Property freebies. Gimmick
or marketing gold?
Swedish fashion tycoon and uber-luxury property developer, Michael Adam Alibhai, recently sold a 14,000sq ft mansion on Dubai’s Palm Jumeirah for around £25M.
It was the most expensive home sale in the city – and one of the most hotly anticipated.
This wasn’t your usual Million Dollar Listing extravagance. This was a fully furnished, fully art-curated, fully champagne-stocked, Ferrari-festooned force of nature. And in case you’re wondering, the Ferrari (599 GTO) shared the driveway with a Rolls Royce Wraith.
The champagne was Cristal and Dom Pérignon. And there was even a vodka bar dripping with ice-cold magnums of Stoli and Belvedere. It was all you could want – and more – from a home built on the tip of a manmade palm frond.
Are these freebies a gimmick?
Included: art worth £100,000s.
Absolutely…not a gimmick. Here’s why: Alibhai was foamingly passionate about this project. The house – and everything in it – represented six years’ worth of obsessive detailing, right down to the choice of bubbly. And people loved it.
Even if you think it’s perversely profligate, it’s hard to deny that there’s a growing hunger for readymade-no-gemstone-unturned luxury.
A hunger that falling oil prices, political unrest and an unstable government can’t seem to diminish.
There’s certainly a candid logic to this lock, stock and barrel offer, as Alibhai asserts, “The house is not missing anything, so why would it miss having cars? You literally just bring your suitcases, nothing else.”
Strong incentives can fuel a variety of needs
Bain’s Elements of Value reveal the deeper aspirations behind people’s purchasing decisions.
American psychologist and philosopher, Abraham H. Maslow, had it nailed. In the 1940s, he posited that each person has a hierarchy of needs – from basic sustenance to self-fulfilment. These needs have since been expanded upon and contemporised for a 21st Century consumer, which you can see in the Elements of Value above.
When most people look at the triangle, they assume you can’t achieve ‘Self-transcendence’ until you’ve satisfied all the emotional and functional needs below it. But this is an over-simplification. Or as Maslow would have said, “Baloney!” (We don’t know if he’d say that, but he was from Brooklyn, so we’re quietly confident).
There isn’t one set pathway to fulfilment. Take, for instance, the daredevils who don wingsuits, jump off cliffs and spiral through the air like broken kites.
They’re achieving ‘Self-actualisation’ while at the same time snubbing a raft of basic safety needs.
People’s objectives are different. For one person, ‘Makes money’ may be the ultimate pursuit. But for another, who’s actively chosen to live like a medieval hermit, it won’t resonate. Instead, they may cherish ‘Wellness’ and ‘Therapeutic value’.
The point is we all have varied and complex needs. The best incentives understand these diverse requirements and know how to connect with them, while the worst of their kind will attempt to sell a top-floor flat with a free yurt and tennis ball launcher.
Developers must create a meaningful point of difference
Park Crescent. Six of the homes showcased works by major artists.
Random incentives can be seen as a sign of desperation – a chance for prospective buyers to negotiate hard on price. Whereas specialist incentives, like free experience days at Silverstone and Le Mans, may only appeal to a small demographic and have a negligible impact on sales. That said, such a carrot could pique the media’s attention and secure a lot of free publicity. It’s a tricky balance. But when a developer gets it right, they appeal to their audience, fill column inches, bolster their brand and sell-sell-sell.
That’s what Amazon Property did when they marketed six apartments in the recently restored Park Crescent in Marylebone. In a postcode packed with beautiful real estate, they created a meaningful point of difference, or a decisive differentiator, if you will.
Six homes totalling £100M filled with £100M worth of serious art: Marc Chagall, Salvador Dali, Joan Miró, Andy Warhol, Damien Hirst, Grayson Perry – it’s a showstopping list.
Add to this a launch party bustling with Beckhams and Abu Dhabi royals, and you immediately grasp – and perhaps even hanker after – the exclusive lifestyle Park Crescent is offering the world. To further gild this golden strategy, there was the potential for purchasers to receive certain artworks as a moving-in present or secure a preferential price on the rarer pieces in the collection. At this level, Amazon Property’s meaningful point of difference is hard to beat.
What about regular incentives for regular people?
The lower end of the market is awash with superficially impressive incentives that just don’t add up. Yes, there are exceptions. But as low-to-mid range properties outnumber mansions, so too do the dubious deals on offer.
Consumer champion Which? has looked at lots of so-called freebies in this bracket and found most of them wanting. One development in East London is tempting buyers with price cuts up to £40K and a free annual travel card worth £1,168. But their three-bed apartments are around £150K more expensive than equivalent properties in the area. So even if you secure the maximum discount and get handed 100 free annual travel cards, you’ll only just break even.
Another development in Leicestershire is offering £10K worth of upgrades, including better flooring and a kitchen with integrated appliances (is there any other kind?). But these incentives are meaningless when each property in the development is already priced at the very top end of the local market.
These offers aren’t just gimmicky, they’re disingenuous and out of step with
To succeed, developers must give people what they need
Amazon beats the competition with products and services people need.
To illustrate this point, we want to look outside of property for a moment and turn our attention to Amazon (the e-commerce conglomerate, not the art-loving real estate developer).
This is a company that is constantly adding value to its core offering. Every time it launches a new product or service, it satisfies another need in the Elements of Value.
For instance, Amazon Prime ‘Reduces cost’ and ‘Saves time’.
Amazon Prime Video ‘Provides access’ and ‘Fun/entertainment’. And Amazon Photos offers customers unlimited photo storage, which ‘Reduces risk’ and ‘Reduces anxiety’.
They take the time to understand people’s changing needs, then find new ways to deliver. This is what developers must do if they’re to devise compelling incentives that pull in the crowds and sell property.
Freebies can’t do it alone
The best development launches build anticipation.
Global creative consultancy, Lippincott, famously states, “Appeal to customers’ reason and they’re yours for a day. Appeal to customers’ emotions and they’re yours for a lifetime.”
Discounts, cashbacks, free travel, free legal advice – these things appeal to our reason. They’re uninspired, unmemorable and sometimes they’re not even genuine. But meaningful incentives that enrich people’s experiences – these are rooted in emotion and have the power to cultivate lasting relationships.
Just look at smash-hit developments. Emotion is built into their marketing strategies.
They drive anticipation in the pre-purchase phase, tease buyers with what’s to come, then reveal a small part of something, like an exclusive service or ground-breaking amenity space. Once they’ve attracted their audience, they hold them captive with one-off events and irresistible, custom-made offers.
These unique offerings enhance their appeal. Units fly off the shelf. And the rest, as they say, goes down in history.
Header image: sourced from Luxurylaunches.
Image 1: sourced from Luxurylaunches.
Image 2: sourced from Media Bain.
Image 3: sourced from What House?
Image 4: sourced from Slash Gear.
Image 5: sourced from Designed by Woulfe.