Same Basics, Different Dynamics
The branding basics applicable to the real estate business are no different from branding in any other sector. The principles are the same, even if the applications are more specific and following the special dynamics of the business.
In fast growing markets for the real estate segment, like the New York Real Estate, most companies would focus first on the operational and commercial side of the business; in other words how to build good projects, sell, deliver on time, and build new ones. With the development of the market, a small number of companies have started putting more focus on branding after they have discovered the economic power of a strong brand. These companies are now aligning their whole operations worldwide behind their brands and already reaping the benefits.
At the same time, some other companies are still dealing with this sector in a commoditized mindset. Build, build, build; then sell, sell, sell. A basic corporate identity and few millions in communication would make them feel happy.
We will try to understand the dynamic of this segment and suggest adapted methodologies for real estate branding. Starting by the basic concept of branding, it all boils down to that relationship at a human level between the brand and customers. It is about that trust, connection and affinity that the brand can establish and grow among customers and the general public in a certain markets. How to establish this connection, grow it and sustain it through time and geographies is all about the rules of good branding strategies.
The Creation of Value
The principle of “value creation” for customers and consumers is widely understood in the business and branding arena; however, the applications of this basic principle in a category like real-estate are quite complex.
Creating value starts with adding value to people’s life whether by offering them a better home, a better community, better facilities, a better investment, or simply a better business opportunity. When this value is created, delivered and perceived well by hundreds and thousands of customers, it will be transformed into an economic value linked directly to the brand equity or “good will” that this brand can create. In real estate, this notion of “value creation” is practically linking the cumulative positive performance of a company to the creation of a certain brand equity that will have immediate influence on the business and its success with future projects or joint-ventures.
To be more specific, we can say that value creation in real estate is a process that is a function of time, the number of projects, customer satisfaction, successes and also failures. While continuous successes and growing satisfaction will make brand value grow exponentially; one single failure could be detrimental to the build-up of brand value and can hinder the whole process. One key advice here is to be brand focused and transparent; if the focus on the brand will help building the value and spreading it across projects and markets, transparency will buy the company some forgiveness if anything went out of control in any project or operation.
The interesting part of this principle of value creation is its mutuality. Like any positive relationship, it is beneficial and constructive for all parties. The brand, the real estate master brand in this case, will be offering customers a better lifestyle and higher standard and in return they will express their satisfaction and attachment to the brand and even recommend it to others. In this scenario more value is created at both sides of the equation. If the brand manages to develop and sell a number of successful and life improving projects to its customers the created value will be cumulating, growing and moving from one project to another and demonstrating the brand power in financial markets.
The Transfer of Value
Real estate brands that have managed to create value through a number of successful and sometimes iconic projects would benefit from a good reputation, equity and image in the market. This positive value is subject to growth and even to “transfer” to new projects that the brand is developing or even new markets where the brand is expanding. Projects do not have to be of the same nature or even in the same country. The positive experience that people have had with the brand in the past could be expected from new projects provided that a good marketing and communication job is supporting the brand and its activities.
Marketing and communication role is very important in this process, especially in highlighting the endorsement role that the Master brand is bringing to new projects. The core brand promise, values and personality should be clearly pronounced in all these projects. The immediate results of “value transfer” will be noticed when the new projects from this same brand will start reaping substantial acceptance and “good will” in a relatively very short time. The successes and credentials of the master brand will start travelling around the market and offer new experiences to new customers and different target groups.
The Value Transfer process is a two way alley. First, the project takes all what it can in terms of “good will” and “expectations” from the Master Brand. But once the project is developed and sold and experienced by new people; the customers’ satisfaction and Project Brand value will pay back and add value to the Master Brand in a snow bowling effect. This phenomenon will keep developing as long as the brand is keeping its promises and delivering value every time and in every project or development.
This will lead us to another important observation about real estate branding – the need for a Strong and Attractive Master Brand – Businesses that are planning to be the real estate development for a long period of time should always build a strong master brand and not only projects. The master brand is where the value resides and travels once projects are finished and sold out. The gain in equity and value every time we have a successful project will feed the image of the project and the image of the master brand simultaneously. However, the equity of the project itself stays in the project and contributes to its value on secondary markets, while the value that goes to the master brand could be transferred and injected in new projects.
Since the brand value is cumulated by the success of its projects and decreased by project failures and customers dissatisfaction; it is better on the long run to only concentrate on well planned and executed projects to optimize the chances of success and avoid the negative experiences that can drain the brand value.
Moreover, a brand that manages to transfer value from one project to another is a brand that can make substantial savings on marketing investments.
The “Necklace” of Projects
The dynamics of brand value creation and transfer in the real estate business could be compared to a “necklace”. A combination of jewelry, pearls or precious stones linked together with common thread to form a valuable piece. Each element or stone add to the value of the necklace but at the same time gets more value for being part of the same necklace with other valuable and attractive elements and pieces. The different elements need to keep a high level of harmony and fit between each other in order to be in the same necklace. This will drive the overall value of the necklace and make more than just the sum of the individual elements’ value.
The Right Dose of Branding
Branding and commodities goes in two opposite directions. As long as real estate companies are thinking in terms of “projects” and “developments” the real estate branding process cannot reach its full potential in terms of value creation. Therefore, when companies realize that they are not only building apartments, villas, houses, offices, malls and recreational centers but “communities” and “lifestyle” in general, the shift in thinking and in business will start happening.
An idea like “community concept” will give a bigger role to the relationship between the brand and customers. This will project the brand role and relationship through time and make the creation and transfer of value a lifetime process. Real estate companies that are selling houses and apartments are selling bricks and mortar, while those who are marketing lifestyle are actually building connection and value.
On the other hand, too much branding will go back to square zero and give a similar effect to commoditized sectors and markets. Developers should avoid going to the extreme where every single building or precinct is branded. Too much branding is like no branding – As people and customers will not remember all these individual brands and will not be able to have meaningful relationships or even perceptions about a growing number of projects and developments.
Then, where to draw the line?
Besides the Master Brand that is the centerpiece of corporate strategy that we believe it is a necessity to have in real estate business; we recommend serious branding effort for three additional types of developments: Destinations, Communities and Icons. Everything else should be part of a bigger brand that could be one of the above mentioned categories; otherwise, it will be very difficult to make it stand alone as a distinguished and different brand. Moreover, marketing investments behind these small projects will not have real branding effects besides supporting sales at a specific time.
The 5 Rules
1 – Always build a master brand not only project brands.
2 – Make sure that all projects are successful in their own areas and for their specific target groups – so the master brand value will keep growing.
3 – Treat your portfolio of projects as a necklace – good value and good fit with a common thread that assure the exchange of value and image perception.
4 – Avoid over-branding by keeping branding efforts to key developments which have the potential to become lifetime brands i.e. Destinations, Communities and Icons – Smaller developments would fall under these 3 groups, possibly as a sub-brand.
5 – Start building your brand during the time of abundance and favorable market conditions; it will come very handy if the recession arrives to your market – In worst case scenario, it is a good ticket to cut through the competitive clutter.
If we look at what “Real Estate” companies are offering and try to find that core thing that customers of all types are looking for among all these offerings of “community life”, “all-in-one place”, “waterfront living”, “themed communities”, “good investment”, “branded developments”, the tallest, the biggest, the first, the everything…
All these claims and unique propositions will help real estate projects and companies and eventually appeal to customers with different needs and mindsets. But behind all these propositions we can find one Core Promise that real estate brands should be offering, it is the promise of a “better life” – If you want to build a brand in real estate, never break that promise.
David Ramos is a brand strategist living and working in NewYork. Questions and comments could be sent to firstname.lastname@example.org.