Customer loyalty has long been a topic of discussion.
We have all seen countless statistics and read numerous reports about the financial benefits of increasing retention rates, spend, and the frequency of visits. Beyond just statistics, companies have shown that loyalty can be a powerful business strategy that drives top line and bottom line growth.
The conversation around loyalty has been all but absent from the world of real estate. Developers and home builders know that a person buys a home at most five times in their lifetime, so the industry has not seriously considered the aspect of loyalty. And while this fact is true, people do tend to buy 3-5 homes in their lifetime, these same residents spend around a quarter of their income on necessities such as food, gas, and home maintenance within the community where they live.
This presents an opportunity for master planned community (MPC) developers to utilize resident loyalty and begin to capitalize on this resident spend within their community.
So how do real estate developers go about capturing this value?
It all begins with a change of mindset. Today, most MPC developers look at a resident moving into their community as the last step in the journey. Instead, developers should see the purchase of a home within their community as the first step in the resident journey. The subsequent steps of living and working within a community hold just as much value for the developer as the sale of the lot and the construction of the home.
Unlike many other companies and brands, MPCs are well positioned to take advantage of loyalty since the residents within the community provide a captive audience for such a program. These individuals have already chosen to be part of a particular master planned community meaning they have a certain level of buy in to the vision of the community. This would make most of the residents good candidates for joining and participating within such a program.
Finally, MPCs already spend a lot of money and effort on building relevant amenities and creating resident engagement programs. While there is little doubt that these points of engagement increase resident satisfaction within these communities, there is no mechanism to capture the value created. This is where technology comes in. Developers can leverage technology to capture information from the resident and to use that information to encourage certain behaviors and reward others. This can increase resident engagement and more critically begin to capture the value that most developers have been leaving on the table for a long time.
Customer loyalty has remained a powerful business strategy for good reason. Companies that have harnessed the power of loyalty have been able to generate impressive business results. The concept of resident loyalty specifically within master planned communities, presents a new way to think about these residential developments and allows developers to capture ongoing value in the short term.