Marketing expert addresses membership at April home builder’s luncheon
Mike Blake of Canton, Texas, discussed marketing new homes at the April Membership Luncheon of the North Texas Home Builders Association held Thursday, April 5, at the Kemp Center for the Arts.
Blake, who grew up in a home-building family and earned a master’s degree in marketing and communication, is a marketing consultant. He compared the changes facing home builders today versus five years ago.
He noted the key market conditions prior to 2007 for sellers included uncomplicated selling, high buyer urgency, declining information control, identifiable decision makers, feature/benefit selling, increasing code requirements, relocation buyers, and investor purchasing.
For buyers prior to 2007, key market conditions included easy qualifying, investors, increasing information control, face-to-face selling, high buyer demand, high buyer confidence, and low-risk aversion.
Blake then explained that today’s market conditions are entirely different. For sellers, there is a more complicated sales and marketing environment, low buyer urgency, low information control, more decision makers, features/benefit selling is less effective, there is less spec building, and there is no investor purchasing.
For buyers, the market conditions include difficult qualifying, decreased demand, fewer relocations, high risk aversion, control of the information, less personal contact, longer sales cycles, and more control over the sales process.
As for the new selling priorities, sellers are still focusing exclusively on the sales process and refusing to recognize the rise in significance of the “buying cycle.” According to Blake, in a low demand market, the “buying process” always trumps the “selling process.”
He also noted that features/benefits selling are becoming less effective. Buyers believe your competitors are equally good.
“It is not enough to know what they want, you must understand the ‘dissatisfaction’ associated with what they are trying to accomplish, fix or avoid.”
He added, “You must help them understand the cost of their problem. Also, focus more on the solution that the product. It is truly becoming a game of how you sell and the insight delivered in that sales experience.”
He added that the home buying process has lengthened. Prior to 2007, 35 percent of buyers made their decision within the first 30 days, while today 32 percent make a decision within the first 60 days.
As for the situation for the new marketing priorities, Blake noted that decision making is becoming more social in nature. “Today 92 percent of prospects rely upon the internet to do their research before making contact with a builder representative. Best-in-class organizations will attribute more than 20 percent of sales to leads that were engaged, captured and interacted with prior to making personal contact.”
The solution for this situation is that marketing efforts need to be focused on reaching prospective buyers earlier in the “research” phase of the buying process. “Marketing must be relevant, timely and not easily found elsewhere. Sellers will need to be as ‘prospect focused’ as they are ‘customer focused.’ Leads are only as good as the process developed to capture, manage and market to them.” He added, “Opportunity management systems will become a critical activity for sales and marketing.”
He added, “Buyers today think they know more than you. You have to be an expert in all phases of building to narrow the credibility gap and to become a trusted advisor.”
While January home building numbers showed an 18 percent increase in sales and a 10 percent increase in housing starts across the south, Blake stressed that we need one million housing starts each year to maintain housing needs. “Today we are only getting about 500,000 housing starts per year.”
He closed by saying responding quickly to your customers and how you communicate and market to your leads will be the key to successfully selling your homes in the future.