One of the biggest problems for builders today is the age-old one of standing out in a market littered with homes for sale, many of them steeply discounted. Cheryl O'Connor, vice president of sales and marketing for Warmington Homes' Northern California Division, managed to do that in a big way by developing a green community in a neighborhood of Palo Alto. "It worked here," she said. "But maybe it wouldn't work other places."
O'Connor, who was part of a panel of sales professionals speaking on a "What's Working" panel at the Big Builder conference earlier this month, said it helped that the project, Vantage of Palo Alto, was located in a "transitional" neighborhood, with lots of engineers living nearby. Warmington has sold 38 homes since February. That's roughly four a month in a market that's averaging less than two. A big public relations campaign around the green theme -- which involved tankless water heaters, low-VOC paints, dual flush toilets, and photovoltaic arrays as a standard item -- drew roughly over 100 visitors a week, well above company averages.
One key to the project's success was identifying a salesperson who could talk the talk. O'Connor hired a person who had sold consumer electronics to be the point person for green sales. "We were selling to engineers, who really will measure to see how long it takes for their hot water to heat," she said.
Karen Murray, vice president, sales and marketing, Engle Homes, reinforced the importance of having empathetic salespeople. Murray turned around her Cottages at Casa Del Rey project when she found a young woman who could effectively sell the "carefree" lifestyle advertised in this 6- and 8-unit cluster community, with small yards and tight driveway courts. Engle had sold 17 units in the six months prior to the change. It sold 66 in the six months after.
It helps when salespeople and management share a common goal as well. When Chris Ward, a principal with Magnolia Florida Land Development, was handed the huge challenge to sell 150 homes at $350,000 per home in three months during the slow summer season in Florida, he asked everyone to "throw down their titles and pitch in...This wasn't business as usual."
To support the $52.5 million sales effort, Ward insisted on a relatively large, $800,000, advertising budget to really get the word out. He divided the money between newspaper (60 percent), direct mail (10 percent) and other mass media (30 percent). Each piece directed prospects to an 800-number and a web site. The three-pronged advertising message was simple -- below-market pricing, below-market financing, and 6 percent Realtor commissions. The campaign boosted traffic 89 percent, and an amazing 13 percent of visitors bought houses.
While a big marketing spend certainly generates traffic, public relations can be quite effective as well. Bruce Dunlap, vice president of sales and marketing at Arbor Custom Homes, went the extra mile to generate positive publicity earlier this year. The Portland papers were running national wire stories about trouble in the housing market, even though sales at his Villebois project were doing well. Dunlap sent in pictures of sold signs in front yards of his homes "to show the papers we were selling homes."
The favorable newspaper stories generated 10 times more traffic than advertising, Dunlap said. Arbor received even more attention and traffic recently when a local paper ran a story about the company's plans to build a Cooking Light Fit House in conjunction with the national magazine, Cooking Light, which has more than 12 million subscribers. The project won't be open until next June. But the piece in the paper resulted in a spike in traffic and five sales.
You can learn more about these projects at the Big Builder conference website under "What's Working".
Learn more about markets featured in this article: Los Angeles, CA.