Prosperity arose out of Frasers Property’s prior loyalty program, Friends of Frasers, which had been steadily delivering 20% of sales for the business in Australia before Australand was acquired and merged into the global property group.
Introducing a national loyalty program wasn’t straightforward, with regionally-focused teams initially resistant to any constraint upon their ability to craft local incentives, and reluctant to give away benefits in booming local markets.
But the long-term benefits were persuasive: build an enduring relationship with customers which will support sales during less buoyant market cycles, take a national approach to customer relationship management and data mining, and enhance the customer experience post-purchase.
So, what do Prosperity members get?
There are seven core pillars to Prosperity:
- Prosperity Care, a single point of contact for all post-purchase enquiries
- Repeat purchase rewards, a discount on subsequent purchases
- Referral rewards, a cash payment for successfully referring a friend
- First opportunity to buy, a guarantee of first access to all new stock prior to public release
- Membership of Fraser World, a global hospitality program
- Partner offers, with relevant benefits and discounts
- Prosperity Share, so benefits can be shared with family members
These pillars transfer into cash savings for members, with the headline benefit being a 2 or 3 per cent reduction in the price of any subsequent properties bought from Frasers Property.
On a $750,000 property, that’s a direct saving of $22,500 for a member buying her third property. Incentives of this value may be offered ad hoc by other developers from time to time, but no other developer guarantees this incentive on every subsequent purchase irrespective of market conditions.
Prosperity members receive a $2,000 referral reward for referring family or friends who then purchase a residential property from Frasers Property. The referral reward taps into a buyer’s natural inclination to affirm their purchase decision by involving friends and family, and leverages the phenomenal power of peer-to-peer recommendation.
The opportunity to access new releases prior to their public launch is proving to be the unexpected hero of the Prosperity program. In a strong property market – such as Frasers Property recently experienced at Burwood Brickworks in Melbourne’s inner ring – getting in first is a valuable advantage.
Is the program working?
In the 12 months to end September 2018, Prosperity sales represented 20.3 per cent of total national sales – that’s a combination of subsequent purchases from existing customers and sales generated by referrals from Prosperity members.
In this 12 month period Frasers Property Australia sold $1.1 billion worth of residential property; Prosperity accounted for $224 million of that total.
Our recent experiences in Victoria tell the story. Prosperity has had an enormous impact on sales at the launch of Mambourin, (pictured below) in Melbourne’s west.
Through a carefully managed combination of channel partner sales and Prosperity, we sold out of stock in the first land release and brought forward the next planned release to meet demand. This was before land lots were available to the general public.
We had a similar experience for the launch of our landmark Burwood Brickworks (pictured below) development in eastern Melbourne. Demand for townhouses at Burwood was so strong that more than a few customers chose to purchase an apartment in order to receive Prosperity members’ priority access and get a seat at the table for the townhouses.
Accelerating early sales is of strategic and financial advantage to developers. Successful launches create a buzz which supports all subsequent sales and marketing efforts, and rapidly secured sales meet financing milestones sooner.
Cost savings apply across multiple streams. If we achieve our sales targets faster, we can shorten the length of the marketing period, resulting in savings to marketing budgets over the longer term.
Shorter sales periods also means faster construction times, with corresponding savings in development costs. We are currently projecting savings of around $1 million in construction costs at Mambourin by being able to bring the construction timeline forward.
The benefits are clear, but what does it cost?
The cost of sale for Prosperity – the value of the incentive plus marketing costs for the program, excluding sales commissions – is currently sitting at 2.2 per cent, which is a good result for a program still in its infancy.
We would expect it to be somewhere around 3 per cent so 2.2 per cent is a good place to be. Over time we know we will be able to streamline our marketing budgets more so we might see that cost per sale also come down further.
Customers have to opt in to become a Prosperity member, to access the full suite of benefits. Membership is currently sitting at 8,196 members but more than 70,000 previous Australian customers could be eligible to join. Anyone who was a customer of Australand, before we became Frasers Property in 2015, is eligible to become a Prosperity member.
Building that membership base is crucial for us to be able to meet our five-year goal and also to provide greater benefits back to our Prosperity partners.
The loyalty program has attracted multiple business partners, including CoCo Republic, Max Sparrow, Mortgage Choice, Foxtel, The Blind Factory, Hanrob and others. For our business partners we are able to refer a captive, target audience to their door.
Prosperity has come a long way in a short space of time. Member engagement is high with the website receiving 16,577 page visits to date. In November 2017, Prosperity launched the myProsperity app, which is now being used by 41 per cent of members to track construction updates, register maintenance requests, access partner discounts and refer friends.
We are spending a lot of time analysing how our members navigate the Prosperity website and the myProsperity app so that we can continue to add meaningful features and improve the user experience.
It’s really important that we get this right because at the heart of Prosperity is our commitment to nurture lifetime relationships with our members. And lifetime really does means lifetime – we’re investing generously in Prosperity because we believe in the lifetime value of property customers. The purchase cycle is long, but we’re in this for the long haul.
As Prosperity matures its potential has been proven, the sales outcomes and cost savings are becoming predictable, and that’s a market advantage we’re really enjoying.
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We acknowledge and thank our collaborators
CoCo Republic
Max Sparrow
Mortgage Choice
Foxtel
The Blind Factory
