Within the next 60 days, Builder Homesite Inc. (BHI), the Austin, Texas–based consulting firm owned by a consortium of 32 leading builders, is planning to launch a multimillion-dollar national marketing and advertising campaign designed to “take back market share” from resales and foreclosures that have marginalized new homes for many buyers.
BHI has hired GSD&M Advertising and Edelman, a leading public relations firm, to help devise and execute this three-year campaign, which will be spearheaded by Keith Guyett, a former account executive with GSD&M and Richards Group, whom BHI hired last November as its vice president of marketing and industry communications.
Tim Costello, BHI’s chief executive, tells Builder that the purpose of this campaign is to win back the hearts and minds of consumers whose perceptions of new homes and the housing industry in general are not always positive. He notes that new homes last year accounted for only one in 15 sales; in past years that ratio was more like one in six. He also says builders are their own worst enemies when they continue to refer benignly to existing housing stock as “resales” instead of “used” homes.
“I believe the product that we build today is better than anything that’s already on the market, but there’s simply not an agency out there forming opinions about our homes,” the way the National Dairy Council and the Cattlemen’s Beef Board promote for their industries’ products institutionally.
To that end, BHI has been conducting consumer focus groups in three markets—Phoenix, Houston, and Alexandria, Va.—to ascertain public perceptions about the industry and new houses. Costello says BHI will track these opinions over multiple years to determine if its marketing campaign is working.
Costello says his group is still trying to determine whether it needs to come up with one marketing message for all groups, or tailor that message for different regions and buyers, such as Millenials who might require more coaxing to see the investment value of buying a house.
However, the campaign is likely to revolve around planting the idea of buying a new home in the minds of people who may not be in the market today but could be in the future as a result of “trigger events,” such as the birth of a child or a relocation to a new job. “We want these people to consider a new home before they’re ready to buy,” he says.
Costello adds that BHI will also be targeting Realtors, who notoriously don’t show new homes to clients. One reason, he explains, is that new-home data typically don’t exist in multiple-listing services (he says his group is trying to rectify that), or if they are listed the new houses are identified by individual addresses without information about their communities or amenities.
For nearly a decade, BHI has been trying to raise the profile of an industry that for the most part has been allergic to advertising and marketing its products, especially when it comes to branding. At Builder’s Housing Leadership Summit in New York last week, Phillippe Lord, vice president of strategic operations and market research for Meritage Homes, lamented that builders and new homes have “lost their relevance.” Fred Ehle, PulteGroup’s vice president of brand management, admitted that his company is still using online renderings and drawings of its houses when “used-home sites are using high-res photos” to showcase their products.
Costello points out that more than one million families search online for homes every month. (One of BHI’s portals is NewHomeSource.com, which allows users to search for houses in just about any zip code or community, and directs them to builders’ houses and communities.) Ehle suggested during the Summit that builders should develop an online feature that encourages visitors to “build your own home” the way the car companies do on their websites.
But Ehle also wondered how effective any marketing campaign can be persuading buyers “to go for the new home and the bling but sacrifice the better location” that a resale might offer.
That being said, Pulte recently signed on to participate in Envision, a joint venture between BHI’s New Home Technologies group and manufacturers, which provides fully integrated management of options that builders offer their customers. About a dozen of BHI’s builder partners participate in this program, with a dozen more in the pipeline, says Costello.
“It’s a phenomenal program,” says Dennis Webb, a vice president at Fulton Homes in Scottsdale, Ariz., which has been working with BHI “since its infancy.” Webb says the banner ads that Fulton posts through Envision “are an important part of our marketing. The purpose of those sites is to get people to visit our site.” And something must be working, Webb infers, because Fulton Homes’ eight subdivisions are currently averaging around 10 sales per month each. Fulton is on pace to sell between 850 and 900 homes this year, which would represent a 160% increase over its closings in 2011.
John Caulfield is senior editor for Builder magazine.