The secret property developer gold left in finished estates and how to mine it!

By Wayne Moran

Want a sales free kick start for your next project? Read on…

The focus of many property developers is on a single project basis from a marketing point of view. Plan, build, advertise, sell, settle then move on to the next project.

However a golden untapped potential prospect list already exists in the form of your previous development buyers, almost buyers and tyre kickers from your last project.

The challenge to mining this gold from previous developments is to capture complete marketing & profile data about the buyers at contract time. As a bonus you get valuable indicators of what advertising is and is not working.

We all know it is crucial to track where the buyers are coming from:- was it a newspaper ad, the billboard on the highway, the morning radio spot or the TV ad that got the potential buyer to your estate office Saturday morning? The worn out axiom is sadly still valid today – I know I waste 50% of my advertising, I just don’t know which 50%. The great tragedy is many developers waste 100% of their previous ‘sales’ and ‘almost sales’ data from previous developments.

The concept presented here is to not only track where your sales are coming from for adjusting your advertising but also to use this golden buyer and almost buyer data for seeding your next development’s sales push. Don’t just let the buyers and almost buyers from your last project sit in the ground, mine them for all their worth for your next project.

Why is prospect mining so important?

There is a rule in marketing that your advertising agency doesn’t want you to know: the ratio of marketing success is 60% audience, 30% offer and only 10% the creative. That’s right! Only 10% is affected by your advertising gurus efforts.

The first 60% of the success or failure of your marketing campaign is due to the audience that received the message. If it gets to the right people, hot buyers with cash burning a hole in their pocket and in the market for a new home or investment property, then bang, you get them signed up!

The next 30% is due to how well you constructed your offer. This has a lot to do with the quality, location, facilities and price of your development. Give them what they want at the price they can afford and you’ll hook them!

The disturbing part is that only around 10% of the reason why someone buys a piece of your development is due to the advertising look and feel. The carefully crafted words written, the expensive photo shoot undertaken, the voice over guys deep sultry tones, the colour scheme, even the font chosen to convey that modern stylist look your advertising agency felt was crucial for your development, has only a tiny impact in the great scheme of things.

Isn’t it funny how we spend 90% of our time fiddling with something that only has a 10% impact on the outcome! Sadly too many developers typically fly by the seat of their pants with audience selection which is where a campaigns success is made or fades.

Most clients I have dealt with have taken great care to plan, design and deliver an outstanding development product and have priced it well within the current market. In short they very often get the 30% ‘offer’ right on the button.

Then they engaged a flash advertising agency, spending countless thousands on the 10% creative: photo shoots, graphic design, TV ad editing and radio talent hiring. Then to deal with the audience issue the ad agencies book a big spread of ads across a wide range of media. Some of the media selection is not based on carefully assessed demographics but based on who provides the greatest commission and provides the better free lunches. Everyone involved then sits back to watch the sales roll in. Whoops!

The audience bit is usually left up to the ad agency and their cunning strategy is to send your marketing message out on every marketing medium known to man: newspaper lift outs, magazine ads, radio scripts, TV spots and out of home advertising such as billboards. It’s a scatter gun approach and is risky with the 60% success impact that is audience selection.

Sometimes, nothing happens. The sales trickle in, underwhelming the sales targets, your equity partners and the financiers.

So many developers in this position turn to their ad agencies red faced and ask for explanations. The usual initial defence is that it is the sales people on the ground are failing to convert the prospects that the advertising has attracted like bees to honey. Who knows? The sales force doesn’t keep any detailed track of who visited and what the outcome was. Anecdotally they report back that they didn’t get that many people turn up in any case.

“Ah-ha” says your Ad Man, “it’s the advertising – if only you (the client) had agreed to our original proposals instead of requesting those changes we would have been all right”!

Your Ad Man then rolls out a long list of changes they feel need to be made to the various bits and pieces of the marketing campaign, new photo shoots, new artwork, different camera angles for the TV and a slightly changed script for the radio. More money and fiddling around the ‘10% edges’.

So the seeds of failure may well be sown in your previous project if you haven’t collected the buyer data to use in both guiding your advertising as well as providing a free kick start to your sales push.

As has been shown the key to success in project marketing is audience. Sure if you had two high rise developments next to each other with similar features, position and facilities success would come down to that last 10%. It is also important that your offer is being communicated to your audience in an appealing, error free manner. But get audience wrong and you will definitely lose the game!

One of the remarkable aspects to the turnaround work I do for development projects who are struggling with sales is the untapped gold mine of prospects they virtually excommunicate after a previous project is completed. These break down into three segments: The hottest in my experience are the previous buyers. Next are the almost buyers which are buyers who had their contracts fall over for one reason or another or almost signed but the sale was lost at the last moment. The last is tyre kickers. I am not talking about those smooches who just want to be entertained on a dead weekend by looking through a new high rise development but those discerning buyers wanting to get a feel for the market and what is on offer before committing to a serious search.

The point is that all three were interested and in the market. The buyers and almost buyers had the financial ability to buy and are experienced with you and your product. With the tight and overt branding of residential estates to development companies, this is becoming an important consideration for buyers. With estates becoming far more feature rich, buyers want to deal with companies who keep their promises on the future facilities in the development.

Maybe you’re not the most loved developer by your previous buyers. Maybe that’s the only reason you don’t do well in getting repeat business from your previous buyers? If that is the case then this article is not for you. Better stop reading and go back to sledgehammer advertising to get your leads.

Glad to see you stayed with us…

It is all very nice to say a ‘big yes’ to prospect mining but how do you successfully execute this strategy? How do you get sales people to capture this golden data? How do you make it accessible from site to site without massive computer network infrastructure and extensive training?

Lets deal with the biggest problem first - Sales person compliance. I discovered the trick to sales person compliance halfway through one of the first implementations of this data mining technique for a client. Things were not going well. The estate we were working on had their sales picking up and the client was in the final stages of approval for their next big development. However we weren’t capturing the data about the buyers and almost buyers we needed to seed the sales push for the next estate with pre-sales about to kick off.

The sales people were just not bothering to answer the questions about the buyers. They were far more interested in simply getting the contract signed so they could move on to the next one. Hey – can’t blame them – that’s the core of their business:- “it’s not a sale if the contract’s not signed and in the mail”. That’s where their commissions comes from - the settled sales contracts. Then someone came around to my desk and hit me with the “obvious stick”. Make filling in the data about the buyer part of the contract process. No data – no commission.

Overnight we had compliance from the non-compliant sales force!

We captured a lot of information about our buyers, almost buyers and, where possible, our tyre kickers. We probably collected too much. The sales people didn’t sit the prospect down and stepped them through a long list of personal questions. Nothing could turn off a buyer quicker. However a lot was gleaned just by talking with the people as they were shown the estate.

By the time the buyer was ready to move forward to contract the sales person, if they were any good as a listener, knew all sorts of information about their buyer. The buyer has provided the information to the sales person so there is no data collection issues as long as your privacy policy is on your website.

We collected the usual demographics, family structure and ages, as well as their existing property and past property portfolios. The patterns for the advertising sources of walk-ins, phone-ins and email-ins. It helped with refining the advertising. Instead of wasting 50%, we probably only wasted 30% from then on. Not bad!

The real benefit however came when we launched the new estate. We had a great list of prospects to target without spending a cent on newspaper, radio, TV or magazine ads. We rang our buyers, almost buyers and tyre kickers from the previous project, talking about this new estate about to be released and they would have first bite of the cherry. We knew a lot about these people so we were able to talk to them almost as an old friend doing a favour letting them know about the emerging opportunity before the rest of the market. The prospects knew a lot about and trusted the company as well being experienced with the quality of the previous development product.

We followed up with emailing information about the estate including pictures, feature lists and plans. We closed 26% of available product from this effort alone as it generated an almost viral response with the people we called. They may have no longer been in the market but they knew people who did. As the sales grew so did our database. After this exercise we overlaid who was buying what and in subsequent developments we didn’t target families with three young kids when selling two bedroom units and made other similarly subtle like a sledgehammer refinements!

Software mechanics:

The mechanics of capturing this data is not hard to implement. I have heard of other developers in the industry doing it as well. However some have had technology challenges. They mostly revolve around the problems of distributing the entry of buyer data from many different sites. Often these sites don’t have much in the way of technological facilities or support and you certainly can’t have sales people going back to a head office each day to do a heap of data entry.

The master stroke in keeping the costs of building and deploying a database like this was to make it a web based database. That way any sales person with an internet connection and a laptop can enter their data – from absolutely anyway. Security was handled by ID’s & passwords with sales people only having access to the prospects they had entered.

Being web based there was no special software installations or help desk support required. It was as easy as filling in any form on the internet and we put the instruction right on the page. The data was stored and backed up centrally in Brisbane the instant the sales person pressed ‘save’. They could edit and update customer details as they gleaned more information from their prospects as the sales process progressed. But making the link back to the head office database a simple case of providing the internet on a laptop was the critical key to making this all work. If a sales person left for another company then we didn’t lose their data in the process.

Separate databases on everyone’s laptop or workstation which get their additions and updates uploaded every few days just doesn’t work. We built a web based database in less than a week for this first client and because there was no special software to be installed for sales people to use it, the entire sales force had it the next day. As we made changes, adding in new fields to capture, for example, these changes were quickly deployed to everyone at the same time as there was no ‘updates’ to install on everyone’s personal computer.

A few of the smarter sales people used the database as their note taker so when they did their follow up calls they had all the details of the prospect up on screen and could talk to the prospect while ‘remembering’ every little detail they had been told about them already. This assisted greatly with the high touch personal sales approach in these high prospect volume estates.

Once this web based database was built it was used in each subsequent project – no redevelopment costs and the data from previous prospects was right there. It didn’t matter if the sales person was in house or external, given a user id and password they could use all the system. It didn’t cost any extra to install 1 copy or 100 copies because it was web based – no special work station software and little or no training required.

In the end we got an early free kick for each new development for this client. It didn’t eliminate the need for advertising for the remaining properties to sell but it is felt that it reduced the advertising spend and certainly reduced the time frames involved.

Summary at a glance:

1. Don’t forget promotional success is 60% audience, 30% offer and only 10% creative.
2. Avoid scatter gun approach to audience selection in marketing campaign development.
3. Capture buyer, almost buyer and tyre kicker personal information to use for subsequent projects.
4. Make the data capture of personal information part of the commission payment requirements.
5. Use a web based database that is cheap and easy to deploy and requires minimal support for the entire sales force.

© Jacem Business Development Pty Ltd.

Author’s details: Wayne Moran is a director of Jacem Business Development Pty Ltd. Jacem assists development projects that may have gone off the rails. They assist in the turn around of development projects at various stages of their life cycle, reviewing and improving their marketing strategies and sales processes. Jacem can be contacted on 07 55 253 920. Wayne can be contacted directly on 0418 153 063.