By Isaac Heimbinder. The home builder's search for a legitimate fit with the Internet has felt like the endless search for the Holy Grail. Along with other businesses, the home builder sought the dream of riches and the "customer for life," with improved profits generated from a continuous flow of sales of goods and services through the Internet. Many of us are now painfully aware of the flaw in this approach: Establishing customers for life takes time--possibly even as much as a decade--to accomplish and can't be handled merely by jumping blindly onto the Internet.

What the Web can do is dramatically improve traffic to sales centers, increase conversion rates, and improve customer satisfaction by enabling builders to stay connected with their customers through the entire homeownership cycle. That cycle includes searching for a home, buying a home, and then living well in that home. Each positive experience re-inforces the ties that bind. And the Web does it cheaper and better.

There are many Internet applications that promise improved processes and increased profitability for a builder by reducing mistakes, and improving purchasing efficiencies and cycle times. But most builders won't travel that road just yet for many reasons, not the least of which is the sophistication of the technology and the lack of compatibility with other builder systems. The good news is that builders don't need to be super techies to understand how Internet applications can improve customer satisfaction.

Benchmark questions

No builder should make a commitment to an Internet strategy without understanding the payoff. Here are some questions you should ask. Your answers will establish benchmarks in determining when and how to move forward to develop your Internet strategy:

  • What is the average income of your prospective home buyers? Are they first-time, move-up, or retiree buyers?
  • What percentage of your home buyers is from the local market, compared to the percentage of buyers from out of town?
  • What percentage of your buyers is generated from referrals, from real estate agents, and from self-prospecting?
  • Have your sales consultants been trained to make a planned presentation to prospective customers?
  • What percentage of those presentations, do you estimate, meet the presentation and follow-up criteria established by your training program?
  • What is the turnover rate of your sales force?
  • In your estimation, what percentage of real estate agents in your market have Internet access and e-mail?
  • Do you believe Internet use by prospective home buyers and real estate agents will increase in the future?
  • Vital answers

  • Now let me present a few hard facts to think about while you analyze your responses.
  • There are over 100 million Internet users in the United States today.
  • About 70 percent to 80 percent of new-home buyers are local.
  • The average income of an Internet shopper is approximately $70,000.
  • More than 60 percent of consumers shopping for homes use the Internet as a source of information.
  • Women surpass men in online usage.
  • People who shop for a home on the Internet visit more open houses and purchase more expensive homes than home buyers without Internet access.
  • Turnover in an average builder's sales force on an annual basis normally exceeds 33 percent.
  • A builder targets 33 percent referrals, 33 percent real estate agents, and 33 percent self-generated. The number for Realtor-assisted sales is normally higher, and the percentage of referrals is lower.
  • Nine out of 10 real estate agents use a computer.
  • More than 75 percent of real estate agents use e-mail.
  • Eighty-seven percent of real estate agents post listings on at least one Web site in addition to posting on their local Multiple Listing Service.
  • With 28 percent of Americans now regularly using the Internet, and Internet usage is growing by 2 million users a month. Clicksites Internet Research predicts the 57 million current Internet users in the United States could easily grow to over 100 million within 10 years.
  • Net buyers

    It is very apparent from these results that Internet users represent a large segment of new-home buyers. These customers begin and reinforce their new-home search on the Internet. The majority of new-home buyers appear to be getting to your sales centers through real estate agents, who use computers and e-mail, and have Web sites. The data suggests that we need to reach both buyers and real estate agents to maximize our sales effort.

    Builders can more effectively communicate with both by developing their Web sites based on the information needs of these groups and creating cost-effective e-mail follow-up programs. The Web user you are reaching also visits Internet news, information, and shopping sites. They expect any site they visit and hang around to be informative, efficient, and easy to use. Your home page is your "facade" on the Internet. Home buyers doing Internet research can't resist drilling down into an attractive site but will skip to another, more attractive site, just as a drive-by visitor will pass a visually unattractive model center.

    Grail suggestions

    With all the extensive capabilities of the Internet, builders have an opportunity to make a visitor's experience that of visiting with a virtual sales consultant rather than just reading a regurgitated sales brochure. Your Web site will tell your story effectively if you differentiate your company from the competition. Your company's unique qualities of dealing with your customers and the services you provide should set you apart.