How are super low-interest rates, super high-price appreciation, and baby boomers buying entry-level homes, move-up homes, second homes, and vacation homes all similar? The answer: One, they're history. Two, they each have tended to mask some pretty hefty challenges for home builders for the past few years. Young buyers, for instance, who has figured them out? If you have not up until now, it's no biggie. Boomers pretty much made up the difference for just about any deficiency any builder might have in his model offerings or messages. It is different now. Boomers have stopped buying everything in sight, and new customers speak volumes about how they don't want or can't afford the places their boomer parents coveted.
For home builders who make a living in entry level, entry-level's stakes just got steeper. Getting it right with the “generation next” of first-time buyers, for some, is not a matter of marketing wizardry, or having enough edge, or telling the difference between Generations X and Y. Getting it right with 25–39 year olds may be the only thing between themselves and, well, oblivion.
“To us, it's not just a marketing thing,” says Kristina Ellis, director of business operations and acting director of marketing for Melbourne, Fla.-based Holiday Builders. “It's really a whole business thing—our mission statement, our vision statement. We are trying to look at our business as a whole. When we look at the demographics and Gen X and Gen Y, to be honest, it has become clear to us that we need to adjust our entire business processes.”
INFO: WITH A TWIST OF TECH As many builders do every Friday, Holiday's construction managers call their home buyers to give construction updates. But recognizing the high-tech nature of this new wave of buyer, the company is adding a twist to their communication outreach effort. Now the company is planning to take their process onto the Internet, with construction managers e-mailing progress reports along with photographs of the construction site taken via cell phones.
And because this buyer group does so much online research, Holiday realized there was a lot to gain by revamping their Internet presence. “We are going to move away from traditional marketing and move closer to what the Gen X and older Gen Ys are looking for, which really means increasing our online marketing,” says Ellis.
As a part of the staged makeover of its Web site, the builder is taking great pains to eliminate traditional sales hype, because studies show Gen X and Y tend to tune it out and even resent overblown marketing.
Instead, it will be more resource driven, loaded with information about services and educational materials. “We are focusing a lot on education—educating the consumer about how to make a better choice for themselves, and we understand that sometimes the better choice is not going to be Holiday. We are going to take the Progressive (insurance) approach, where they allow you to go on the Web and look at everybody's products.” Eventually, Holiday also plans to make closing documents available online so buyers can review them before closing day.
CUT THE HYPE David Weekley, CEO of Houston-based David Weekley Homes, also recognizes that reaching Gen X and Gen Y buyers means keeping it real. “They are somewhat skeptical of traditional advertising,” says Weekley of the group. “If they think we are trying to trick them, we will lose them. We want to embrace realism in our ads, not oversized claims.”
So, it's no surprise that he often finds himself reining in the company's marketing department to keep its Web site free of self-promotional extras. “We have designed our [Web] sites so they are more information-driven and functional,” he says. “We are trying to remain laser-focused on that primary part of our market.”
Learn more about markets featured in this article: Los Angeles, CA.