First in, best dressed sales diminishes profit potential in off the plan real estate – in a big way
It’s no secret that a ‘first in, best dressed’ sales approach is the most widely adopted across off the plan projects, and that many Property Developers and Agents revel in the ensuing media attention drawn from long buyer queues and campouts. However, what they may not be aware of is that despite a sell-out release, a first-in sales approach is actually profit inhibiting.
We’re not talking nickels and dimes here either.
Taking a digital and equitable approach can mean the difference in millions of dollars profit – with no extra work.
Raise your hand if you like the sound of that!
We’re splitting the difference between a first in, best dressed approach and, well, the Release.Me alternative.
Inability to capture total buyer market
A first in, best dressed project release, whether it’s at the sales office or by email registration, limits the number of customers available to show up, let alone participate. Perhaps they are not able to travel that Saturday to the sales office because they have their kids debut soccer game or maybe family is in town, or in an online approach, they hit refresh ten times at 9 am on the dot on their browser and meeting registrations are already oversubscribed.
Whatever the situation, in a first in, best dressed approach interested customers are excluded from participating in a release, which ultimately limits the developers understanding of total interest. You may have 100 people turn out at the sales office for 20 available properties, but 50 more couldn’t make it on the day.
Consider this, your customers may have more than one preference when it comes to property, they may be flexible on size, frontage, or features, and by only capturing the single preference of the lucky ‘first-in’ buyer, you miss out on understanding the depth of buyer demand across both successful buyers and the long list of disheartened customers who either couldn’t make it, or weren’t close enough to the front of the queue.
Let’s take a look at the numbers
Setting the scene … you have a series of planned staged land releases at a flagship masterplanned community in a region that has been hot for a while now and you know that demand will outstrip supply…
You have your first release planned for this Saturday comprising of 20 lots. You believe that Buyers will be most interest in medium sized lots ranging from 400-550 sqm, so in your upcoming release you have a lot mix of;
- 10 x medium lots ranging from 400-550 sqm – This is what you believe is the sweet spot
- 7 x Smaller lots <400 sqm – Because, let’s face it, people don’t have much spare cash these days, so you’ll be more likely to sell out of the affordable stock
- And 3 x larger lots 550 sqm and above – It’s a large estate and you don’t think a higher price point will appeal to the off the plan buyer, so fewer is safer
The queues line up at 9am at the sales office and all 20 lots sell to the first 20 buyers in the queue. Congratulations your lot mix was successful, and your revenue target was achieved.
You’ve got a similar lot mix penned in for Release #2, no changes to pricing necessary as it hit the mark the first-time round, so you can basically lock in your revenue pipeline for that too.
Sounds like it was a successful release, right?
What about the 200 other interested customers though? Don’t their preferences matter in this strategy?
Let’s look at a different approach
Releasing with Release.Me
You have the same lot mix planned for Release #1 but instead of a first-in approach, you use Release.Me and enable all 220 interested buyers to participate in the release online and from the comfort of their home.
Each interested buyer submits up to 10 preferences and the Release.Me platform allocates properties buyers based on preferences, fairly and equitably. Every buyer has an equal chance of securing an allocation. More on that here
Of course, based on the laws of supply and demand, you will only sell 20 lots to 20 buyers, but you will also gain the preferences of 200 more customers who will likely be vying for a property in your next release, and the one after that.
From this preferences data you might see, for example, that:
- 80% of customers had 1st and 2nd preferences against large lots that are 550sqm and above
- Or, that really only 20% of customers had medium sized lots as a preference
- You may find that the single most popular lot by preference was a large corner-facing lot, and
- That the least popular lot was a medium sized, west-facing block
- You may find that the smaller lots had very few 1st preferences and the interest they did have was made up of 3rd, 4th or greater preferences
You may find that the lot mix you delivered, although a sell-out, perhaps didn’t reflect true market demand.
How this preference data delivers profits and more
If you take the preference data gleaned during Release #1, you have a complete picture of true and up-to-the-minute buyer demand. With this data you can do many things, and here we list just four suggestions to immediately improve performance and maximise profit;
Revise pricing schedule to drastically boost profits
You’ve just closed Release #1 and Release #2 is scheduled for next month, while you may not be able to adjust your lot mix in this timeframe, knowing that larger blocks and corner blocks were most popular – you can now revise your pricing schedule to reflect the market interest and immediately send profit skyrocketing in Release #2 – with no extra work.
Using Release.Me could be the difference in millions of dollars of lost profit over the course of a handful of releases
Re-evaluate your property mix strategy
You’ve got current data to reflect the depths of your customers’ demands, now it’s time to create a supply funnel to meet that demand and avoid lagging stock later down the track.
Cure Sales Drop Off
Mr and Mrs Smith placed preferences against Lots 1001, 1010, 1014 and 1019 during the release – these lots were a mix of large, corner and park-facing lots. Unfortunately, Mr and Mrs Smith were not successful in being allocated a property, and Lot 1001 was sold to someone else during the release. But, when it came to contract signing, that someone else got cold feet (sound familiar?) – well never mind about going back to market, sending out an EDM or wasting hours cold calling your customer database to re-sell lot 1001. Just call Mr and Mrs. Smith and surprise them with the great news.
Nurture Your Customers
Taking their preferences, you can put Mr and Mrs Smith, as well as all the other release participants, in a targeted sales funnel based on their specific preferences. Ensuring that no matter the market conditions, you will not only have a property mix catered to your buyers’ specific demands, but you have the data to nurture and target buyers based on exact preferences. Not only does this mean you can sell more and sell faster – but it also improves the customer experience too. It’s a win-win really.
The bottom line? Start using Release.Me and stop haemorrhaging unrealised profits.
How it works
For Sellers, Release.Me manages the release of new stock to the market. Release.Me handles buyer registrations and preferences, allocation of property, collection of particulars of sale, bookings for contract signing, payment of holding deposits, and all the communication in between. While Buyers enjoy a fair and convenient sales process from the comfort of their couch, Sellers can sit back and watch all the activity on a real-time Seller dashboard.
Book a demo to see just how simple it is.