In today’s limp economy, savvy consumers are looking for any extra incentive to select one product or service over another. Airlines, hotels, gas stations, credit cards and dozens of other businesses offer some form of “frequent flyer” points to reward loyal customers with a wide variety of upgrades, discounts, give-aways and cash back. Sooner or later, you knew that this phenomenon would spread to the real estate industry. Well, wait no longer, it’s here.
Initiated by a New Jersey-based brokerage, the rewards program is a vehicle to allow realtors to offer a new competitive dimension in the aggressive residential real estate market. Rewards accrue to homebuyers and sellers who work with a participating brokerage. The program has spread to over 40 states across the country. It is based on a point system: when you close on a property, you receive a specified number of points that can be redeemed on an online catalogue for a broad variety of home-themed products and services.
A brokerage executive offering San Diego homes for sale comments: “This kind of program has some upside potential for motivating broker selection. However, it will never trump a broker’s reputation for honesty and service.” Brokerages interested in this kind of program can use it to differentiate themselves and drive up business through value-added benefits to buyers and sellers.
The rewards catalog currently features over 300 top brands of appliances and other home-related products. Participating companies include Cuisinart, GE, KitchenAid, Bose, Apple Computer, Samsung and dozens of others. A potential home purchaser may, for instance, use her points to buy a new range to replace an old or defective one in the target property, thereby facilitating the sale. Besides appliances, categories include electronics, entertainment, sporting goods, gourmet food, indoor and outdoor furniture, and health products.
The rewards program has a half-million square foot warehouse from which all products are shipped. In addition, you can redeem your points for concerts and vacation experiences. This program is too new to gauge response, as some consumers may view it as a gimmick that compensates for a perceived deficiency in a brokerage’s services. On the other hand, buyers and sellers may see the program as a viable way to earn extra incentives for using a participating brokerage. It will take at least a year to discover whether this program is a brilliant advance in residential real estate marketing or a costly boondoggle that will be relegated to the garbage-heap of history.