Although the best way to achieve a high settlement percentage would be to engage a specialist entity, like KIN, there are several other ways that can help developers to achieve great results. We have had a look at our successes over the past few years and come up with some key learnings that should help your business achieve settlement success:
• Invest time in the valuation process. Whilst valuations are known to be a highly variable piece of the development puzzle, they are generally the most important (in terms of settlement, at least). We recently completed a project where valuations were undertaken in an area with no (that’s right, ZERO) comparable sales available to demonstrate the value of the product. The result? 75% of valuations at or within 10% of the purchase price. We have heard reports of similarly circumstanced projects faring far, far worse. The difference? A thorough strategy (we considered project timelines, level of completeness, stock release and how to best showcase each product type), intimate knowledge of the project (down to the finest of details) and an attentive team. This approach, plus a good set of comparables puts any project in good stead. On the comparables note, it also pays off to invest time and effort in a good valuation pack, including lot areas can be invaluable.
• Get a dream team. Set the bar high and only leave room for improvement. Implement an operation excellence type approach, bearing in mind that, often, you get what you pay for. Get the most out of your staff and consultants by educating them on why they need to go above and beyond and consider paying a little extra for that top-notch service. Most good quality consultants will not compromise output by reducing costs. Consider mandating some service standards, to help weed out the underperformers. Your dream team is not egotistical and will be motivated by exceeding customers’ expectations. Always remember though, setting the bar high with purchasers and then failing to deliver can be very damaging to your brand.
• Don’t underestimate the value of a settlement specialist. Unless you have a team of full time customer relations devotees, you should seriously consider appointing a settlement specialist, for a number of reasons: 1) purchasers are serial demanders of time and rightly so, considering their investment (if they don’t want constant TLC, they want your help securing finance and planning their move-in), 2) managing expectations during inspection and defecting processes is a fine art (knowing the Standards & Tolerances off by heart and being able to recite them with a positive spin are paramount, unique skills) and 3) even if you do have a dedicated full time team, chances are, they will still need help during site intensive project phases (i.e. valuations, pre-settlement inspections and key handover). Our recent studies indicate that settlement rates increase by about 35% when an external settlement specialist has direct communication with purchasers (you would be surprised by how far a bit of attention and positive reinforcement can go). Developers often factor the cost of a settlement specialist into their sales and marketing budget during feasibility. After all, as many a wise man once said, ‘a satisfied customer is your best source of advertisement’.
• Keep the updates flowing. Whether your project is ahead or behind schedule, you should always keep your purchasers updated. This allows purchasers the very important opportunity to reassess their situation, with time to change plans, if necessary. One of the most common misconceptions in the industry is purchaser preparedness after delayed settlement. Where there has been no communication about project delays, often, come settlement, finance approval will have expired and purchasers will be disengaged, resulting in settlement delays. Honest communication is a wonderful weapon. It shows integrity and accountability, resulting in timely settlements and repeat purchasers.
• Be open to feedback and change. If you’re looking for zero defects come purchaser inspections, think about adding an extra one or two rounds of developer defecting and rely on your settlement specialist’s expertise when it comes to gauging purchaser sentiment and scheduling. Better yet, during the tender process, consider specifying additional inspections or setting a benchmark standard number of defects tolerable to ensure your product presents A+. This one relates back to the point about getting a dream team. If you can’t get this one across the line with your construction team you may wish to consider reassessing. Think about it this way, if dents and scratches on a new car (worth not even one-tenth of a new apartment) is not OK, how could it possibly be OK for our off-the-plan apartments to present with defects. The quality of your delivery process will directly relate to your customer satisfaction levels.
• Don’t underestimate the value of a good development and project management team. Not only will this help to prevent construction delays and cost blowouts, but the flow on effect is a well finished, good quality product, more likely to encourage repeat purchasers. Ensure your development and project management teams (often the captains of the dream team) have the resources and time to keep on top of your project. It is paramount to have someone keeping everyone else accountable.
If you think you could benefit from a settlement specialist, contact KIN through this link.