I bank at one of the major money center banks. This is not by choice but due to my own lethargy as when my bank was acquired I stayed put rather than move my safe deposit box and reprint my checks. Last month I deposited a check from a new client. It was not a huge sum of money but as we had not done business together before, I waited the customary two business days to make certain that it had cleared and checked my on-line statement before assuming that the funds were in my account and then forgot about it. Imagine my surprise two weeks later to receive a letter from my bank informing me that they were enclosing the returned check (actually a facsimile copy), had reversed the deposit and charged me a service fee.
I went to the nearest branch of this bank to see what had occurred and found that the check had been miscoded, an error my bank had also made six months previously when bouncing another of my deposits from a different client. The assistant branch manager agreed to redeposit this check and asked the teller to place the facsimile check in a special sleeve so that it would be hand-coded and the error would be corrected and she most graciously agreed to waive the fee for the returned check.
Lo and behold, two days later I checked on-line and found that the re-deposit had also been reversed and another service fee had been charged to my account so this time I called my client and requested that they replace the check with a wire transfer which they were happy to do. Of course, my bank account was then charged a wire transfer fee. It turns out that once a check has been miscoded by my bank it cannot be undone; apparently there is a law of “bank infallibility” (I mistakenly thought that power was reserved for the Pope) which comes into effect and states that since the bank can never make a mistake, there is no need for them to create a procedure to correct a problem that cannot occur.
This bank will not suffer for their failure to change as they far too large for the government to allow them to fail. And there is no need for them to take any rapid action as they are immune to market conditions. When other banks fall into difficulty, they will be merged into this goliath and “my” bank will continue to grow and prosper.
But there is a world of difference between this bank and any homebuilding company. No homebuilding business, no matter how large, is going to be saved by the federal government. And if they fall into serious trouble they will probably not be saved by anyone else. If you doubt that, take a look at John Laing Homes which was sold to Dubai-based Emaar Properties in 2006 for $1.05 billion, filed for bankruptcy in February, 2009, then liquidated their assets. And that is just one of the 84 “major” and 53 smaller homebuilding companies reported to have “imploded” in the past four years (http://builder-implode.com/).
So if there is no white knight out there ready to rescue a homebuilder, why is the industry so slow to adapt? Our business is in a constant state of flux due to changing external conditions – worldwide financial markets, employment, consumer sentiment, interest rates, government action, household formations and demographics to name just a few. In the IRM courses we call this “market drift”. Yet I see inertia continue throughout our industry as we fail to respond appropriately and in a timely manner to these changes.
The larger homebuilders are now strongly targeting the first time buyers and making a concerted effort to attract the “Millennial Generation” which is far from just a younger version of the Baby Boomers. They are perhaps best identified by an increased use and familiarity with communications, media, and digital technologies made possible by the advent of instant communication – email, texting, and IM (instant messaging) and the social media outlets such as YouTube, Facebook, MySpace, and Twitter. As such, they are a market with entirely different philosophies, expectations and procedures regarding life and, as it relates to the homebuilding business, marketing and purchasing.
I do not wish to turn this post into a commercial for the numerous suppliers in our industry who understand, have the skill and knowledge and the technology to properly service these new buyers but I have to ask the following questions:
If purchasers buy individual communities as opposed to a corporate brand when selecting a new home, why have most builders including the “nationals” failed to provide individual Facebook and Twitter pages for each of their communities and why is every new home salesperson not blogging regularly about his or her community?
If this target market believes in instant communication, why is it that only one of the largest homebuilders and almost none of the smaller builders provide web concierge services?
If the homebuilding industry now concentrates a substantial portion of its media budgets on web-based marketing, why are homebuilders not constantly updating SEO (search engine optimization) for their websites? Why are they not tracking and analyzing all web visitors in real time to determine number of visits, page preference, time on site, etc? Why are they not obtaining real-time analysis of visitor traffic source to optimize cost and placement of click-throughs, banner ads and other purchased space?
Most other Internet-based industries provide these services and we are now an Internet-based industry if we are to properly service not only the Millennials but all our other target markets as well.
A crow was sitting on a tree, doing nothing all day. A small rabbit observed the crow for several days. Getting envious of the easy life of the crow, the rabbit finally asked him, “Can I also sit like you and do nothing all day long?”
The crow answered, “Sure, why not? Help yourself.”
So, the rabbit sat on the ground below the crow and rested. In no time at all, it falls asleep. Suddenly a fox appeared, jumped on the rabbit and ate it.
Moral of the story: To be sitting and doing nothing, you must be sitting very, very high up.
And in the homebuilding business, even very high up is no guarantee of success and continued profitability. But that’s just my opinion.
Please visit our company’s website to learn more about our background, qualifications and services to the homebuilding industry at www.levitanassociates.net. And please consider following us on Twitter at http://twitter.com/DanielLevitan.
For other posts please visit http://www.residentialmarketingblog.com/