved in this, explains JC Sharma, vice-chairman and managing director at Sobha Limited.
Advantages of loyalty programs for home buyers
From a home buyer’s perspective, loyalty programs such as Loyalie’s ConnectRE platform, help the buyers to get value-added services like deals and discounts from companies they engage with, both, online and in their local area. “We enrich the possession experience for them, by making moving in easier and have events and activations in their housing society. We are also rewarding customers with 1% of the sale value, in cases where there is a successful booking out of their referrals,” adds Saraf.
Sharma talks about their popular customer loyalty program, Sobha Privilege: “Our customers get first-hand information on new launches, exciting offers and attractive payment plans during such programs. In addition, they also receive rewards for referring their friends and family. We have recently introduced a very user-friendly mobile app. With this, the customers can connect with us any time of the day and get an update on their reward points.”
In terms of the price of such services, Saraf points out that buyers will be ready to pay a premium, for anything that meets their expectations. “Buyers are willing to pay a premium, just to ensure that the project will get delivered. They seek a lifestyle from real estate companies, which is why amenities have become one of the biggest influencers of a sale,” he says.
Real estate referrals in India
In a sentiment-driven sector, the volume of sales through referrals may vary. In a small city like Nashik where good brands click instantly, referral sales of a developer could amount to 70%, while in a market with a large inventory or a cosmopolitan culture such as Gurugram, referral sales are less than 5%. On the other hand, Mumbai typically sees 15%-20% of sales coming through referrals, says Saraf.
Will customer loyalty programs replace marketing departments?
Unlike marketing departments, loyalty programs are a service. The latter, in no way is a substitute. “They are a value-add service that helps organisations to engage directly with customers. Loyalty programs optimise a company’s marketing campaign and increase their reach. However, such programs can be successful, only if the post-sales service team is efficient,” says Sharma.
Moreover, this is not a new concept either and has worked well for the retail and banking sectors. While some developers have their own loyalty programs, while some opt for service providers and others are yet to try or reap the benefits of this avenue. Nevertheless, industry experts maintain that loyalty programs are here to stay and will benefit the stakeholders, even though these are not the primary revenue generators for developer firms.