An investment counselor decided to go out on her own. She was shrewd and diligent so business kept coming in and fairly quickly she realized that to protect herself and her customers she needed an in-house counsel.
She placed advertisements in the legal publications and boards, monster.com and theladders.com and with the economy still in an uncertain state, resumes rolled in and the investment banker began to interview young lawyers.
“As I’m sure you can understand” she began with one of the first applicants, “in a business like this, our personal integrity must be beyond question.” She leaned forward. “Mr. Deerson, are you an honest lawyer?”
“Honest?” replied the job candidate. “Let me tell you something about honest. Why, I’m so honest that my father lent me $25,000 for my education and I paid back every penny the minute I tried my very first case.”
“Impressive” the investment counselor replied. ”And what sort of case was that?” she asked.
The lawyer squirmed in his seat and admitted, “My father sued me for the money.”
I believe that honesty is an absolute; someone either is or is not honest, there are no degrees or partial honesty and one cannot be honest in some aspects of life and not in others. I am often asked what qualities define a good new home salesperson and my answer is honesty, integrity, intelligence, dedication, loyalty and empathy. And those same qualities are, I believe, also essential requirements for any consultant.
One of my clients recently forwarded to me an e-blast from one of the more visible advertising firms in the homebuilding industry which claimed that a builder had taken their advice regarding the repositioning of a residential community. My client thought that this would be of interest to me as the community referred to sounded very similar to a property being developed by another of my clients. I checked and, in fact, the builder referred to was my client and I was then rather disturbed at the agency’s claim as I had personally prepared not only the original market analysis and strategy for this community but also ongoing updates, most recently last summer in which I had recommended the specific repositioning that the advertising agency had now suggested was their idea.
I fully realize that business is challenging for many of us in the homebuilding industry today but I cannot accept that it is permissible to leave honesty and integrity behind when promoting one’s services. What can possibly be the benefit of such action? The builder referred to in this promotion also saw the e-blast and, rather upset, sent me an email that included the question “is there any truth to their (the agency’s) other stories?”
And that brings up the topic of “why hire a marketing consultant and how should it be done correctly?” Certainly many builders and developers could perform their own market analysis and create proper development and corporate positioning strategies but the reality is they seldom do so and, even when they do, they fail to update them regularly. Other times these internal studies lack impartiality and suffer the prejudices of the preparer, either succumbing to the politics of the company or pursuit of the individual’s self-preservation.
What independent professionals bring to the table is the ability to prepare a comprehensive analysis of the supply and demand components of the market together with an unbiased review of the builder or developer’s strengths and weaknesses to create an optimized strategy for success. And while no one can guarantee the future, such a strategy will, if properly executed, maximize the potential for profitability.
I certainly will not suggest that the outside expert is always right. In fact, I will take this opportunity to apologize to every builder or developer who ever spent money for a market study, strategic analysis or other consultation and did not get what they paid for.
I have reviewed several strategy reports by one of the larger national research firms and I found that this company consistently provided incomplete and incorrect information and presented erroneous conclusions:
– I first was asked to review one of their reports many years ago by a friend and respected competitor who had been brought in to assist with a struggling development. I found that the original strategy had proposed a development based on a target market segment that did not exist in any meaningful numbers in that metro area. Needless to say, the community had suffered seriously and now required substantial and expensive repositioning.
– Subsequently I was asked to reposition a community that was based on another of their reports which had misidentified the competition by failing to understand the conditions and geographic preferences of the local sub-market in which the property was located. The resulting development was seriously overpriced and had totally missed the market.
– And just last week I reviewed yet another of their reports that was based on focus groups made up of consumers who did not represent the actual local target markets. Their study participants earned well over $100,000 while the actual population in the local area earned only half that income. The resulting conclusions and recommendations were biased and erroneous, creating a development that the market could not afford and as a result the community that they had recommended would not sell in the best of market conditions.
Here are some suggestions for finding the right consultant and getting the best results from your expert:
1. Choose someone who is acknowledged as an expert within the homebuilding industry. I recommend selecting from the ranks of the Institute of Residential Marketing. These individuals have earned the MIRM designation; they have taken the courses, prepared a case study and been deemed by their peers to be knowledgeable. Even better, seek out one of the highly rated instructors of the IRM courses as they have not only taught the other members but they also know a great deal more than could possibly be conveyed in any of the two day programs.
2. Seek someone who has been working with the same clients for several years. Ask for and contact references. Find out about the performance and the “style” of the consultant. Does this firm personally get into the field to verify conditions and see what is actually happening or are they merely relying on third party data? You are seeking competence, experience and work performed specifically for your needs as well as a “fit” with your operation.
3. Make certain that the principal of the firm will be actively involved on an ongoing basis in providing the services to you, not just using his or her personal reputation and visibility to sell you the services and then turning over the work to some second or third string player on the team, getting involved again only at the end to make the presentation of someone else’s report to you.
4. And most important, take personal responsibility to thoroughly review the report. Question the process, analysis and conclusions and make certain that all recommendations are based on documented facts that you clearly understand. If the report merely regurgitates the information that you provided then it is probably incorrect. And if it confirms your exact wishes without any questions, variations or alterations then your consultant is “blowing smoke…” and you are not getting what you really need nor what you paid for.
Forgive this lengthy rant but business is challenging enough in this economy and market without so called “leading professionals” in the homebuilding industry adding to the problems. 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.
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