Working out of this real estate downturn

The traditional way would be to get together realtors and developers, hopefully the tourism board participating, and create a marketing plan involving public relations and advertising, perhaps attend a few conventions and have a booth and tell people how wonderful it all is done here. But I don’t think the traditional way works as well anymore.

With the advent of the Internet and social networking, the consumer has been put in the forefront and in the driver’s seat. You can’t pull the wool over their eyes or fake your way through it – they will find out and they will tell their friends – virally. I can just see it, rolling out with a $200,000 USD campaign and then a development goes down, like the Trump Tower project did up near the border, and its all across all forms of media. $200,000 down the drain.

I think we need another approach, because we aren’t out of this yet. Everyone has been effected by this slowdown, some more than others. And the one’s that have been hurt the most, will have problems recovering and will mean a difficult road for those who have invested with them, unfortunately we will be hearing more about them in the news and on the blogs, than the one’s that are doing just fine and are taking care of the buyers and investors.

There’s a new mantra out there going round and being used by the media consultants and it goes something like this: “The complaint department is the new press release” or “The complaint department is the new marketing strategy”. Both are saying that if you just take care of your customers really well, the word will get out there, through websites, blogs, Facebook, Twitter and other social networking means.

So here’s my proposal.

Instead of an expensive campaign, why don’t we concentrate on giving assistance to existing developments to ensure they come out of this downturn okay. Here’s some ideas:

1. Find the developments (Developments A) that are 80%-90% sold out and who just want to finish the project off, as it has been dragging on, and link them up with developments who haven’t broken ground yet, (Developments B) or just started but have taken deposits, and make a deal to move the buyers (if they are comparable, more or less), to the nearly sold out project. This helps Developments A complete the project, for Development B to put the project on hold and get out of their commitments to build condos for clients, and it gets the client out a potentially bad, drawn out situation. Win, win, win.

2. Put together a council of experts that can meet with the developers, purchasers, investors and even the banks to help them put together a plan that will work best for all. Too often anger comes out and that doesn’t help the situation at all. In most cases, if the developer could move forward, he would be doing so. He wants to complete the project just as much as the people who have invested in it by buying a unit. Perhaps if there was mediator, (the council), this would help work out the problems they may face.

3. With every downturn there will be projects that just can’t continue. Often they are taken over by other investors or “vulture funds”. Well, perhaps we could help bring in potential investors to the project (but let’s call them “altruism funds”!) to help get the project up and going again, perhaps for some other type of usage, so we don’t have empty, unfinished, grey buildings, around the region.

4. Consider establishing a “mark of quality” or “seal of approval”, where the council has a list of requirements/standards that they feel every developer should be doing. Those that fulfill the requirements get to use the mark or seal and would be promoted as such. Those that don’t, won’t. But they can work with the council to help them meet the requirements or standards.

How will this help with marketing?

Word will get around. People will talk about how real estate is done here, how problems are handled, how they were helped out when they were in a difficult situation. Word will spread through blogs and social networking. The complaint department WILL produce the best press releases, with the most impact.

It would be a lot of work. Sometimes buying an ad or issuing a press release is a lot easier. But moving forward, the most impact and the ability to track tangible results are going to come from how well we run our complaint departments.

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