Word-of-mouth mantra for homogeneous habitations

Ravi Sinha

The law of the land would not allow any community ghetto, and even unofficially a housing project meant for one specific socio-cultural group is a rarity in India.

Indian realty still aspires to create artificial neighbourhoods and the buyers are not complaining either in a world full of anonymous neighbours. It is not uncommon to see one particular community or professionals being in majority in an apartment block in any of the metro cities of India. The key factor that makes the potential like-minded buyers to flock to one given project to create this artificial neighbourhood is word-of-mouth publicity. It is hence the most powerful marketing tool for the developers today.

Business saver

However, this artificial creation of a neighbourhood in the same building is today more than a social need. It is, in fact, a business saviour for the Indian real estate. The developers are leaving no stone unturned to make sure that they create a social profile of their project to make it attractive for buyers with a common profile.

However, more than the amenities and creating an ambience for a specific social profile to attract what is high on the wish list of the real estate developers is ‘word-of-mouth’. It is only this mode of viral publicity of the project that brings to the project not only the like-minded buyers, but also helps to sell the inventory in a market where slow sales is a reality and trust deficit is very high among homebuyers.

Best calling card

AS Sivaramakrishnan, Head-Residential Services, CBRE, South Asia points out that word-of-mouth is, in fact, the best calling card of a developer in an unorganised business like the real estate. But the catch is that it has to be handled well as it can also be a game spoiler for a developer. As a general practice he thinks today around 30 per cent sales happen through the referrals and hence the marketing budget must be taking into account the ways to please the existing buyers.

“As far as the question of word-of-mouth having impact in selective segment of real estate is concerned, I feel it is how you look at the goodwill factor. The evaluation of this marketing methodology is very important. It is often direct recommendation of the existing homebuyers in the affordable and mid-segment housing. But in the case of ultra-luxury and premium branded housing what works as a magnet is the developers’ flashing the name of a celebrity who has already booked in the project. That is the defining moment of goodwill for a prospective buyer in the top end of property,” says Sivaramakrishnan.

A friend’s endorsement goes a long way. “They are going to believe their friends before they believe the broker,” says a Gurgaon-based broker. “If their friend tells them it is a great building, they are going to believe it.” According to brokers and property managers, the practice is more common in newer buildings, which may have several units available at once. In due course, some buildings develop a reputation for their fraternal atmosphere as well. “It is like everybody knows everybody there,” says the broker.

Social media angle

Vineet Relia, MD of SARE Homes, tries to redefine the very concept of word-of-mouth when he says that given the technology enablement and increased number of people being tech savvy, social media has now become the new ‘word-of-mouth’. According to him, in a bid to ramp up sales, developers are now going a step forward to differentiate them and woo the buyers with various means of social media. Due to its wider reach, developers now have to be doubly careful that their offerings, services or communiqués do not attract negative publicity over the social media.

“To overcome the constraints of negative branding, professional developers ensure they adhere to certain best practices such as transparency in all dealings, delivering on commitments put down in the builder-buyer agreement and ascertaining that units are delivered as per pre-determined delivery timelines. Over the past few years there is a steady shift in the population of online users, buyers and influencers. As the consumers have already gone digital, they are more aware about the brands and know what exactly they want,” says Relia.

Nikhil Hawelia, Managing Director of Hawelia Group points out that the sector is operating in an eco system where word-of-mouth is needed at each and every level. “It is a game of addressing the consumer sentiments. You just can’t afford to manipulate it. So, the message for the developers is loud and clear — spend more on addressing the concerns of the exisitng homebuyers than spending here and there to attract new customers,” says Hawelia.

Of course, the market realities indicate that word -of-mouth is a powerful tool of marketing, but it mostly works in the mid-segment housing projects. In case of high-end and luxury projects, people tend to be non-committal to spread the word either due to the sheer size of the investment or due to the mindset of having an exclusive address.

A double-edged sword

However, word-of-mouth publicity is a double edged sword and a bad project does have a negative word- of-mouth publicity as well. In fact, that works more strongly and can be lethal. Moreover, the kind of dissatisfaction that an average homebuyer has today, it often sounds like clichéd to have homebuyers as referrals for the developers.

Matching social profiles

The developers often look for market research nowadays to find out what can be done to have housing projects as magnet for identical social profiles to invest. Entry of right TG in the initial phase of a project does attract matching gentry.

Again, today social profiles segment act on word-of-mouth. Be it a social gathering, event or function there is a set that always moves together. These always connect at small social gatherings which has a marketing flavour to it.

Over the last few years, the realty sector has been through a roller-coaster phase as there was a gap and trust deficit in the relationship between the developer and the buyer.

However, developers now understand the need for continual innovation and being connected with the consumers so that the word-of-mouth factors plays in their favour.

— The writer is CEO, Track2Realty