Move Forward in Your Market With Market Research
Market research is more important in our industry than it has ever been. Regardless of your situation, challenges or objectives, utilizing a strategic approach to market research and analysis will equip you with the insight — and just as importantly, the confidence — you need to accomplish your goals and navigate through a difficult housing market.
Are you unsure about how to develop a piece of land? Use market research to eliminate your uncertainty. Not only will you be more confident, you’ll have the knowledge and be better prepared to move forward efficiently.
Do you need to secure financing? Conduct the necessary research and analysis to support your funding requests. Provide lenders with real data, sound analysis and a strategic plan. They’ll be more inclined to support your requests.
Is your development already underway? It’s never too late to implement a new plan for success. Identifying areas for improvement can have a profound impact on your competitive position and financial returns.
Success in today’s market is possible. In fact, it’s occurring right now in markets and communities across the country. And the developers and builders who are moving forward are those who have employed strategic market research and positioned their community and product offerings accordingly.
It’s no surprise, because strategic market research can help increase sales and traffic, secure financing for a project, bring struggling developments to life, stage additonal grand openings for “new” communities and more.
Three Stages — Endless Opportunities
So what exactly is strategic market research? It’s simply a process that indentifies and analyzes key variables over three stages — research, planning and execution.
Effective research enables you to define your asset, prospects and competition. Once you have identified and understand those factors influencing your development, you can begin planning for your success — focusing in on your market opportunities, unique features and target consumers. Then finally, you’re ready to execute, concentrating every ounce of your effort in targeting your community’s strategic advantage.
Properly positioning your communities is essential to successful selling, and it all starts with understanding what you have relative to the market around you. Specifically, through research, you identify your development’s competitive gaps, community assets and prospect pool.
- Competitive Gaps
Study your competition’s target audience, floor plans and price points to determine where you might be at a disadvantage and where and how your target audience might be underserved. Analyze all aspects of the communities that could serve as your competition — the more detailed the better. Through this analysis, you’ll come to better understand your competitors — and the gaps that exist in your market that you can fill.
- Community Assets
To fully understand your competitive gaps, it’s essential to take a truly objective approach in the analysis of your community assets. We use our “Asset 180” analysis — a rigorous, quantitative report that examines every aspect of a project, removes uncertainty and adds clarity. Once you understand what you actually have — versus what you may think or would like to have — you can begin positioning your development for long-term success.
- Prospect Pool
The potential prospect pool will ultimately determine the customers you target as buyers, but initially, your prospect pool will include many who are not your target consumers. Analyze and understand your prospect pool so you can better define your target consumers. By doing so, you’ll conserve your resources and ensure the highest return on your marketing investment.
In the planning stage, take the information collected through your research and conduct an overlap analysis of competitive gaps, community assets and your prospect pool. This process will give you targeted insight into opportunities in your underserved market, unique selling proposition and target consumer group.
- Underserved Market Opportunities
To understand your underserved market opportunities, focus on the segment created by aligning competitive gaps and your prospect pool. This process will identify the wants and needs of those prospects who are not being met in your market. There may be a surplus of inventory surrounding your development, but underserved market opportunities identify specific market segments with the strongest potential for success.
When we partner with a developer, we implement highly targeted, cost-effective, tailored market research surveys to uncover the specific needs and wants of potential buyers. This objective process provides valuable insight and generates a high level of confidence in community planning.
- Unique Selling Proposition
You will also need to align your competitive gaps and community assets, which will help you identify your unique selling proposition (USP). Your development has many attractive features, but they do not necessarily constitute your USP.
To fully identify your unique selling proposition, you must understand the attributes that differentiate your development from the competition.
To further define your USP, you’ll want to run a SWOT analysis — strengths, weaknesses, opportunities and threats — of your community, which will provide additional objective clarity to your development and its potential. These reports should be disciplined and thorough. Ultimately, they will serve as catalysts in accomplishing your objectives.
- Target Consumer Groups
Finally, you’ll want to identify your target consumer group. Understanding this group is vital to the success of your development. In order to fully understand this group of prospects, it’s important to consider a range of variables.
Factors such as life stage and economic realities, product desires and location relevance are all critical to the analysis of your target consumer group. Once you’ve identified these and other variables, you’ll be able to communicate with them more efficiently and effectively.
After a final overlap analysis of your underserved market opportunities, unique selling proposition and target consumer group, you’ll be able to fully understand your development’s core identity and develop and implement an optimal communication strategy.
The strategy will communicate your unique selling proposition to your target consumer group as a solution to underserved market opportunities. Through this framework, you’ll ensure the success of your efforts.
David Rice is president of New Home Star, a national new home sales and marketing company headquartered in Chicago that provides highly specialized services to builders and developers across the country. For more information, e-mail Rice, or visit www.newhomestar.com.
This article originally appeared on the NAHB Sales and Marketing Channel.
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