Pass the Word: Traditional Marketing Is on the Decline
Most of the marketing concepts and principles we use today were introduced in the 1960s and honed to an art by men like David Ogilvy and graphic designer, Paul Rand. Marketing classes throughout academia taught the four Ps: product, place, price and promotion — a concept pioneered by marketing professor and author, E. Jerome McCarthy, in 1960.
So, if it isn’t broke don’t fix it ― right?
Marketing Is More Than Advertising
Generally speaking, whenever we receive a call about marketing, the caller usually means advertising. Ask any 10 people about marketing and you will get a description of advertising in return.
With that in mind, I want to talk about the gradual decline of effectiveness in traditional advertising techniques and offer at least one alternative.
In the housing industry, where we spend most of our energy, print marketing has for years held as the steady leader for attracting “traffic” to our models and sales centers on a weekly basis. I believe that remains true, but there are some hints the market is shifting.
Let’s define traditional advertising techniques as print media, direct mail, television, radio and — heaven forbid — telemarketing. All of these techniques have strengths and weaknesses, but I believe that, in some cases, their weaknesses are outpacing their strengths.
The Phone Can Get You in Trouble
Telemarketing has been virtually eliminated thanks to the provisions of the Federal Trade Commissions Telemarketing Sales Rules (known as the Do Not Call law). Many builders today do not recognize the serious ramifications that can result from violating the Do Not Call law. First offenses can ring up fines as high as $11,000 if you have not taken steps to meet the requirements of the “Safe Harbor” provision.
Our rights to call consumers have changed radically. Your phone is still a very important tool in selling new homes, but you had better know how to use it legally.
Direct Mail Is About Numbers
Direct mailers get real excited if they achieve a 2% response rate. That’s because 1%-1.5% is the acceptable average.
I don’t know about you, but on a budget ― and we all have a budget ― 1%-1.5% doesn’t get me too excited.
Like most builders, we don’t send out direct mail to 50,000 people. We have much smaller audiences, which reduces the return on our investment significantly. But I believe direct mail still has significant value in follow-up marketing. Reaching our list of prospects is far less expensive than huge bulk mailings. So focus on your list of prospects when doing direct mail.
Lost in the ‘Surfer’ Mentality
Television and radio have all suffered the effects of the “surfer” mentality. There’s no reason for people to watch or to listen to anything you don’t want to…so they don’t. Channel surfing has become a cultural pastime.
Radio and television advertising has often become an all-or-nothing proposition for many small and midsized builders. That means that if you use radio or television you have nothing left for print media. This is risky if you are trying to generate traffic.
Ads, Ads Everywhere
That leaves us with print media. I have heard numbers that suggest that the average American is bombarded with upwards of 3,000-7,000 advertising images a day. That includes newspaper ads, magazine ads, coffee cups with ads, Web site banners, shirts, signs — you get the point. Consumers are saturated with advertising.
But for most builders, the primary search corridor in your market is made up primarily of newspapers and real estate publications.
Go 'USP' to Be Different
For decades one marketing principle has held strong. It’s been called many things — “Differential Demonstration,” the “Positioning Statement” and, more recently, the “Unique Selling Proposition (USP)” — but simply stated, they all mean something very similar: What statement, proposition or demonstration compels a buyer to purchase from you and not your competitor?
Regardless of the medium of advertising, your unique selling proposition is the marketing message that should clearly communicate your distinctive and compelling selling point. It works and you should know it.
Builders often ask me, “Should I market my company’s USP or my community’s USP.” I believe that the answer lies in your objective. If your goal is to increase traffic, market your community’s USP. If branding is your objective, market your company’s USP.
Word of Mouth to the Rescue
“But, what should I do today if all these other tools are struggling to reach my consumer?” you ask yourself.
I believe that word of mouth has always been the best sales tool and is becoming more important today than ever before.
The problem is how do you get others to “evangelize” your product? How do you create a real “buzz” as opposed to a publicity stunt buzz?
Here are several possibilities that will help you increase your referral rate, as we call it:
- Train everyone in your organization to understand that they are in sales. Sales aren’t only going on in your sales center or models. Selling your homes takes place wherever potential consumers encounter one of your employees, subcontractors or existing customers.
So you must train everyone in your organization the basic concepts of courtesy, helpfulness, honesty and product knowledge. Every encounter can make or break a sale. Make every encounter a positive one.
- Recognize that the essence of branding is telling a story. Is there a story about your company that clearly illustrates your company’s approach to customer satisfaction and quality? If so, communicate it often.
Stories are the age-old approach to teaching and memory retention. Everyone can, and will, relate your company’s story if it reinforces the positive value of their purchase.
- Bring your customers together so they can become part of the story and part of the organization. It’s the cult-following mentality that propels companies like Apple and Harley Davidson.
Traditional marketing methods aren’t going away any too soon, but, the most traditional method of all is still word of mouth. Capitalize on it and you will see more than sales soar; you will see customer loyalty and brand value go through the ceiling.
Brian Flook, MIRM is the president of Power Marketing & Advertising, Inc., an advertising, marketing and sales consulting firm that focuses on the real estate industry. Flook is a past president of the Greater Western Maryland Sales & Marketing Council and a licensed Maryland Real Estate Broker. He is a noted national speaker and has been a featured speaker at the International Builders’ Show and other home building industry conferences and events. He also was a featured author in NAHB’s first Best of Sales + Marketing Ideas. For more information, e-mail Flook, or call him at 800-932-0494.
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