I recently lead a round table discussion on viral marketing strategies and that brought to mind two recent, seemingly unorthodox real estate marketing tactics – ‘Buy One (House) Get One Free’ and ‘Up For Auction’… one more viral than the other, both likely promoted through traditional PR channels.
In San Diego, Michael Crews Development is offering to give away a row home valued at $400,000, if the buyer purchases one of their luxury estate homes, in nearby Escondido. "We thought, 'Why… (do these sorts of promotions)… just have to be on Pop Tarts and restaurants? Why not buy one home, get one free,'" Dawn Berry of Michael Crews Development told 10 News in San Diego.
Hmm…I immediately questioned the quality of the row home construction and the location. Why would a developer opt to market their luxury homes the same way they would market Pop Tarts? After scouring the web a bit, though, I was intrigued by the viral status the promotion had acquired.
A quick glance at some of the major new outlets – Reuters, Yahoo News, The Street, US News, MSNBC, and The Wall Street Journal Online – revealed that nearly every major news outlet had picked up the story of the developer’s wacky marketing ploy. Additionally, independent stories started to show up in my Google searches, as well as links to YouTube videos. Finally, bloggers – including this one – are commenting on the strategy and seeing it is a ‘sign of the times’ (or zeitgeist, if you will…)
To date, I believe only ONE individual has made an offer on a Royal View estate home, but the exposure has been impressive. I wouldn’t be surprised if Michael Crews Development seeks to extend the offer beyond the original May 31st deadline. So, the ‘Buy One (House) Get One’ approach is not yet a case study in successful marketing strategy, but it certainly got a lot of publicity and achieved viral status. And, when the Southern California real estate market picks up again, the strategy may just achieve its original goal of closing more sales.
Locally, Westrum Development, in an attempt to gain traction for their stalled ‘Hilltop at Falls Ridge’ development in East Falls, Philadelphia, opted to auction their remaining 11 Phase I units. Many saw the ploy as a risky strategy or a sad commentary on market conditions. However, all 11 units sold and – at least for now -- their lender has been silenced. And, although the auction, which is more common than ‘Buy One (House) Get One’ didn’t reach online viral status, there were a number of local threads and articles pertaining to the event. Good old-fashioned word-of-mouth also helped, contributing to the sizeable turnout at the auction. On to Phase II!
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4 comments:
The BOGO is pretty interesting - I'd be surprised that no one would take advantage of that unless the market is really falling fast there?
It is sad, but I think seeing new homes auctioned off is going to become more common as many builders are in bad positions since they can't move the inventory as fast as they used to.
I think the thing about the BOGO offer, though, is that it probably works best for investors. And there aren't many of those around anymore!
I sometimes read things like this and immediately have a thought along the lines of "you just don't get it" or "wake up idiot, there's something profound here and you can't see it". This time is no exception. But I'm going to take a chance.
Is a "buy one, get one free" for houses dumb? Maybe not. The log says ..home "valued at" 400k. What does "valued at" mean? Would have sold for this amount in a hot market, might sell for this in 2 years, cost this much to build?
Might it not be a smart idea to own a house and use it while it appreciates, even if it takes 10 years? Why question the quality? Isn't it possible the builder was really trying to be creative and (maybe) just break even on a certain tract while doing better on another? Is it possibly a really good idea?
Ditto for Westrum. I think auction idea is clever. People that know I sell residences told me they were going to bid on these units. Did Westrum suffer? Not likely... the story is widely known, the condos sold, buyers are happy and so is Westrum.
Bottom line - seems like two very clever ideas to me. Not sure why one worked so much better!
I'm proud to leave comment #4, an all-time high at Sitegeist, for the "Unconventional selling strategies for unconventional times" blog submission.
I don't disagree with the comments, that quite possibly the sales tactics both developers pursued to rapidly move inventory, may in retrospect, be remarkably intelligent moves. And, the blog submission was purposely written in a more neutral tone. However, the submission was mostly responding to the perception conveyed in the traditional media and blogosphere, that the BOGO and auction tactics, were possibly desperate measures in the face of a rapidly weakening real estate market.
Westurm clearly achieved what they were seeking to achieve and the BOGO offer may eventually as well; gotta keep moving that inventory, 'til there is a bit more parity in the supply-demand curve.
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