Property Sells . . . But Who’s Buying?
Current market conditions have led to developers trying various sales and marketing tactics. Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia shares some pointers.
Some developers appear to be selling jewels. Others are asking buyers to ‘Beat it’. Some are enticing potential buyers with ‘Lock and Roll’ schemes. And there are even those offering all-expense paid football holiday extravaganzas in Europe! These were just some of the sales and marketing tools being employed by local property developers to attract buyers as highlighted by Sarkunan Subramaniam, Managing Director at Knight Frank Malaysia Sdn Bhd. He was speaking at Regional Economic and Business outlook Conference 2017 by REHDA Institute, on the topic of ‘How to Sell and Market Creatively in the Current Market?’.
The Right Strategy
Sarkunan says, in short, what developers are really trying to communicate with these innovative sales and marketing schemes are:
- Deferred payment
- Financing Assistance
“The rest is just gimmicks,” he pronounced. He noted that some developers have focused on some key areas to ensure that their campaigns get the desired results, in particular addressing first-time home buyers’ financing issues. Other key strategies in the current market included focusing on excess stock as well as keeping end pricing attractive with smaller-sized units. He also observed more affordable projects in certain locations as well as developers selling an aspirational lifestyle, which he terms as ‘Fast Forward Future’, where potential buyers are tempted by a lifestyle which they cannot afford now. Sarkunan says that while some of these strategies have been successful, much more needs to be done to ensure sales remain vibrant.
Reinventing the wheel
Sarkunan says one of the biggest wastages of money is when buyers fork out large sums to purchase a home, only to tear most of it down for renovation, further jacking up the costs. He suggests that perhaps it is time for local developers to follow the lead of China and Thailand where developers are building just bare shells, thereby reducing building (and renovation) costs.
He also noted the need to reinvent the product by offering different quality and cost packages to suit differing needs. Developers also need to adhere to more efficient designs and adopt the Industrialised Building System methodology.
Create a Buzz
“You have to be the go-to expert with in-depth market knowledge,” said Sarkunan. He believes this to be key in building a developer’s reputation and garnering repeat customers. “Being a thought leader is the way to go.”
He also suggested using collaborative partnerships to sell creatively, especially for higher end products. The right brand partners will raise the profile of the development.
The next step is to identify the right marketing platforms and Sarkunan says not enough resources are being pumped into digital platforms. “How much are you spending on your website and digital marketing?’” he asked, noting that that is where majority of local consumers get their information from today. Use the right media to create awareness for the product and says social media is a great platform to achieve this.
He also asked that developers step up with the use of technology, utilizing movies, drones and videos to attract buyers rather than the conventional scale models at show galleries.
Know Your Client
Sarkunan insists that sales people in the property industry are never ‘off duty’, as they are always looking to network and identify new customers. Then create a strong client database to ensure developers can reach out to the intended target markets.
Of course, price is all-important and Sarkunan warns about over-pricing and then later having to slash prices to offload stock. This will lead to unwanted stigma for the developer. Here, he suggests that developers sell a lifestyle, not just a house.
Young and Innovative
Sarkunan also believes that a young and hungry sales team is essential as younger personnel have new and innovative ideas. He also encouraged developers to outsource sales to other countries, even at the cost of higher commissions.
He warned against lumping the entire budget into a launch campaign without provisions for other platforms. “Campaigns can run flat if not budgeted properly,” he said. And this is where, he believes, developers must be innovative in their sales and marketing campaigns to stand out from the competition and to create worthy buzz for the products.
Last but not least, Sarkunan says that the best advert for a developer is a blemish-free track record. Developers who consistently deliver on time products that are defect-free will attract repeat customers and build a solid reputation.