Soar for More Marketing Case 2014

Presents

Soar For More

Marketing- Case Study - 2014

 Soar for More Marketing Case 2014
Preamble:

Monsoons had just arrived in Mumbai and as the dark clouds began to encompass the sky in the
evening, offices called it a day. Unabated by these rains, the construction of bustling high rises
which were determined to pierce through the skies, was ubiquitous. Sanjay Sarkar, the Head of
Marketing at Lodha Group, was looking at the skyline of this city through his glass chambers
with a sense of pride that the tallest and the grandest of them for many years to come will be
The World Towers, worlds tallest residential building with Armani designed residences. Lodha
Group was widely acclaimed for delivering the finest projects, and for those who have had a
remarkable experience from buying a Lodha property, the choice for buying a second residence
was markedly another Lodha property.

At this thought, Sanjay was pondering over the annual numbers and it occurred to him that so
far 14% of the entire groups revenue in 2014 was from Loyalty and Referral bookings, which
were sparked by a loyalty program that was earlier unheard of in real estate industry. Loyalty
program rewards repeat purchases and referral bookings in kind, ranging from a fully
sponsored trip to the Milan Fashion Week with front row seating to an exclusive A R Rahman
concert. The programs objective is also to drive more loyalty and referral bookings from the
existing customers which are done through various customer engagements.

On further exploring the two segments into which Lodhas projects were categorized into, viz.
Mid-income & Hi-End, it came to Sanjays notice that revenue from loyalty & referral bookings in
Mid-income segment projects was 21% of total revenue in the that segment, whereas it was
only 10% in Hi-End segment. It was evident that Hi-End segment had the capacity to drive
higher numbers and immediate focus should be on the same.

Lodha Preferati the loyalty program for Hi-End segment was launched in 2009 and Club CASA
for mid-income segment was launched in 2008.

Below is a trend of loyalty & referral bookings over past 7 years for Hi-End segment:

Hi-End Data Trends

2008 2009 2010 2011 2012 2013 2014

Overall Revenue (Hi End) 475 1551 2376 2021 3772 7374 3827
Loyalty + Referral
Revenue 2 16 93 90 271 577 410
% Contribution to
Overall 0.42% 1.03% 3.91% 4.45% 7.18% 7.82% 10.71%

Loyalty and Referral Revenue Year wise split:

2008 2009 2010 2011 2012 2013 2014
Loyalty Revenue 0 0 1 2 25 129 190
Referral Revenue 2 16 92 88 246 448 220
 Soar for More Marketing Case 2014
Who are our Hi-End customers?

Our customers are HNIs/UHNIs and adults who are 35-55 year old mainly from a) Salaried class
who are corporate head honchos with designations such as CXO, Managing Director, EVP, AVP
and the likes and b) Business class who are either 1st generation entrepreneurs or 2nd and 3rd
generation business men.

These are the ones who have had a considerable global experience and seek a similar lifestyle
here. By investing in uber luxury properties, they want their investments to speak about the
success they have achieved in their lives. Exclusivity is also another attribute they seek. The
average ticket size is INR 8cr. and for majority of these customers, this purchase is not their first
home purchase.

About Lodha Preferati the Loyalty Program:

Lodha group has believed in Leadership through Innovation and has time and again set new
benchmarks for the real estate industry with series of firsts to its credit. As the group
continued to be at the frontiers of innovation, they decided to launch the real estate industry's
first ever Loyalty club.

The vision towards initiating this Loyalty program was:

To create a world class Loyalty program for its members with a strong element of
Membership Privileges
To deliver customer delight throughout the Customer life cycle and hence generate positive
word of mouth amongst members social circles

Lodha Preferati: Lodha Preferati, a privilege club, was launched on 9th October 2009 for the Hi-
End category projects. Lodha Preferati today has around 8500 families as its members.

Scope of work under the program is as follows:

1. Rewards for the loyalty and referral bookings:

During Promotion Period No Promotion Period

Loyalty Booking Fully sponsored trips, Premium Cars Monetary discount.
& Bikes, Jewellery etc. whose value
depends on the value of the flat. They
also had an option to opt for a
monetary discount.
Referral Booking Both the source and the reference are A catalogue of products across
rewarded premium electronics, bikes electronics, clothing, fashion
etc. Value depends on the value of the accessories, hotels etc. to choose
flat and is divided equally between from based on the points
source and reference. These rewards accumulated. Points are awarded
are twice the value one would receive basis the value of the flat.
when compared to No Promotion
Period.
90% of the bookings happen during the Promotion Period.
 Soar for More Marketing Case 2014
2. Engagements:

Majority of the engagements are done through events which would leave customers with a
unique experience.
a. Product Related Invite customers to unveiling of Show flats etc. References are also
generated during the same.
b. Purely Experiential A R Rahman concert, Master Chef sessions, Porche Unveiling, and
renowned Singers concerts to give the customers an exclusive and an awe-inspiring
experience.
c. Regular engagements Greeting and gifting on birthdays, anniversaries, festivals.

3. Communication:
Customers are inducted into the program at the point of sale in the sales site of respective
projects. Any further communication is done via phone calls, emails and direct mailers.

The Opportunity:

Sanjay believes that although there has been a YOY growth in the loyalty and referral
contribution, there lies a huge potential to grow the business in Hi-End further from 10% to
20% by 2015.
Such a movement can only be enabled though a paradigm shift in the existing program, making
it the best program not just within the industry, but across industries.

1. How would you revamp the existing program to cater to the needs of the HNIs and
UHNIs?
2. What innovative marketing mix would you adopt to maximize your reach and program
awareness?

Tip: Study the loyalty programs of luxury hotels, retail and credit card companies which cater to
the same category of customers as we do.