Monthly archives "April 2015"

Customer Relationship Management (CRM) – Rising Importance in Real Estate

In view of the rapid advancements in the real estate domain, with regard to increasing numbers of developers, customers, projects, locations, trends & practices, the secret to building long term equity for a brand rests in creating a competitive advantage through value-added and differentiated service of the customer. Strategic tools such as customer relationship management (CRM) play an important role in fulfillment of such an objective.

With the entry of renowned names in realty sector and increasing FDI, the competition is becoming stiff. The rising spending power of the working population, demand for premium & luxury housing, heavy NRI investments in Indian realty market, and the rising importance of the ‘Service’ aspect is making the real estate developers go for high standards of professionalism.

Relationship management is a customer-oriented feature with service response based on customer input, one-to-one solutions to customers’ requirements, direct online communications with customer and customer service centers. This function can also deliver sales effectiveness such as sales promotion analysis, automate tracking of a client’s account history for repeat sales, and also сo-ordinate sales-marketing-call centers-retail outlets in order to realize the salesforce automation. It can also track and measure marketing campaigns over multiple networks. These systems can track customer analysis by customer clicks and sales.

Across functions, it uses technology to make “up-to-the-second” customer data available. It applies data warehouse technology in order to aggregate transaction information, to merge the information with CRM products, and to provide KPI (key performance indicators).

In the world of real estate, every project is unique in terms of location, project features, pricing, post sales services and other offerings. With every developer managing a number of projects, the main challenge is to identify the target segment through data from primary and secondary sources, manage lead generation campaigns for different projects effectively, analyze the leads scientifically, find cross-selling (offering customers complimentary products based on their previous purchases) and up-selling (offering customers, premium products in the same category) opportunities and sustained follow-up efforts that convert the footfalls into business. Also based on analysis of past sales success and various metrics related to it, it becomes easier to define strategies for the future. The facility to create a variety of reports and dashboards with critical sales data becomes the basis for effective decision making.

It thus helps in improving segmentation scalability for targeting millions of prospects. This also helps in enhancing marketing productivity, increasing conversion rates and reduces campaign execution costs.

From a buyer viewpoint, property related decisions whether buying or leasing are capital-intensive and involve a number of interactions with the developers before finalizing. Keeping a record of all these interactions and analyzing the outcome of each interaction and taking appropriate action to facilitate the lead-to-customer conversion is a vital element of CRM principles.

CRM enables a holistic, disciplined approach to planning and budgeting. With world-class CRM it is possible to create a marketing calendar integrated with the financials, providing a centralized view to manage and schedule all relevant enterprise marketing plans and campaigns.

In a typical real estate sales lifecycle, the real estate company has to communicate with the customer on numerous occasions such as milestone completion, demand letters for payment, maintenance related communications etc. Any errors/redundancy here can cause a serious damage to customer relationships. With CRM systems, it is possible to configure and trigger automated communications through email/mobile messages, based on transactions taking place in the customer/prospect account. An example would be to send out birthday greetings, wishing on special memorable occasions and so on. For an existing customer, this could also mean sending out updates on new properties coming up, sending out referral scheme details etc.

CRM is imperative in today’s business and consumer context, especially in the real estate industry. For companies which adopt it on a holistic scale, it spells the strong possibility of building strong and enduring customer relationships, thereby reflecting shine on brand value metrics.

Green Buildings & India’s potential for Green Structure

Today, buildings account for almost 50% of the world’s energy, one-sixth of fresh water and one-third of greenhouse emissions. The energy drain is due to the dependence on conventional energy sources for power, coupled with lack of efficient energy utilization.

There is however a positive change being witnessed across societies. Green Building, which makes use of such design and construction features that offer intelligent choices in the use of water, power and recycled material, is the new paradigm in real estate. In the Indian context, as the number of environmentally-committed consumers and companies is growing fast, the real estate sector is also witnessing a sweeping change. What is pushing this trend further is the increasing awareness and concern about the impact of buildings on human health, environment and the economy. Even if half of the existing consumption is saved by efficient building architecture-design and use of green technologies, the resultant benefit on both the operating costs of businesses and the environment will be enormous.

A certified green office complex can assure a 25-50% saving on energy consumption costs, up to 40% reduction in water usage, produces 70% less solid waste and emits 35% less greenhouse gases. A green complex will also recycle water, switch off all electrical appliances when not in use, recycle waste, save and also generate energy, resulting in further bottom line savings. Studies around the world show a pattern of green buildings being able to more easily attract tenants and to command higher rents and sale prices. As green homes are evaluated for a 10-20% premium on rental costs than conventionally built homes, they are also able to hold their price over the long run. A study conducted on life cycle costing on GRIHA rated green buildings in India concluded that “Green buildings are a boon to investors, yielding high returns as compared to investments in conventional buildings or other investments, in a shorter duration’’. The results suggest that an otherwise identical commercial building with an Energy-Star certification will rent for about 3% more per sq. ft.; the difference in effective rent is estimated to be about 6%. The increment to the selling price may be as much as 16%.

The “greening” initiatives of India’s building and construction industry received a boost recently when the country was ranked #3 among a list of the top 10 countries in the world by the US Green Building Council (USGBC) for LEED outside of the US. From a modest beginning of 20,000 sq. ft. in 2001, the country now boasts of 1 billion sq. ft. of green building area. India’s total built-up space of 25 billion sq. ft. is expected to increase to 80 billion sq. ft. by 2030. The share of green buildings in this construction boom could be as high as 20%. The Govt.’s ambitious plan of developing 100 smart cities will also provide the much-needed impetus to scale up the green index.

At the same time, demand for high quality, energy efficient, commercial office and retail spaces by multinationals, IT-ITES sector, health care and services industry, will spur the growth of green projects across India. Improving energy efficiency standards like the Energy Conservation Building Code, stricter government regulations and environmental policies will also create the necessary momentum and ground for the green building movement to prosper. Other incentives such as providing additional floor space, granting transferable development rights, fast tracking approvals and interest subvention can go a long way to promote green buildings.

To meet the anticipated demand for ‘’Green’’ projects, a comprehensive training framework needs to be put in place to nurture a core group of green building professionals with the well laid down target of producing green certified structures. There is also the challenge of ensuring the flow of adequate investments into green building practices and projects. A push on the policy front with tax incentives could bolster the trend, as it has in countries like the UK, the US, Japan, France, South Korea and China. For instance, framing policies that lower the tax component on all aspects of green building construction (design, material, solar or wind and other renewable energy sources plants, rain-water harvesting plants etc.) will surely give an impetus to development of more green projects and green investments in the real estate industry.