Builders Advised to Rev Up Competitiveness in Down Market
Convention-goers attending an International Builders’ Show seminar in Orlando, Fla. were told they need to take stock of their product and develop innovative marketing strategies in order to survive the current housing market slowdown and stand out from the competition.
“The first step is to conduct an internal review of your company’s product,” said John Schleimer, MIRM, president of Market Perspectives, a national real estate research and consulting firm based in Roseville, Calif. “Do you have the right standard features? What do your prospective buyers think? What is the curb appeal of your front elevations? What value-engineering changes can you make?”
The three key rooms to focus design dollars on are the kitchen, family room and master suite, said Schleimer. “The master bath is a sanctuary. You can never have enough closets in the master suite.”
“And don’t forget the Suburban in the garage,” he added. “Adding three feet to the depth of the garage will get an extra sale per month.”
Stating that it is absolutely vital to make a good first impression, Schleimer said that builders need to ensure they maintain a clean and appealing job site.
“Is your off-site and on-site signage effective? Do you control construction debris within your projects? Are your information centers appealing? Does your model merchandising ‘turn on’ your prospects? Are your spec homes clean?” These are all questions that need to be addressed, he said.
To further get a leg up on the competition, Schleimer suggested that builders see what their competitors are up to.
“Review the design quality of their plans compared to yours,” he said. “Compare their standard and option features to yours and their marketing and merchandising to yours and then make the necessary competitive adjustments.”
Cutting the Ad Budget a Bad Decision
Observing that the Internet is a “great equalizer” in today’s marketplace, Richard Elkman, MIRM, president of Group Two Advertising in Philadelphia, said that it pays to invest in a good Web site.
“In 2006, 15% of all real estate spending was online. That figure will jump to 32% by 2010,” he said. “Most Web sites today are pathetic. You have to have a budget for Web site marketing.”
Noting that minorities prefer to buy new homes at twice the rate of white buyers, Elkman noted that blacks, Hispanics and Asians have distinct cultures and you have to learn how to reach them.”
When planning an ad campaign, Elkman said the goal is to “develop promotions that set you apart from the rest,” to create billboards and signage that “catch the eye” and to be innovative with media placement.
“Ads in the real estate section stink,” he said, noting that they tend to be crammed together and fail to stand out.
Though it may seem counterintuitive, Elkman also cautioned that cutting an ad budget in a down market is “almost always a bad decision.”
“You can’t keep your listing a secret and expect to sell,” he said. “And when the competition reduces its advertising, your strong marketing effort will make you more visible than ever.”
Understand What’s Under Your Control
Declaring that a cooling market is a confused market, Bob Schultz, MIRM, CSP, and president of New Home Specialists, Inc., a management consulting and sales education and training firm based in Boca Raton, Fla., said that “perception is reality.”
“When you sell homes, it’s not about the house, it’s about the experience,” he said.
Schultz said that builders need to understand what they can and cannot control.
“You can’t control interest rates. You can’t control rising construction costs. You can’t control what the competition does. You can’t control what the articles in the newspaper say. You can’t control the weather outside of your office.
“However, you can control how you influence customers’ perception of interest rates. You can control how you influence customers’ perception of construction costs. You can control what you do — through attitude, appearance, your presentation and sales skills. You can control what you put in the newspaper and you can control the environment customers experience when they come into contact with you.”
Survive Changing Markets
Bill Webb, MIRM, shows you how in “Sweet Success in New Home Sales,” available through BuilderBooks.com.
This book provides powerful techniques for selling more homes and making more money in leaner times. "Sweet Success in New Home Sales" lays out the proven approaches for crafting and delivering sales excellence.
To view or purchase this publication online, click here, or call 800-223-2665.