WHETHER A BUILDER HAS thousands or millions to spend on launching a new community, it can be money down the drain without the right strategy and the proper execution.
Just what are the critical elements of a successful launch? What falls under the category of “must-do” and what can fall by the wayside as merely an option? Do you have to do a grand opening? (Maybe not, but you'll need to have some kind of event.) Is there a law that says you have to run ads in the Sunday real estate section? (With the price of newspaper advertising growing significantly, the answer, thank goodness, is “no.”)
To find out the necessary steps, BUILDER talked to several current and past gold award winners of the National Sales and Marketing Awards, plus other real estate marketing experts. Here are the 10 steps they told us you can't afford to skip.
Gather The Right Team If you've ever walked a neighborhood and it just feels right, but you can't figure out why, you've had a team that worked well together and talked to each other, says Claudia Roxburgh, principal and creative director of the Roxburgh Agency in Costa Mesa, Calif.
“We work closely with the interior designer, the sales display people, the landscape architect, so everyone gets it from everyone else's perspective,” she says. “It's all about communication.”
Every member of that team must understand the target buyer and price point for the community and help each other, says Erika Geiser, vice president of marketing for Christopher Homes in Las Vegas.
“Even builders building for the first-time buyer can afford to get that team together,” Geiser says. “... Just get them together at the beginning. It doesn't cost any more. Take advantage of those skills.”
Do The Research Information is power, and without it, you'll spend untold amounts of time and money fixing mistakes you could have avoided.
“Six thousand to $10,000 in upfront research will save you millions in a failed project,” Geiser says. “You really need to get the buyers to say what they like and don't like. Take an extra week and get their opinions.”
The answers can come from exit surveys at neighborhoods that are similar to yours, demographic data, competitive gap analysis, and focus groups.
Focus groups can be particularly helpful in higher-end communities, Roxburgh says.
“At this [$1 million–plus] price range, these people don't need to move,” she says. “What will get them most excited to make the move? We're looking for two or three key touch points to motivate them.”
Create An Identity Call it positioning, branding, or a theme, but it all comes down to developing a core identity. That typically begins with a name.
“It has to fit,” Roxburgh says. “Then you have to take the name and interpret it and connect it with a visual the builder will connect with. If you do that and nail it, all the ads and collateral will fall out of it.”
So will the floor plans, the exterior elevations, the Web site, the model merchandising, the sales-center design, the signage, the design-center displays, and on down the line.
It's a step that is often overlooked by builders, says David Gauger, principal of San Francisco–based advertising agency Gauger + Santy.
“The process of just getting things built is so overwhelming that to focus energy on the image can oftentimes be left as the last thing we need to do,” Gauger says. “The earlier builders create the image and positioning for a community, the more it can help them through the entitlement process, through the design process, and really contribute all the way to the point when people are moving in.”
Stay Consistent People are much more satisfied when things relate to each other in an orderly way. For a community, continuity flows from the identity and starts with the logo that is used consistently in all the marketing materials.
For Paces 325, a high-rise condominium in Atlanta on East Paces Ferry Road, consistent use of a sleek metallic logo helped overcome negative publicity about area crime, a disconnect between the site and a remote sales center, and a building that wasn't finished.
“There was just a whole cool, chic feeling that started with the building itself and went through the sales center, the brochure, the ad campaign, and the billboards,” says Sibet Freides, principal at Atlanta-based Idea Associates, which created the logo. “West Paces Ferry is where the governor's mansion is. The logo says we're not the old stodgy governor's mansion, but we're right around the corner from it.”
Use Appropriate Marketing The only rule in marketing is that there are no rules save one—use what works best for your target market. If it's first-time buyers, it may be direct mail to rental markets. If it's active adults, it might be a booth at a seniors expo.
For the high-end Crosby Estate in Southern California, Gauger + Santy made regional advertising buys—purchasing ad space on a regional basis, allowing the ads to reach a specific target audience—in Sports Illustrated, Esquire, and Golf, and advertised in regional lifestyle magazines, but did very little newspaper advertising.
“The selection of media is critical,” Gauger says, “not only from the standpoint of effectively targeting your consumer, but also to set the tone.”
The three marketing tools the experts agree are needed are on-site signage so that visitors can find you, a brochure that prospective buyers can take with them, and a Web site. Newspaper advertising is not required, especially as the cost of its advertising continues to escalate.
Dave Miles, president of Denver-based Milesbrand, is known for his award-winning television commercials, but says he worries about the production values on TV.
“You're running next to a McDonald's commercial it spent $3 million dollars on,” he says. “It's not a great quality statement.”
Make A Priority List Of Prospects Priority prospect lists shorten the selling cycle and save back-end, interest-carrying costs. New-home sales expert Bob Schultz says you can start building a priority list as soon as you have something to talk to prospects about. You can send letters to past prospects, do teaser ads, set up a sales center in a storefront, or do sneak previews to build the lists.
About three weeks before the public grand opening, bring prospects in individually to “find out who wants to be first in,” he says. “A week later, do the same thing with the Realtors. When you have the real grand opening, you've got little red dots on home sites and a whole bunch of houses you can start at one time.”
Miles says that building a priority list before a grand opening is an excellent way to separate serious buyers from the browsers. They should be invited to a private event before the public grand opening, to make them feel like the VIPs they are.
Stage A Party To Remember You By Regardless of the occasion, remember the five senses at an event and try to hit on all of them with wonderful sights, sounds, aromas, tastes, and textures, Miles says.
“If you're not committed to creating a real buzz, a grand opening will be a real waste of money,” he says.
Active-adult marketing expert Janis Ehlers recommends hiring a party planner to handle all the details, allowing you to do what you do best, whether that's working with the local media, running the sales center, or meeting customers one-on-one.
As a way to leave a great impression and give potential homeowners something to look at when they get home, Ehlers also recommends giving guests a small gift because “we all like to know we're a little special.” She often has the valets put the community's brochure in the car so the guests don't have to carry it with them all evening. It's usually inside a customized tote bag with a local magazine and a small box of chocolates.
“A lot of developers don't want to give [prospects] anything,” Ehlers says, “but the more little stuff you put in it guarantees it will move from the car to the house.”
Finally, if you have valet parking, have enough parking attendants to get people's cars to them quickly. You can have the best party in town, but if it takes an hour to get their cars, that's all people will remember.
Train Sales Staff Sales training has become critical because buyers have many more choices today than in the past.
“The buyers are looking at things that they never used to compare you to,” Idea Associates' Freides says. “They may look at something that is 25 miles from you now. It used to be within five to eight miles. You have to be a true salesperson because they are not buying out of necessity. They are buying for some different reasons.”
New-homes sales expert Schultz recommends four to six weeks of training before the grand opening.
Many builders err at grand openings by considering them social events “rather than business events at which they must be sociable,” he says. “Most people don't know how to sell on grand opening day.”
Do Follow-Up For every person who puts down a deposit at a grand opening, there will be dozens who don't, but who may still buy if there's a system in place to follow up with them. That's where many builders drop the ball, Miles says.
“It's not uncommon for people to purchase a home within 30 days of seeing a model that connects with them,” he says. “Let's make sure we're registering everybody and know how we are going to follow up with people.”
Direct mail, phone calls, and e-mail are all good vehicles for follow-up; if the event generates large numbers of names and contact information, Miles suggests outsourc-ing those pre-qualifying contacts.
“Keep those bodies warm,” he says. “Let them know prices go up in 30 days, or incent them in some way.”
Build Sales Centers With Buyers In Mind Sales centers are critical spaces because buyers will spend the biggest portion of their time there.
“The sales center is where the builder is talking one-on-one with the home buyer,” says Ava Carberry, a principal at sales-center design firm Color Design Art, based in Pacific Palisades, Calif. “That's the one place they get to tell their story. Pay as much attention to the sales center as the model homes, the landscaping, and the signage. Think very carefully about the messages.”
Pardee Homes, one of Carberry's clients, has a strong commitment to renewable resources and green building. As a result, some of its sales centers have rooms devoted to explaining that corporate value.
“A lot of times we'll use the elements within the office, such as low-VOC paint,” she says. “It may be as simple as a single display, but it can be an entire room that has displays on the walls, showing carpet made from recycled pop bottles.”