How the sales incentives in real estate take the wind away from marketing

How sales and marketing conflict in real estate hurts the development firms

It was nearly an year since we started our portal, which away from the humdrum of classifieds focused on real estate brand building and marketing, that we got a call from a reader interested in a property at Hyderabad. He was influenced by one of the very informative posts we had prepared on an upcoming project. We were very clear in our communication to him that we weren’t brokers. He had a long conversation with us and that whole day he went scouting for properties and kept calling us. We decided to try out something new. We called up the sales head of the property firm and discussed the case with him. He immediately extended a reasonably good discount to the customer.

We informed this reader about our interaction with the company. What happened next? None of us knew for weeks. I called up the reader and asked him about the decision he took. He told me that he bought the flat the very next day and was highly grateful for our help. I called up the sales head and he was surprised too, since he wasn’t aware of the closure. He later checked his own MIS and found the client sale was recorded under a leading Online Broker’s name. Now started an investigation into what really transpired here. It was very evident to us. The sales incentives are too misaligned in this sector. Most of the times what really happens at the project sales offices isn’t what we hear at head office. It all starts from the intense sales focus in real estate. In today’s bad market this sales driven industry is facing an even bigger question. “Is poor marketing resulting in poor sales?”. Ask a marketing head of any firm and he/ she has a different story to tell. Marketing departments are found complaining that there is intense pressure to achieve sales numbers because construction till the advent of RERA regime was seen secondary by many players. RERA now puts a bigger onus on project construction and timely delivery, thus the incumbents can not wait for high sales number to commence execution.

Chicken and Egg problem? Marketing vs Sales in real estate
Chicken and Egg problem? Marketing vs Sales in real estate

The above trend reminds me of my first employment ie private banking/wealth management in leading international banks. Banks were so enamored with third party fee income that they pushed all those supposedly managing wealth of clients to just keep selling investments like soaps. And the wealth managers would have a new suggestion every other month. A serious back lash hit the industry when clients were found on wrong footing during the 2008 crisis. Some foreign banks put in place sales process audits etc to check malpractice but to little avail. Mis-selling continues unabated in wealth management.

Are real estate companies creating In House Brokers?

How is it that two critical functions ie real estate sales and marketing aren’t working together. The latter department is doing its bit through out of home media, prints and on-line activities. This leads to generation of inquiries. Based on brand popularity and market conditions the amount of leads can vary tremendously. Once an inquiry enters the lead management system, the pre-sales follows up with the client to judge his interest in the property. If the LEAD is qualified ie the person who expressed interest is genuine the LEAD enters the sales channel. Many firms are still to create effective pre-sales process or instead pass the lead directly in the sales channel. The latter processes lead to poorer follow ups and leads going stale most of the times.

Sales-Vs-marketeers in real estate
Sales-Vs-marketeers

Now let’s understand what is happening at the project sales office. Suppose the QUALIFIED LEAD walks in for a site visit and shows further interest in the property to an extent he/ she wants to buy it off, this is where the conflicts begin. Most real estate companies link incentives of sales professionals to closures, a closure can be a direct or indirect ie through involvement of an intermediary (or BROKER). The incentive for closing a sale directly for firm’s employee may be higher, however the commensurate effort required is also more. The above doesn’t play out as simply.

Firstly in markets such as NCR, brokers have started a practice of pass back of commissions. Let’s say a broker gets a commission of 4 percent on a sale, he would incentivise the buyer through say half of this. Customers also act smart and use this route more often after having done their own diligence. Brokers and sales professionals of developers end up creating a good camaraderie over time. Now consider a scenario – a direct walk-in is referred to a broker by the sales professional, possible? Very much. This is exactly where the sales and marketing goals start to diverge in Indian real estate enviroment.

Will Sales and Marketing in Real Estate ever be on same page
Will Sales and Marketing in Real Estate ever be on same page

The real estate company is looking at most sales by spending the least, this is what marketing departments are trying to achieve. Burden of paying a brokerage is an additional cost to the company. However, developers would typically not want to annoy the broker lobby and would honor a sale any which ways. This practice or the inability to control it makes life tough for us and for the in house marketing teams. We along with them toil hard to generate good inquiries.

So what will it take to change the above practice and align everyone’s interest.

The first and foremost requirement is that of real estate firms to change the mindset from sales to customer service. To an extent, advent of RERA will help achieve this. Companies will be investing more resources in correct and adequate marketing.

Secondly, the realty firms need to align the incentive structure better. For that they need to start treating sales professionals like they would treat any other employee in the firm. Pay him well, link his performance to that of company and his own, train him well and groom him well. Why must they be treated like brokers? By linking sales recorded under his code to his bonus. Instead look at how much did he save for you by making a direct sale and acknowledge better. I have often heard from leading realty firms that they don’t have good staff. The harsher truth is that this industry doesn’t attract good talent for multiple reasons – not so lucrative salaries, too much control and intervention by the owners (As most firms are privately held), poorer organisation structures and too much orientation to sales.

Stay away from differently pricing the same product. Like they say in NCR the brokers are at times given special “deals” to offload inventory. So a client hears different prices depending on who he interacts with. Broker may have a favorably sounding deal for the customer. This results in customer transacting through the broker instead of the company. Such practice will demotivate the company’s own sales professional and he would willingly let that opportunity go to the broker.

We recently received feedback from a client of ours. We were quite happy with the response to the campaign we ran for them. We also heard of massive turn up of walk ins and few closures. However the numbers didn’t sound that encouraging when it came to closures. Needless to say that the client was still comfortable with our work, but we weren’t. So we decided to conduct a short survey on leads generated through us. We called up about 100 or so of 1000 enquiries and found at least three cases of people having already bought the apartment. Several more told us they are still waiting for the developers to call them up. Our hunch was proven right, yet for a sales focused promoter our hunch wasn’t enough to make him believe otherwise. It has been an uphill task for us to convince the company’s management, but gradually the tide is turning.

The sales vs marketing conundrum, Source – business2community.com

The sales funnel gets sharply narrow as we move along. It is the job of marketing to one enhance the size of the funnel and make it more useful by right targeting. But the marketing alone can not decipher the impact, it is the sales that need to provide correct and timely feedback. However that is not happening in our sector. The cost of service/ product is so high that incentives around a good sale are very lucrative.

This pushes the poorly paid and less trained sales professional to get into some sort of arrangement either with a broker or to find other ways to enhance his own payout. In all this marketing departments do not get the credit they deserve. This can not continue in the post demonetisation and RERA times. To get the best ROI, companies will have to control the sales and marketing well. Margins are getting squeezed which means the less you pay as referral fee the better you are. For this we all need to go back to the drawing board, before even sales and marketing it is the brand and its recall that will count. To get to that stage is a long and painful process, only the far sighted serious real estate firms will understand that others may continue to create an army of in house BROKERS.

Mumbai : 9th Edition of CII Realty & Infrastructure Conclave

2017: The Turning Point of India Real Estate | Decoding Opportunities, Trends and Insights to Manoeuvre the Curve Ahead | Friday, 7 July 2017: Regal Room, Trident Hotel, Nariman Point, Mumbai

Expected to be the Year of Change, 2017 is all set to witness the emergence of a new Transparent, Credible and attractive Realty sector in India. Regulation and initiative being the keywords this year, it’s time for various Government Actions and Policies to come into play and change the game for Real Estate in the country. JLL India are the knowledge partners of this day long Conclave that aims to unveil this transformation, the sector is bound to undergo. Hear industry stalwarts discuss pros and cons, the way forward and the J-Curve for Real Estate in India. A conclave that will set the stage for the future of the industry.

Click here to register​

RERA – The Verdict Is Divided

The strange ways India works has come to haunt the RERA implementation too. With just few important states going ahead with their version of the very important legislation the real estate industry is divided in its preparation and current activities. We have been meeting developers, some of whom are still unfazed about the Act while others have pressed a pause button on sales in ongoing projects. A large developer in NCR has shut down its marketing galleries seemingly to prepare itself for compliance to the rules (not notified yet) and, on the other hand others are pulling down their existing collateral. Worst affected seems to be Maharashtra where a registered broker came under fire and that has confused us at Propstory too. As an advertiser and a content portal, we wonder where we stand wrt RERA!

That said, we carry all latest information that is communicated to us at project sites or by the firms. So we are as updated as the industry players are, that can be considered as our standard disclaimer in these uncertain times.
From the markets –

3. Mumbai – Epsilon TowerLodha The ParkPanvel as an area

Regards


Ashish Mahajan

Palava City By Lodha – The Scale Redefines Townships

If you understand Mumbai real estate it is very difficult to miss out the marketing machinery that is Lodha Group. Every project of theirs ends up creating a buzz during pre-launch itself. This largely is attributed to the way company spins a story around its products and fetches leading personalities to endorse their projects. Whether its New Cuffe Parade or World Towers, Lodha ends up being talk of the town. The mother of all real estate projects that this company has undertaken in Lodha Palava City, no wonder Amitabh Bachchan is the brand ambassador here. While there are lot of complaints one get to read about projects at Palava City we do not have any first hand experience of the same. Our note is inspired by the sheer scale of the project and ready properties therein.

Lodha World School, Palava City
Lodha World School At Palava City

Location: Dombivli

First time I travelled to Shil Phata was early in 2014. I was looking for an apartment to make an investment, but in the affordable category. Thus I reached Palava City by Lodha through Thane-Kalyan-Dombivli route after having gone for a few site visits at Kalyan, Dombivli and Ambivli. Since I ended up being late I could only glance at Lodha’s completed phase from outside. Though I did see kids playing soccer at a World class football stadium at Palava City. Our team’s recent visit was a study trip to Palava. We were informed that 13,000 apartments have already been delivered in first phase of which 7,000 are occupied. Take a step back and imagine the scale, many property firms will not end up delivering 13,000 apartments during their lifespan. A phase at Lodha Palava which is currently under development alone has close to 100 buildings under construction. One can see these under construction buildings along the Badlapur pipeline road when traveling towards Ambernath.

To reach Shil Phata we travelled from Vashi-Koparkhairane-Shil Phata/ Kalyan road. There is a narrow patch of road along the MIDC Pipeline off Shil Phata-Mahape road that we took. This patch of road got congested and the crossing ahead of it was also blocked. The drive from this crossing to Lodha Palava was more or less smooth though littered, a peculiarity of Mumbai. Yet again the sheer size of the football stadium impressed us. To add to it the Lodha World School building and the under development mall at Palava added to appeal of an area which I sometimes mention is jest as being in middle of no-where. The latter is just a comment on no suburban local in the vicinity unlike other areas in Mumbai.

Phase I buildings which are occupied At Palava City
Phase I buildings which are occupied At Palava City

Rates

But then Lodha has plans and this isn’t a few years project. To develop all 4,500 acres Lodha will require over a decade. Over time there is a likelihood – connecting roads, metro (Kharghar) and suburban local stations will come up. As of today Lodha is promoting “Epic” (code name) in 1BHK, 2BHK and 3BHK configurations. The approximate price ranges are mentioned below:

1 BHK- INR 34 lakh to INR 52 lakh

2 BHK- INR 54 lakh to INR 65 lakh

3 BHK- INR 68 lakh to INR 80 lakh

The other thing which we found interesting was the crowd at the sales office. It was a Saturday and there were families with kids at sales office to check out property options. These days most property sites aren’t seeing encouraging footfalls leave aside sales. This is why relatively higher interest by consumers at Palava was a welcome change.

On-Site Report

Truly to Lodha style of marketing a gigantic sales office with impressive lobby and master plans greeted us. The project sales office itself was a large hall may be size of several class rooms. We later travelled to other side of the road where the first few ready properties by Lodha are now ready. This is where Casa Rio, Casa Rio Gold and Casa Bella Gold are located. The entrance is about 1.5-2 km off the main road. One travels along the river, though as the case is with most rivers in Mumbai they only feel like river during monsoons, rest of the time they are filthy. There is a promenade which is now developed. Lodha Palava extends beyond these to about 4,500 acres till Badlapur pipeline road.

Palava City marketing office and ready apartments
Palava City marketing office and ready properties in background

The big draw for any consumer at Palava today is – unit pricing, proposed amenities, likely development of the area, improved connectivity and global scale of development. Though Powai isn’t the right example, but 15 years back not many people wanted to live there because of lack of connectivity by suburban local trains.

However, Lodha in its recent marketing campaign is comparing Palava City to Gurgaon, and we ask why?!!

Under construction phase at Lodha Palava
Under construction phase at Lodha Palava

Palava City Map

Map of Lodha Palava City
Palava City Map
Source: www.palava.in

Credit Linked Subsidy Scheme – Another step towards Housing for All

Hi,

Various signals from the Government at the center keep boosting the prospects for Middle Income housing. The guideline paper for the ambitious Credit Linked Savings Scheme, announced earlier this year, includes a far larger section as qualified for the benefits. The Government is ready to subsidize loans upto Rs. 12 lks for people earning upto Rs 18 lks, however small the benefits be it does add to the possible capacity building through investments. Also the structuring of this scheme is commendable, as all the subsidy willl be credited upfront rather than being phased out. While the current slowdown in the real estate sector continues to hurt the prospects, we believe the smaller ticket homes will start seeing better days ahead. For the rest, better prospects of economy and wealth creation are more important, minus the cash dealings.
We have built enormous amount of information, almost all large scale apartment complexes) on the city of Hyderabad. All of it can be accessed here – Hyderabad page (there is more in the works). Similarly you may visit the respective city pages to access everything we have put down to date.
Few project updates too – PBEL City & Incor One City (we have been following for over an year now)
Wadhwa Group’s focus on VENTILIT Concept
For Propstory

Ashish Mahajan

Founder

Central Park – Crafting Spaces To Live In

Pleasant & Extensive Landscaping

Every end user in real estate waits for the handover of his/ her unit from the developer of the project. There is a sense of pride, achievement and ownership that is attached with a ready to move in unit, as one can experience the “real” estate for which he put the hard earned money to play. However not every ready to move in unit can be considered ready to “live in”? There are several reasons behind the same, ranging from poor or inadequate – designs, amenities, landscaping and utilities. Changes in the economic stature over time i.e. construction period can also be a big influence in a buyer’s preferences for his dream living space. More often than not the owner who is also an end user finds himself short of space, amenities and living quality at the time of moving in. This is why it is oft discussed in the buyer fraternity of real estate that a premium is attached to a property which is at advanced stages of construction and more so if it is ready to move in. It is because one can experience what he is paying for. In the recent years and also due to regulatory uncertainties, real estate in India has been one slow moving sector. This downward trend has actually pushed the investors and end users to look for ready to move in spaces. And thus buyers are spending more time in research looking for the best their money can buy in terms of life quotient and neighborhood.

However, Central Park is changing the paradigm in real estate development and ownership by creating spaces to “live in”. The unique concept called the Central Park Resorts, Gurgaon exemplifies the thought process behind the same. Starting with a Resort Safari that takes one through 54 points of interest and differentiation to a cup of coffee at the state of the art Sales & Marketing office next door, one can relate to practical yet exclusive luxury at Gurgaon.

Central Park Resorts : Foremost Location

After delivering the Central Park Golf Course Road at Gurgaon’s most coveted address, the Golf Course Road, the developer chose ~50 acres of land at the Subhash Chowk, where the Sohna Road intersects Netaji Subhash Marg, an important infrastructural node in the city, for Central Park Resorts. Sohna Road is amongst the prime commercial districts of the city which runs parallel to the Golf Course Road. Central Park Resorts today redefines the skyline in this fast growing region of Gurgaon not only because of the development plans and architecture but also for its location. Central Park Resorts is the first residential property just off the Subhash Chowk and when one experiences our offering at Sector 48 he would go on to expect similar treatment at properties that were to follow it. But that is not the case and it is unlikely to be taken over by any other competitor, since much of this region is already developed and inhabited.

central park resorts
Entry to Belgravia Towers
Golf Carts at the surface level of Central Park Resorts
Golf Carts at the surface level of Central Park Resorts

Extending the panache for prime locations, Central Park has chosen a vast area at South of Gurgaon for its upcoming development – Flower Valley, A premium Global Township

All the above locations are in proximity to International Airport, Delhi Metro stations, business spaces, hospitals, schools and shopping arenas, thus adding to resident’s conveniences. All it takes in just 20 minutes from T3 to get to Central Park Resorts.

Refer Developer’s Portal

Unique ‘Zero Vehicles on Ground surface’ concept

What strikes you when you enter Central Park Resorts is that the complete complex is a Zero Vehicle area. To reach and move within there are buggy’s to ferry the residents and visitors. One can take a leisurely stroll through the beautifully landscaped gardens too. This unique feature puts you at peace- no vehicular traffic, no worry about kids safety and no toxic fumes as a result. This ONE USP has been singled out as the top of the recall feature that every visitor or resident finds praise worthy.

Best of class people’s brainchild

Central Park has teamed up with leading architects, landscape designers and interior designers from around the world. These include HOK SINGAPORE and RK Associates India for architecture and engineering, Green Architects (GA) for the landscape and Hirsch Bedner Associates along with PIA Interior for grand interiors of their developments.

Fully furnished unit for Beau Villas
Fully furnished unit of Beau Villas

The management is led by the visionary brothers-  Mr. Amarjit Bakshi and Mr. Kanwaljit  the former an IIT Alumnus and the other brother with decades of experience in Infrastructure. Together the team adds a lot more, both at conceptualising as well as execution and are ever ready to go the extra mile in creating and delivering living spaces that go far beyond just brick & mortar real estate.

Central Park Resorts : Thoughtful Amenities

It is hard to miss the grand “tunnel” which accommodates the entire parking for residents as well as the visitors to this gated complex. Residents’ safety is paramount at Central Park Resorts as there is no surface parking and the vast tunnel that has two entrances and exits, not just serves its purpose but introduces the grandiose appeal of this address. At the ground level to ferry the residents and visitors an adequate number of electric golf carts (buggy) are provided.

55,000 sq ft of modern club house is under development. It will have racquet games, board games, temperature controlled pool, library and community hall. A unique bowling alley and business centre will further accentuate the offering.  This is in addition to the 35 acres of lush greens that form the soul of the gated complex which will also feature an 18,000 sq ft of kids play area.

The Tunnel at Central Park Resorts
The Tunnel at Central Park Resorts

The central greens and periphery not only host an amphitheater, golf putting, tennis & badminton court, jogging tracks but also a grand fountain, cycling, skating track and restaurants. A South Indian as well as an Italian restaurant are already functional while an ice cream shop also dishes out delicacies here. Further at The Room serviced apartments a multi-cuisine restaurant is operational.

Pet Hotel, a sort of amenity every canine or feline lover would value but not have access to, operates at Central Park Resorts. This is a big relief for those who wish to leave their pets behind when they travel. Pet Hotel which also offers grooming services can inspire several of our residents to own up pets in their household.

One can avail of the concierge, housekeeping and even butler services at doorstep at this coveted address.

The Room offers one of the finest living experience for those staying at these serviced apartments. The gymnasium facility, swimming pool, spa, salon, a multi-purpose hall, library and business center facilities are complemented by a multi-cuisine restaurant and spa.

Varied Living Spaces at Central Park Resorts 

From Customize Ur Homes (bare shell apartments) to Design Ur Homes (semi-furnished) to ultra-luxury  and Ultra luxury fully furnished-ones that are completely fitted with premium furniture and white goods, there is ample choice for buyers. From conventional apartments at Belgravia towers to Beau Villas with private Gazebos or Sky Villas that make a towering style statement, it is one residential project that does justice to economic and social standing of the elite of the millennial city.

Fully furnished 2BHK, 3BHK and 4BHK Beau Villas at the ground level span 1416 sq ft-4224 sq ft and feature – landscaped concept master bathroom, housekeeping services, private gazebos in the lawn attached to the apartment.

Private Gazebo to Beau Villas
Private Gazebo to Beau Villas

The 27 Sky Villas, 3 or 4 floor in their design span 5612 sq ft to 11872 sq ft. The sheer size and designs are for those who seek “have arrived” status in their life cycle. Such expansive luxury is being offered to select few through invitation only.

The Belgravia residences 3BHK and 4BHK range from 2647 sq ft to 3931 sq ft. Like all other unit types these come with air conditioning and depending on the budget range the flooring, internal amenities and furnishing levels may vary.

Not only does the developer offer units on sale at Central Park Resorts but also assists in leasing these units for investors and those who have to move out for some reason, but want to retain the address for future needs.

Ready apartments at Central Park Resorts
Ready apartments at Central Park Resorts

Central Park Resorts : A neighborhood of the who’s who

A terrific concept of living backed with great world class amenities and facilities and 5 star services including housekeeping, laundry and F&B -2 specialty cuisine gazebos and a multi cuisine restaurant, a juice bar, a candy shop for kids, it’s but natural that the residents are top CXOs, Directors and business magnates. The expat community finds themselves at home here with expats from more than 15 countries making Central Park Resorts their India address.

5 Certifications at the time of possession

Central Park offers 5 Certifications at the time of possession. Every Belgravia apartment owner has appreciated this aspect which is a sign of trust as these certifications are provided by leading agencies after thorough audits. The 5 certificates are: Super Area & Escalation, Specifications as per Apartment Buyer Agreement, Certificate for Design & Safety UPVC Glazings, Design & Safety Certificate for Structural Stability & Safety of Mechanical, Electrical & Plumbing

In A Nutshell

Central Park Resorts upholds the ethos to focus on functional designs yet addressing the needs of our customers of variable budgets. Customer centricity that Central Park claims as its prime value is further addressed through experiences such as – lower than usual particulate matter noticed in the ambient air, no vehicular movement on the surface and effective waste & water management. Central Park Resorts is already an address of choice for leading CEOs, entrepreneurs and professionals in the NCR.