Tim Rini has done a lot of things in his career—he’s been an architect, a developer, a home builder, and is a real estate broker. But Rini, a vice president at Epcon Communities Franchising since 2007, also considers himself—along with franchise marketing manager Rob Krohn—a parishioner in the church of big data.
“Both Rob and I tend to be very interested in data,” Rini says. “We both believe very strongly that you manage things that you can measure. And therefore, for us to find an opportunity to get accurate data and use it in our business has been ideal.”
With that thirst for numbers, Dublin, Ohio–based Epcon has partnered with Metrostudy (which is owned by Hanley Wood, parent company of BUILDER) to capture market inefficiencies by pinpointing where the need for its two-bedroom ranch product is greatest and the competition is most limited.
Though Epcon’s ambitious data project is only a year old, Rini is already working to take it beyond finding just targeting new markets. He wants to find customers as well.
A Time-Tested Formula
Over the past three decades, Epcon developed processes, systems, plans, and a brand name in active adult housing. The 29-year-old firm is responsible for 28,000 homes in 28 states.
Epcon is different than its peers on the BUILDER 100 (it ranked 38th on our most recent list with 1,135 closings), though.
Twenty years ago, Epcon launched a franchise model, where it provides prototype architectural plans, marketing materials, scopes of work, vertical and horizontal construction budgets, sample contracts, and guidance through zoning, construction, sales, and marketing questions. Its franchisees are expected obtain the financing for acquisition, development, and construction of the home; building the home; adapting the plans to local code; and handling the property management and warranty work once the home is built.
“We provide the nuts and bolts for on-going support to every aspect of the building business,” Rini says. “We provide the advantage of being part of a national building consortium.”
Epcon’s architectural plans center on its base two-bedroom ranch product. Though the company will offer a bonus upstairs suite or a basement, most of the homes are one level.
“No steps, no mower, and it has clearly been shown to have an appeal, especially to baby boomers,” Rini says about the firm’s ranch product.
Epcon knows who it is and who its buyers are. But Rini also knows what makes a new community successful by going back to its franchises. As part of its best practices with franchisees, Epcon analyzes traffic counts and searches for common elements that appear in its successful developments—like distance from commercial and entertainment amenities, visibility of the site, and road frontage. “It’s not that you can select a site by only using data,” he says. “But we have searched the common elements in successful communities.”
Checking Their Work
Epcon had an idea of what made its communities successful. But to confirm its analysis, it turned to Metrostudy.
“The work we did with Metrostudy provides validation regarding broad geographical data, with site selection being very nuanced within a particular geographical location,” Rini says.
But the real goal was expansion. Epcon needed to know where to target franchisees to build its ranch homes. The company worked with Metrostudy to evaluate its 2013 and 2014 buyers to find out which buyers had the highest segment concentrations. Then it identified the markets around the country that had the highest project concentrations of those buyers.
“Our first project with Metrostudy was to identify the top markets in the U.S. in Epcon’s market area where there’s a shortage of housing for people who are typically looking for a two-bedroom home, many times baby boomers or empty nesters,” Rini says.
Metrostudy heat mapped the U.S. and identified and ranked the top 20 markets where Epcon should direct its focus. One place might be the Dallas-Fort Worth market. On its website, Epcon cites Metrostudy saying there will be a deficit of 41,079 boomer homes by 2019.
“We’re looking at markets where we might find new franchise opportunities because of a shortage of the type of housing that we offer, and likewise that’s going to be important for our franchise builders when they call us about where their next community may be and how they might expand,” Rini says.
But Rini is sensitive to any assertion that Epcon’s foray is targeted to something new—new markets and new franchisees. “Our existing franchise builders are using data to expand with, and we are using the data in areas where we have not yet opened a community,” he says. “That is being used and getting good traction for us in those markets.”
So Far, So Good
Epcon currently is refining its marketing and advertising programs around its roughly 100 existing communities.
“We’re looking at customer segmentation so we can understand the detail and intricacies and the consumer that we’re going after,” Rini says. “We’re about to embark on our first consumer segmentation and consumer identification program in one city where we have a number of communities.”
With that step, Epcon can go beyond just identifying valuable markets and submarkets and find better ways to reach its customers.
“We’ll be more methodical about fine tuning our marketing approach and our promotions,” Rini says. “Rather than shot gunning, we’re going to be using a laser-like approach to identify the actual consumers who are prime candidates for our housing markets.”