Home builders struggling to determine where to spend their limited marketing dollars and get the best return on investment were given pointers during a recent NAHB webinar on marketing.

In the “Creating the Modern Marketing Budget” webinar, which is available for replay, Paul Stern, director of Realtor outreach with Builders Digital Experience, told attendees that they should go back to the basics — to use comparative market analysis to determine who their competitors are and what they are doing well — before developing their marketing budget.

“If you don’t know what’s selling, where, for what reasons and to whom, it will be difficult to compose a marketing plan and budget that will effectively reach your target clientele,” Stern said.

He said builders should drive around their local area to become more familiar with community residents and visit convenience store at different times to see the clientele.

“One time I did this at about 8:30 in the morning and the only people I saw coming in and out of the convenience store were literally ladies dressed for tennis,” Stern said. “So what this indicated to me was that I was near a community where you had a lot of stay-at-home or non-working married women, which you could see from their hands, and they were very active in their community.”

“And a lot of people nearby were really into the tennis scene,” he added.

Taking the time to learn about their potential buyers also can help builders spend their marketing dollars more effectively, Stern said.

"If you do a great job at understanding what’s on the mind of your buyer — what their pain point is — and your product or community addresses those pain points successfully, that does wonderful things for your sales pace,” Stern said.

Successfully addressing pain points can increase a builder's conversion rate, “and when your conversion rate goes up a lot, you don’t need to pour so many leads into the top of your sales funnel,” which reduces mareking expenses.

Once builders learn more about who their prospective buyers are, Stern said they should try to determine how they “consume media” — essentially how they can be reached. For example, they may start the day reading the morning paper or logging onto Facebook.

Once that’s determined, they can earmark their marketing dollars accordingly — but Stern warned against using stereotypes to make spending decisions.

“Just because someone is of retirement age does not mean that they’re reading the newspaper,” Stern said. “Some of the most noticeable gains in certain social media usage are in the older age groups.”

Old-School Marketing Must-Do's

Despite the attention given to new social media tools, traditional marketing methods remain essential elements of the modern marketing budget, Stern said, noting that sharp-looking signage, Realtor outreach and listing your homes in the Multiple Listing Service are essential to getting prospects in the door.

Once they’re there, he said, they should see sales models in perfect condition and all inventory homes promoted with flyers and ready to show.

Stern said builders should see their homes and community through the eyes of their buyers, who will notice everything — or fail to notice the most important thing. He said prospects drove past the entrance to one community because they couldn’t see it because the builder, seeing the community with his own eyes, had failed to notice that bushes obscured his community’s main entry monument.

Modern Marketing Tools

With the vast majority of home shoppers pre-shopping on the Web, Stern said that a high-quality website is a builder's most important modern marketing tool. “The website is literally the business card of today,” he said. “It’s a great way to bond with your buyer.”

Creating a highly effective website entails optimizing content for commonly used search terms and including sections devoted to real-time blog feeds or Twitter updates, and instant chat monitored by a dedicated sales counselor.

Once the website is built, Stern recommended that builders use social media tools to further reach out to potential buyers and direct them back to the site — such as a community profile on Facebook or a video tour of a model home posted on the community’s YouTube channel. 

Stern cautioned that social media are only effective when they engage potential buyers in a conversation. “It won’t work if you launch it and forget it,” he said.

The Bottom Line on Budgets

Stern recommended an annual marketing budget of 3% to 5% of gross revenue. Builders should know what they are spending their marketing dollars on, when they plan to spend them, and the core message they want to convey to their target customers.

Most importantly, Stern said, “Be confident that each dollar spent will produce more than one dollar in additional sales revenue.”

Stern also said that builders should be poised for change.

Just as marketing and the tools to reach potential clients have changed with the growth of the Internet, builders should be aware of how further change will affect buyer responses in the coming years.

“Be a student of the game ─ look around, see how our culture is changing, see how buyer behavior is changing and make sure your tactics marry well with the changes that are going on,” Stern said.

Webinar Replay Available

“Creating the Modern Marketing Budget” was produced as part of NAHB’s Webinar Wednesdays series and is available for replay. To view other webinars in the series, visit www.nahb.org/webinars.

A companion webinar, “Culture Change for Sales Success: Creating a Sales-Centered Organization, presented by Jason Forrest,” author of “Creating Urgency in a Non-Urgent Housing Market” and "40 Day Sales Dare,” will be held on April 4. It will explore  how to create a sales-centered organization and provide training that enables sales professionals to influence the sales process rather than be influenced by it.

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