I have a new aphorism or, if you prefer, an apothegm, axiom, dictum, maxim, motto, or precept for life on which I am working to gain universal acceptance. This maxim is known by the acronym “TFE” which stands for “Time For Excellence”.
TFE is especially appropriate for the homebuilding industry today for this is the year that the markets begin their slow but steady climb back to normality and the industry returns to profitability. To maximize the opportunities available and to achieve success I believe that we must be excellent in every possible way as there is no reward for anything less.
In homebuilding there are five basic areas in which we can satisfy market demand and create a competitive advantage. Excellence must be provided in each of these five components. By allocating resources equally among these five areas we optimize operations and profitability and this is true whether you are a large merchant builder or a small custom builder/remodeler.
PLACE – Subdivisions are outdated and we can no longer rely solely on the developer to provide the optimal locational environment. It is the responsibility of the homebuilder to insure that a superior “community” experience is created, one that is evident from the moment the prospective customer first sees the property and continues throughout the visit. The entry statement must welcome the visitor and create a positive arrival experience that positively differentiates us from the competition. The perception of something special and better must be readily apparent throughout the property – in roadway layout and design, in streetscaping, amenities, and common area landscaping, in street signs, street lights, mailboxes and house landscaping. Every element works together to create and reinforce a visible message that this is the place in which the visitors want to live.
If there is a residential developer in the market that truly understands and embraces these concepts then that is the place the builders need to be!
PRODUCT – New buyer markets may be price sensitive but the customers still demand outstanding design and livability within the homes. Homebuilders must create new, exciting yet cost-effective homes that are appropriate for today’s lifestyles with the extra features and pizzazz that create excitement, overcome hesitancy and make the prospects want to buy. Resales are more competitive than ever so great design is essential, starting with welcoming elevations and continuing with contemporary room layouts and space allocation, contemporary details, features and extras that the competition lacks and energy efficiency that increases ongoing affordability – a total package that motivates the buying decision.
PROMOTION – The goal of promotion in the homebuilding industry is to deliver qualified traffic that is predisposed to the concept of purchasing a new home and to continually enhance that predisposition. In this competitive environment, traffic must be “stolen” from all the competition, new homes and resales, which is fighting equally hard to maintain their share.
Traffic must be delivered first to the web site and then to the sales office, with the process optimized to ensure that excitement and desire is continually enriched and increased throughout the experience and leads to the sale. Proper promotion must be a complete program with no elements lacking. Creative and intelligent web site design is essential and must include ongoing SEO. A comprehensive, supportive and consistent social media experience must be maintained. Advertising must be intelligently placed, evaluated and refined and be accompanied by promotional events and activities. An attractive and functional sales facility must be created that enriches the sales process and, when appropriate, professionally merchandised models should be provided. Promotion is a total experience that is only as strong as the weakest link.
PRICE – The correct price is never a factor of cost but, rather, what the market can afford and what the competitive marketplace allows. Proper pricing strategy creates not just the actual “base” price of the home but a format for an entire product line of homes, options and extras that is properly spread to fully serve the intended target market segment and leads to the customer process of a choice and the sale. Professional pricing tactics also include a pre-determined program for price increases as well as special promotions, when required, that is continuously providing the market with a reason to purchase now while also supporting the recognition of value.
PEOPLE – Arguably the most important factor of all is people, starting with the sales personnel who must be knowledgeable, competent and professional, trained and retrained in the specific intricacies of new home sales. The homebuilding industry appears to have forgotten the necessity of sales training in recent years, an absolute necessity for maximizing sales results. And regardless of whether the sales staff is provided by an independent broker or is “owned” by the builder, it is the builder who depends on this professionalism and therefore must assume the responsibility for insuring competence and performance.
All of the personnel involved in any way with the homebuying process, not just the sales team, must also be competent and, equally important, “nice people” – truly caring individuals who have an interest in the welfare of the customer and who treat that customer with courtesy, respect and professionalism. That encompasses the office staff including the person who answers the phone, the mortgage personnel whether in-house or external, the tradesmen in the field, the people staffing the selection center, the customer service representatives and, most important of all, the “boss”.
Everyone on the team is a factor in the customer’s experience, the sale, ongoing referrals and, ultimately, profitability.
Whether in homebuilding or in life, achieving excellence requires continual attention, dedication and hard work but the results are always well worth the effort. Of course, that’s just my opinion!
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