A lot of home builders and developers have been doing things backward when they create their communities and design new homes, two marketing veterans told a large audience of builders and developers at Hanley Wood’s Housing Leadership Summit on Tuesday.
Instead of asking themselves where or what they should build, the presenters told the audience of builders that they should figure out who they are building for and then work from there to the where and what.
Michelle M. Mace, principal of M3B Inc., whose specialty is helping builders define exactly who their targeted buyers are by looking at psychographic segmentation of buyer traits, explained that a plethora of information about people’s buying habits and preferences is available from The Nielson Company and other data organizations, allowing builders to establish a laser-like focus on their home buying target audience.
“They need to understand the segments [of buyers] they own,” said Mace.
Developers need to be alchemists, she emphasized, making sure that the builders they bring into their communities are targeting and creating the right products for the buyers the community will attract.
Mace suggested that builders should also get to know very specifically who a development's buyer market is. Builders and developers need to figure out the “story” of the development to help zero-in on what type of buyer would be attracted to a given project.
Teri Slavik-Tsuyuki, chief marketing officer for Newland Communities, echoed Mace’s emphasis on the importance of figuring out who your customers are and making sure you keep them in mind every step of the way, from product development through the sales process.
Newland has a mega CRM system full of detailed customer profiles, which it shares with the builders in its communities, helping guide them in the product creation process.
Newland’s marketing machine is sophisticated enough to make sure home shoppers who have registered get the correct follow-up. For instance, a single person whose children are of the furry variety won’t get sales pitches about how good the schools are in the community. Instead, they are reminded about dog parks and walking trails.
Slavik-Tsuyuki reminded the audience that 30% of Newland’s buyer interest group is younger than 35, and 40% is 55 and older. So if all a builder is doing is creating homes for nuclear families with kids, it is missing a lot of the market.
After visiting communities across the country, Slavik-Tsuyuki discovered that many sales agents were horrible and that home shoppers were literally having the spouse keep the car running ready for a quick getaway while their partner ran in to get a brochure.
So Newland decided that the typical sales center with a flag out front was a non-starter. In two newer communities in Washington State and Florida, Newland threw out the old sales center model and instead created gathering spots in the community where shoppers could come and chill out over a cup of coffee and, by the way, look at a topographical map of the community as well. The new centers are transparent, with glass walls, so shoppers can see the relaxed people inside surfing the internet on iPads and realize they don’t have to fear an overly aggressive sales agent.
The result: sales at those two communities have been stellar.
Teresa Burney is a senior editor for Builder magazine.