REE Case Study: Palmetto Bluff Strategic Development & Segmentation Strategy

The Challenge

RCLCO was retained by Crescent Communities to provide strategic recommendations and a detailed segmentation strategy for the master-planned community of Palmetto Bluff in Bluffton, South Carolina. At the time the community, like the industry overall, was experiencing slower than desired levels of sales. This was at least in part due to its uniformly high price points, shallow resulting customer pool, and limited product segmentation. The customers were mostly affluent, mature families or pre-retiree households coming from the southeast U.S. Expanding the customer pool required significant new thought about the customer and what conditions were necessary to achieve a significant volume of sales throughout the market cycle.

Solution

RCLCO worked closely with the development team to create an economically viable approach to achieve price and absorption levels that would justify the ongoing investment. To reach these goals, RCLCO recommended a wider range of price points, unique village experiences, and a different organization of the amenity program. A detailed plan of villages segmented by lifestyle, price points, and amenities prevented resales from competing with new sales, while providing additional potential differentiation in product line offerings. RCLCO also recommended adding smaller and larger production floor plans to further broaden the customer base. Overall, these recommendations helped rationalize the overall project scale and infrastructure investment using a realistic set of expectations benchmarked relative to future revenue levels.

Based on these recommendations, RCLCO presented a series of strategic planning scenarios that outlined the potential outcomes. The recommendations and scenario planning provided the client with the tools to consider current positioning, and ways to broaden this positioning to achieve the client’s goals throughout the market cycle.

Impact

As the real estate cycle progresses, the product offered by Palmetto Bluff is more diverse, fresh, and meets a much broader market. It is now one of the highest selling second home communities in the southeast United States, and continues to be a national model in terms of amenity and programming innovation, as well as marketing and sales effectiveness.

As the real estate cycle progresses, the product offered by Palmetto Bluff is more diverse, fresh, and meets a much broader market. It is now one of the highest selling second home communities in the southeast United States, and continues to be a national model in terms of amenity and programming innovation, as well as marketing and sales effectiveness.