How to sell out 110 Four Seasons Private Residences in Denver (without discounts) in the middle of the great recession.
It is 3:00 p.m. on yet another sunny May afternoon in Colorado’s mile high city. Chris Norton is walking the perfectly finished hardwood floor of a 3,500 square feet apartment some thirty floors up in the Four Seasons Private Residences Denver. The view from this lofty and pricy overlook is quite spectacular. It includes mountains, the full complement of Denver’s many sports stadiums and arenas, and—if one could see with the finest detail through trees, buildings, overpasses and neighborhood hedges—a very large number of “FOR SALE” signs and foreclosure placards. It is 2010 and property sales in Denver, like the rest of the country, are in the toilet.
Yet here is Chris, real estate marketing specialist, on his way to selling another multi-million-dollar condominium at full price carrying with it, a near $100,000 annual strata fee.
Until Mr. Norton came to town, not one single home priced at over $1,000,000 had sold in the Greater Denver Area since 2007. And apart from the Four Seasons Private Residences Denver, they still weren’t selling.
Chris is one of the world’s pre-eminent authorities on the NEO typology – a data-based form of consumer behavior prediction that identifies buyers who are far more likely to spend based on their personal character. On this day in 2010, Chris’s company, Fingerprint Solutions, has been tasked with selling the unsellable: 110 luxury “private residence” condominiums perched on the top twenty-two floors of Denver’s spanking new Four Seasons Hotel.
If one were to build some kind of depressing monument to the real estate crash that took place during the last years of this century’s first decade, that monument might come in the form of an idle and rusting construction crane. There was a time, not so long ago, when almost every city in America had their own example, or in many cases, dozens of examples of abandoned cranes sitting mournfully atop the open concrete and rusting rebar of an unfinished hotel—one that was to have been funded in part by the sale of luxury condominiums.
What made things even worse was the natural reaction among developers. Act on the assumption that buyers would respond to a deal and by dropping prices. This of course only made things worse. Potential buyers with smart money just put away their wallets and joined the game of “Watch the Price Drop.”
Yet by the end of 2012, Four Seasons Private Residences Denver was sold out. A full year ahead of schedule.
What happened? Chris, his sales team, and his advertising agency, Spring, came up with a strategy that traveled in the opposite direction of convention with a set of NEO-based “what ifs?” They went something like this.
1) What if we worked on the premise that Four Seasons Private Residences Denver (FSPRD) wasn’t exactly a sound financial investment but worth buying anyway? After all, nobody buys a boat as an investment. Why not let the fact that this is not a financial investment just hang right out there?
2) What if we looked at FSPRD as a NEO product? Four Seasons, with its incredibly strong values, its definitive level of service (for residents in particular), and its ability to create a bespoke lifestyle environment for owners gives it at least the potential to be a NEO product. In real estate, would it be possible to turn the tables and go for a product-before-price customer proposition?
3) What if we create a customer proposition that spoke to the concept of a life lived on one’s own terms with absolutely no complications or unwanted inconveniences, all made possible by Four Seasons services and amenities?
4) What if we re-engineered the pricing? To create a pricing structure that would sell prime units to NEOs at no discount but would make less-appealing units available at slightly lower prices to attract High Status Traditionals who were after the status afforded by the Four Seasons brand but stimulated into buying only by a discount. (The building has some spectacular views and boasts some quite impressive architecture in most of its residences but, being a four sided structure in a city that even proud Denver residents might admit contains a few ugly buildings, Four Seasons Private Residences has a few less than jaw dropping views in a few awkwardly designed spaces.) This sub-strategy had an interesting effect in itself. Once full-priced units began to sell in the building, they set up a pricing benchmark that was no longer based on comparable real estate pricing from around the market (which were in the toilet) but instead depended on pricing within the building itself. That meant that a discount for a wealthy High Status Traditional wouldn’t be a desperate price cut as seen in every other similar market in the country, instead it was a modest reduction from the full price within Four Seasons Private Residences Denver itself.
Advertising went in the opposite direction of the traditional real-estate promotions. It went emotional with a creative platform that basically said, “life is short, and you deserve to live every minute of it very, very well. No smiling doormen, no massage tables, no camera filtered views, no sexy canoodling couple at the bar, no granite counter-tops. Instead, a storyline about how time can rule us, and a message that lets the audience reach a conclusion. That conclusion could be best described as, “You’ve spent your whole life being chased around by time, you’ve earned the right to take control. And Four Seasons Private Residences Denver is the way to do so.”
The audience, wealthy time-exhausted NEOs with sensitive, creative spirits and functioning tear ducts bit.
By matching online media outlets with an algorithm developed using NEO typology variables—the same data that parts of this book are based on—Spring’s media buyers were able to isolate customer groups, plan and buy media, and quickly correct course based on comparative click-through rate performances.
When users clicked through to the website they were treated a website that customized the user experience according to the user’s hopes, dreams, and ambitions. It worked by asking users questions about where that user would like to be in life over the next six months, two years, and five years. This was done with a series of multiple-choice questions. Then, once the answers had been provided, the site offered up a personalized film of what that person’s life might look like if they lived a Four Seasons Private Residences Denver life. This was achieved through a point of view (POV) video cut using a real-time editing algorithm that drew from a large library of pre-shot POV camera footage of a person engaging in a wide variety of activities. This way, if a user was to respond to questions with answers such as, “Live a fit, energetic life, spend more time with my family, travel more, and never cook again” she would be served a video that showed a personal trainer picking her up at the door and taking her through a training session, children coming to visit and playing in the pool, a bellman loading luggage into a car, and a doorman welcoming her (or them) at another Four Seasons and, finally, a catered, in-suite meal. These personal mini-films were easily shareable and led to the more functional parts of the site, one of which included personal introduction videos, complete with backgrounds and interviews with the Four Seasons Private Residences Denver team members who would be caring for the resident once a home was chosen.
The advertising campaign was a record breaker. Click-through rates on the web ads came in at over 600% of the average web campaign. The website itself performed incredibly well with almost unprecedented amounts of time spent on site. “Hang-time” was over twenty minutes per visit, ten times that of the usual two-minute industry average.
And then came the qualified customers. The gamble paid off. Buyers got the message and came calling. Their purchase intention already set by the campaign, they bought because of the product and the life that it offered—not the price. Four Seasons Private Residences Denver sold exactly as Chris Norton had planned—with one glaring diversion from that plan. It sold out in eight months, a year and a half ahead of schedule.