Please forgive me for borrowing my title from the opening lines of Richard III, widely considered to be one of Shakespeare’s greatest plays. I certainly would not dream to suggest that the quality of my writings is even in the same universe as those of the Bard. And in all honesty, I have mixed feelings about that play as it is impossible for me to remember that monologue without thinking of Richard Dreyfuss’ portrayal of the title character as an exaggerated stereotypical effete in the movie, The Goodbye Girl.
Winter will soon be upon us, a typically lethargic period for the homebuilding industry. This year portends an even more challenging selling season than usual with the continuing economic conditions, the still present foreclosure overhang, rising mortgage rates and the renewed and now real possibility of the removal of the homeowner’s mortgage interest deduction.
Instead of concerning ourselves with things beyond our control, however, I would suggest that we, as residential developers and homebuilders, adopt a proactive posture and fix our sights on what we can do to improve our sales and profitability. My belief is that life is journey in which the goal is to learn and the key to a successful journey is education. Knowledge is power. When we learn, new horizons open that enable us to learn even more and thereby obtain the tools that will increase our sales and our profits.
The first task toward gaining the essential knowledge in the homebuilding industry is to educate ourselves. We must perform a Strategic Marketing Audit, an examination of our development’s and our company’s total marketing environments, both internal and external. This analysis of the recent and likely continuing changes in the economy, the competitive marketplace and the target markets and their impact on us as homebuilders and developers will provide the knowledge to allow us to create realistic strategies to optimize our performance and profitability.
Second, we must educate our entire homebuilding team. Our land planners and architects must learn how to design (or redesign) our homes and communities to the new realities of the marketplace, not just in relation to cost, a critical component, but also in regard to the demographics, psychographics, and lifestyles of the current viable target markets. The “McMansions” situated within luxurious golfing communities that we built in the boom times will no longer enjoy the same absorption potential as they did in the last decade. As residential developers and homebuilders we must provide the homes and the environments that the markets want so that when visitors come out to see us they immediately recognize their dream of the future and envision themselves living there.
We must also educate our estimating and construction departments and our subcontractor and supplier trade partners to what we need to accomplish. And they in turn need to teach us what we need to do to meet the critical affordability factors of the new markets without sacrificing the quality and features that these markets deem essential. Jointly we need to learn about the new technologies, new materials and new products, and the new methods of doing business that will generate the values that the homebuyers demand at a cost that they can afford.
Third we need to educate our marketing team not only as to who are the new consumer markets but also as to their motivation and how they think and live. We must learn what these new buyers want and expect and reflect that in our model homes. We must reach our target markets with emotionally relevant and personally meaningful messages that will motivate them to come out and see their new communities and homes. We must recognize the fundamental revolution that has occurred in media and not only utilize the media that our markets are using but use that media comprehensively, professionally and cost-effectively, And as homebuilders, we are in a catch-up mode in that regard compared to almost every other industry.
Fourth, we must educate our sales teams on how to properly and effectively sell new homes in the 21stcentury. The homebuying markets have changed, consumer sentiment and psychology has changed and the economy has changed. While population growth will generate the necessary demand in this decade to the point that will again support production of 1,500,000+ new housing units annually, we will not see the return of the sellers’ market where the “build it and they will come and buy” philosophy will again work.
Instead, we need to determine the background and motivation of each visitor and create a customized presentation geared to that individual prospect’s needs, wants and desires. This is not unlike where we were in the 1960s and 1970s where high interest rates were a barrier to sales. There is an innate desire to own a home in this country – even with the current collapse of housing prices well over 50% of the population still wants to buy a new home. If we cannot promote investment value we can still sell community. We can sell a house or condominium residence that the purchaser can make into a home, a place to raise a family, express their own taste and style, and enjoy privacy and thousands of other valid reasons to buy. But to do that as well as we must the sales staff must be trained and educated and retrained and reeducated on a continuing ongoing basis.
Finally we must educate our potential buyers as to all of the benefits of their new home. Community lifestyle, efficient home design, flexible space, energy efficiency, quality construction and materials, environmentally responsible development and construction, the list of what makes a 2011 home better than a “used” home is endless. But without the complete and detailed knowledge of these superior qualities as well as the proper methods of communication and instruction we cannot hope to become the teachers we need to turn our prospects into new home purchasers.
One of the best ways that I know to obtain much of the essential education that we need as homebuilders and residential developers is to attend the seminar programs at IBS (the National Association of Homebuilders International Builders Show), January 12th through 15th in Orlando. I will be speaking on two seminars (“Back to the Future” on Wednesday, January 12, 10:00-11:30 am and “Marketing Essentials” on Friday, January 14, 1:30-3:00 pm) but there are dozens and dozens of excellent programs available on every possible subject to enhance our ability to sell new homes and increase profitability.
I offer one more brief quote for your consideration, this time from the 1993 film Groundhog Day, a critically acclaimed comedy that I feel expresses the possibilities for all of us in the homebuilding industry. Delivered by Bill Murray in his role as Phil Connors, an egocentric Pittsburgh TV weatherman, on his last morning reliving the title day, he greets a fellow traveler on the stairs of his hotel with “Winter, slumbering in the open air, wears on its smiling face a dream… of spring.“
Spring is coming and with it will come the potential for a better economy and an improved homebuilding market if we act intelligently and professionally. If we use this winter to prepare for the coming spring through education, we will reap the full rewards that the future has to offer. But that’s just my opinion.
Please visit our company’s website at www.levitanassociates.net. to learn more about our background, qualifications and services to the homebuilding industry and how we can assist homebuilders, developers, lenders and Realtors© achieve success.
For other posts please visit http://www.residentialmarketingblog.com/
P.S. With the Christmas holidays now upon us and the NAHB convention early in January, this may be the last post for a few weeks. I also wish to apologize for no longer allowing comments on these posts but this site, due to its popularity, has become a magnet for spammers from around the globe. Trackbacks and pingbacks are still allowed.