MORE THAN TWO YEARS AGO, A TEAM OF EXECUTIVES at Atlanta-based Beazer Homes USA set out to learn just how people inside and outside of the company viewed the home building firm. The reason was fairly simple, but critically important. The nation's top 10 builders—Beazer was ranked sixth in closings by BUILDER magazine in 2003—had doubled their national market share from 10 percent to 20 percent in the previous decade, and like many other builders, Beazer CEO Ian McCarthy expected that percentage could double again to 40 percent by 2010. What Beazer's executive team needed to know was if the company was positioned to take full advantage of opportunities for potential growth.
Thirteen hundred interviews later, they had some answers they liked—and some they didn't. Among the answers that resonated most: There was little that differentiated Beazer from other builders; and though Beazer was well regarded in the industry, the company's performance and reputation was inconsistent across its markets.
The next question to be answered was whether the company would be better off being inconsistent or trying to create something “with a lot more power,” McCarthy says. The answer seemed obvious. The choice, however, would ultimately mean assessing countless details up and down Beazer's organization and lead to a sweeping national branding effort. It's been quite a journey for Joseph Thompson, president of Beazer Arizona, who was promoted to the newly created position of vice president of national brand and charged with executing the campaign.
One of the many early—and most critical—decisions to make was whether Beazer would operate nationally with a single name or a portfolio of brands. It was an important question, especially in markets where it had purchased an existing builder with strong name recognition. The decision: Beazer opted for a single name, which was established during a 12-month phase out that was completed last month.
“We felt there was an opportunity to have a unified consumer brand,” McCarthy says. “We'd have one company, one name, one message, and one purpose for the customer.”
Branding The Experience Distilling a common Beazer message across its eight regions' operations doesn't come cheaply. By the end of fiscal year 2004, the company will have invested $14 million in the effort, McCarthy reported in the 2004 second-quarter earnings conference call. However, the benefits are materializing in more ways than simply having standardized marketing materials. The money is going not only for advertising and marketing, but also for company-wide training to create a distinctive, consistent identity for the company, focused squarely on the home-buying experience.
“It really is the experience,” McCarthy says. “The homes can be specifically tailored to a market, but the experience can be the same [in every division]. The experience they go through, not just at point of sale or delivery but for a long period of time, can be something we stand behind … That's what we're branding around.”
Working with a team of outside consultants, McCarthy led a steering committee of about 15 senior managers—people who could make and implement key decisions—that studied a host of touch points to create the best possible experience for customers.
The process included the use of “slice teams” that would involve employees from entry level through division president level to examine one aspect of the business, such as marketing, sales, option sales, or financing.
The process of creating that consistent experience for customers, whether they walk into a sales center in Atlanta or Olive Branch, Miss., often started with the seemingly simple task of what to call a position.
“In some parts of the country, construction superintendents were called supervisors,” Thompson says. “In others they were builders. New home counselors used to be sales people, sales counselors, or sales consultants. We got in a room and ironed it all out.”
From that step came a set of best practices to deliver good service at every step of the process and in every market the company serves. For example, when a customer signs a contract to buy a home, instead of getting business cards with the phone number of the mortgage department and the design center, the new home counselor will now actually make the appointments for them.
“We'll hold their hand through the entire process,” McCarthy says. “At every point, we'll ask the customer, ‘Are we living up to your expectations?'”
Defining Core Positions Whether Beazer Homes—and builders in general—can live up to buyers' expectations is a fundamental question in the branding game since a successful a brand is one that consistently delivers on a promise—a promise that usually begins with the company's marketing materials and external positioning statements.
Like all branding campaigns, Beazer weighed a variety of positioning statements to attach to its public presence before finally deciding on “Someday begins today,” which was chosen in large part because it evokes a sense of urgency. But, just as Coca-Cola's external pany can't build a culture on a catch phrase.
At the heart of Beazer's branding initiative was the core belief that “Beazer is committed to earning the trust of customers, employees, and partners through open communication, responsiveness, and respect.” Operationally, that internal credo involves a vast amount of detail, but it sums up the essence of what Beazer wants to be. Every company employee carries a card with that statement on the front, McCarthy says. On the back is the question, “Am I building trust?”
“We have to be able to be trustworthy,” he says. “We're trying to say we want to be very open to customers and build a relationship with them. … Traditionally, the industry had a bad reputation of not being open and respectful with customers. We need to focus everything on that.”
The biggest challenge of implementing the new brand position, Thompson says, has been “getting everyone to understand the mission, defining the core value, and reinforcing it. Everyone knew parts of it; we're making it day-to-day and making it real for everyone through a definite focus.”
That has been accomplished through a training program called Beazer Brand Ambassadors, which started at the same time the new logo and look were rolled out internally on Oct. 15, 2003. Within three months, all employees had been through the training, which stressed creating, building, and maintaining relationships with customers. From there, function training began in the spring to detail specific duties for each position.
Implementing the new brand wasn't as tough a process as might be expected, McCarthy says. “It was harder to put the new technology platforms out there,” he says. Many of the points of the branding position already were part of the company's culture. Plus, so many employees were involved in creating the best practices to define the customer experience, they were eager to put it into action, McCarthy says.
By January 2004, the external positioning had begun. The new logo—a pair of green, outlined leaves—was the result of extensive testing and focus groups with customers and Realtors nationwide. In response to the leading role that women play in the choice to build a home, the logo was designed to appeal more to women than to men, Thompson says.
“It's not just a rough picture of a house,” he says. “It's much more free-form—a fresh life experience. The colors of green were introduced as part of that.”
Customers are supposed to get all that out of a couple of leaves? Not now, Thompson says, but they will. “When you come out with a new logo, it won't mean anything the first day,” he says. “It will evolve to represent the brand.”
Wall Street's View What does a national brand strategy mean to the investment community and the analysts who study the industry? Not as much as a builder might like to think, says industry analyst Margaret Whelan, who reports on home building for investment firm UBS Warburg.
A builder's brand doesn't tend to grab national attention—or the multimillion dollar value that's attached to the brands of some high-profile companies such as Volvo or Nike—because unlike cars, clothes, and sodas, houses stay in one place, Whelan says.
She compares consumers' lack of brand awareness of home builders to that of the furniture industry, which she also watches.
“Furniture companies are always talking about brand value, but you don't drive a couch up and down the street every day,” she says. “Why do you buy Levi's instead of Wal-Mart jeans? It's because everybody's checking out your butt.”
A builder's brand does carry clout, she says, in two realms: among consumers in local markets where the builder is dominant; and within the industry, where having a brand is “absolutely imperative to getting the best land, lots, and developers, and getting it approved and getting the subs.” It also makes marketing easier when all of a builder's homes are sold under the same brand.
Whelan's impression of Beazer's commitment to building a brand is that while it's hardly a big enough investment to make a national impact in the consumer's mind, the effort is a good start.
“Real consumer durable companies spend 10 percent of every revenue dollar on marketing—that's how you build a brand,” Whelan says. “If you're really going to do branding, you have to do a huge investment, but they're doing the first step, which is to phase out the other brands.”
McCarthy says he expects the branding effort to have significant impact. Once the initial training and marketing costs are behind them (anticipated by year's end of fiscal year 2004), it should save the company money on its marketing and allow it to leverage its size for national media buys—as well as cut costs in producing sales materials.
At a more intrinsic level, McCarthy says he sees the effort as a critical step to position Beazer for the growth that's coming by providing a framework for differentiation in customer service.
“The new brand has energized everyone,” McCarthy says. “We've had a very positive reaction, even from companies we felt would be sensitive about making any changes to their formulas. They've embraced it, said they were ready for it. Part of it was because we're so focused on customers and employees, everyone felt involved. It's a revelation that people can embrace change.”