Strategic Residential Marketing

In anticipation of this Halloween as in the past few years, my wife and I again stopped at Costco and picked up cartons of individual packages of Famous Amos cookies.  Apparently these are big hits with the area kids as we seem to get a larger number of “trick or treaters” than our neighbors and several of the children remember us from year to year and make it a point to stop at the home they refer to as the “cookie house”. 

As we were wandering in Costco we were reminiscing about Halloween when we were young.  My wife grew up in Long Island, New York, a neighborhood of single family homes very similar to where we live today where she walked door to door to collect her goodies.  I, on the other hand, grew up on the “South Side” of Chicago, an area of rental apartment buildings, primarily six flats with secured entries, so the process of trick or treating was more challenging as we had to find someone to ring us in.  One year my friend and I “went for the gold”, ringing bells in a seventy-unit high rise apartment building and, to our surprise, someone actually buzzed us in. As few of the other kids in the neighborhood ventured into this building, perhaps deterred by the several signs proclaiming “private property” and “no solicitors allowed”, we hit the jackpot, filing our bags to overflowing.  One resident, an “older woman” as I recall (probably younger than I am today), was truly pleased to see us and had baked huge chocolate cupcakes, the best treat that I have ever received on Halloween.

How different things are today!  Back when we were kids, we walked around the neighborhood into the evening on our own.  Today, parents stand at the sidewalk keeping a watchful eye on their children.  In our day, we accepted anything that was given out without concern for possible safety – the homemade cupcakes were gladly received and were excellent!  Today, only treats in the original manufacturers’ sealed packaging are accepted and those are then carefully inspected by parents to detect possible tampering before being transferred to the children.

The world of homebuilding also is a different place today.  Housing values remain depressed in many markets; the media continue to forecast doom and gloom and consumer sentiment is still uncertain.  Household formation patterns have been stunted, buyer profile segments have changed, employment trends are shifting daily and retirement migration patterns have stalled. Competition has become increasing stronger as the larger regional and national builders have been able to buy distressed land at bargain basement prices and pass those savings on to their buyers to dominate the “price” position in many markets. Read the rest of this entry »

A new Chinese restaurant opened in our neighborhood this week but my wife and I will probably not be trying their food.  Their name is Bo Bo Chinese and while I am well aware that “Bo Bo” is a variation on “Pu Pu”, the Cantonese name for an appetizer assortment, “Bo Bo” is also the term by which the younger generations commonly refer to something that is a lower class, inferior and artificial copy of the original.  I believe that this second definition is appropriate to the new restaurant as their menu features both “Krab” (artificial crabmeat) and artificial scallops.

I do not blame the proprietors for this avoidable error in naming their new dining establishment as there is a history among even the largest corporations in America of choosing a name for a product that is simply inappropriate.  Who can forget the failed efforts of General Motors several years ago in promoting their new midsize car to the Spanish speaking markets?  Did no one in the company or the advertising agency take the time to fully research the name and discover that “Nova” translates to “No Go” (No Va) in Spanish?  It is obvious to me that no one would wish to purchase a car when the expectation is that it would not run. 

One of the realities of life is that it is often difficult to know what will work in the future as very often we really do not know what works now.  When something is working we tend to accept that success without investing our time and energy in analyzing “why”.

When I was very young my father explained to me that the true indication of intelligence is realizing that continuing to do the same thing under the same circumstances tends to produce the same result; to produce a different result requires a different course of action and/or a different environment.  This was repeated to me in various ways throughout school such as with Newton’s first Law of Motion (“A body in motion will continue….”).   As this principle was first taught to and accepted by me as truth at an early age I have spent much of the adult portion of my life trying to avoid making the same mistake twice.  If I cannot determine why something is working at least I will know when it is not working and try something else. 

In fact, I consider that ability to be one of the major assets that I bring to my clients as a consultant.  With my experience in homebuilding and general real estate in markets across the country, I have seen lots of things that do not work and try to steer my clients’ actions to avoid those same errors.  It is far easier and far, far less expensive to learn from the mistakes of others.  And if we take the time to analyze those things that do not work we can do an even better job of avoiding past mistakes.  Read the rest of this entry »

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.  Read the rest of this entry »