SOME PEOPLE WONDER HOW WE COMMUNICATED before e-mail. Now some are wondering how we ever sold homes without the Internet. Eighty-five percent of people looking for homes use the Internet, and of those, 78 percent feel that the Internet played a significant role in their purchase experience, according to a 2003 Ipsos-Reid study.
For big builders, America's increasing use of online technologies continues to have profound implications on the way they market to, sell to, and take care of their customers. What began as novel information and communication tools has—in a relatively short time period—snowballed into a customer relationship support system. As a result, big builders are revamping their Web sites, re-training their sales forces, and upgrading their entire customer management processes to reflect the fact that many buyers prefer electronic communications to in-person meetings, and not just in the early stages of considering a home.
Moreover, after years of false starts—with software packages that over promised and under delivered—builders say the technology tools are finally enabling a more holistic approach to managing and leveraging the entire customer lifecycle. Along the electronic road from the initial perusal of a Web site all the way through move-in and after-sale warranty stages, there are numerous points at which builders are now using technology more effectively to reach out and “touch” the customer: to inform, to inquire, to respond, to reassure. These touch points are not only critical to customer management, but also in capturing intelligence that builders are increasingly using to refine the entire home buying process.
Here are the some of the touch points where builders report making the greatest gains using technology to win long-term customers:
First Impressions A builder's relationship with the buying public begins long before a person starts looking for a home. This became clear in the 2003 Ipsos-Reid study, released by the organization known for its survey-based consumer, marketing, and trend research. According to the study, 42 percent of people who have not purchased a home in the past two years—and are not planning to purchase one over the next two years—say they still seek information about new homes online. The reason: They say they are still “looking and dreaming.” Impressions (and misimpressions) about builders, communities, and treatment of customers can take shape once the consumer is plugged into consumer and news Web sites.
At Los Angeles-based KB Home, where one out of 10 new-home sales originates on the Internet, Wendy Marlett, senior vice president of marketing, launched the builder's first national online promotion in 2002 via an advertising link on Yahoo!, the search portal. Sixty-six thousand entries were received for a promotion called “Home Free,” which offered a chance to win rent or mortgage payments for one year. Marlett used the sweepstakes to bring people to KB's Web site.
“The Internet is a much more aggressive marketing environment” than the traditional advertising venues, she notes. Marlett, who has been with KB Home for nine years, says, “We have to offer our shoppers as much as we can and as much as they need to know.”
In the past year or so, Marlett says she has noticed an increasing demand for more detailed information. “Sophistication has come to the Web,” she says. “Different sales skills are needed. We have training for all facets of the communication process, whether handled by the sales team or our online marketing force. All trainers go through our online training program, KB University. Customer care is the same” wherever the customer is located, she says. And that care begins earlier than ever: KB regards every Internet user as a potential customer or friend of a customer, says Marlett.
That might not be as outlandish as it sounds. According to a recent Harris Interactive online survey of 2,245 adults, consumers are turning to the Web because they consider it to be one of the most trusted sources for making major purchases—second only to spouses. A mere 5 percent of respondents to the Harris poll say that the Internet is not a good resource for information, while 86 percent of those surveyed say they tend to return to Internet sites that provide useful reference information. As a result, a company's Web presence and online follow-up by its sales force may be just as important, if not more important, than the advice that prospective buyers get from friends, colleagues, or parents.
Electronic Handshake The first online contact, or “the electronic handshake,” has also grown in importance and so has electronic lead management. Morrison Homes, which operates 11 divisions from its headquarters in Alpharetta, Ga., has a centralized e-lead management system, which is run by Kevin Gnewikow. Morrison's marketing program coordinator, Brooke Dalen, explains the process. “From a Morrison Homes Web site, or an online aggregation site [such as NewHomeSource.com or Realtor.com],” says Dalen, “a user can generate an e-mail, and that sends an e-mail to our lead management system (LMS) system, which intercepts the lead and parses it.”
The e-mail is then routed to a sales associate in the desired community who can provide a response that is both automated and tailored to the query. “It could be an immediate response inviting personal contact, or a response with more detailed information about the community, or our warranty information, all in a Morrison-branded e-mail,” she says.
On a builder's Web site, more information can be gleaned by—and about—a prospective customer than any newspaper ad could provide. And every query receives a quick, automatic response, she says. Then there is a timed and tailored response within 14 days of the first contact to construct continuous communication with the prospective buyer.
The main goal of a centralized system is to provide branded information to incoming e-mail to help funnel leads to sales agents. But nothing is wasted on the Web, Dalen says. “You want people to remember your name, and branded e-mails can do that,” she notes, adding that banner ads can bolster brand awareness as well as provide warranty and customer satisfaction information. From banner ads, “We can tell if they've gone to a community page, if they've viewed driving directions, and if they've printed driving directions,” says Dalen.
The Drees Company of Ft. Mitchell, Ky., is working on a similar system. When a consumer provides an e-mail address, Michael Rulli, director of information systems at Drees, says his company's approach is to be as specific and generous as possible with information. Rulli says he is pushing to have Drees provide information tailored to the data that the customer provides online.
“Our approach is to provide tools to Realtors and customers to find accurate information about our communities and homes in the most efficient manner possible. Rather than use a glorified e-mail to push information to customers, we plan to create customized brochures that will be transmitted by e-mail… . The content of the brochures will be dynamically created based on the search parameters entered by the Realtor or customer,” says Rulli. “The ability to search for options will be included. All information on spec homes will be ‘as-built,' including floor plans, rather than generic.”
Quick Acquaintance Once Internet users do enter a sales office, they are considerably better focused than traditional customers: Consumers who came to a sales office through the builder's Web site took only two weeks to decide on a home compared to 6.7 weeks for other buyers, according to an April 2003 survey conducted by the California Association of Realtors. Overall, prospects who used the Internet for home research spent less time with a Realtor looking at fewer properties than traditional buyers (7.1 homes for consumers who used the Web; 15.2 homes for traditional buyers). Thus, a builder's first real estate agent or referral source may now be the Internet.
Lisa Shaynfelt, an e-lead consultant at Morrison Homes, uses the electronic media to get a qualified buyer connected to a human being as soon as possible. “We do respond back [to an e-mail] via e-mail because that's how people want to talk,” she acknowledges. But she emphasizes the importance of Morrison's call center, which is open seven days a week. “Your online shoppers can get a toll-free number, and they'll get a live real estate rep on the phone. It's the departure from online to offline that works. You can only go so far online—we make the jump.” When buyers talk to a sales agent, they still might not be sure what neighborhood they want, they still might not be sure if they can qualify for a loan, and they still want to do as much research as possible, she notes. “They want to talk to someone,” says Shaynfelt.
The rest of the sales process can be as traditional or as online-based as the buyer wants. Buyers can still get reassurance from their e-mail contact during the financing and option selection stages, or they can withdraw, but their data remains with the builder.
Melissa Morman, COO of Builder Homesite, an online builder consortium, emphasizes that the Internet is producing more educated customers, which requires more educated sales people. “The front-line sales force used to greet Bob and Sally Smith and tell them the Beazer story or the Centex story, but buyers already know all that. They know your green policy, your warranties, and they might already know their homes. The challenge for the builder is to make sure that front-line sales people know what's out there on the Web, know what's on their builder's site, and quickly ascertain where the buyer is during the process. If they're walking in with a printed floor plan, that should let you know where they are in the process.”
She adds that while the sales force is becoming more sophisticated in dealing with online queries, too many builder executives still regard the Internet as a passive marketing vehicle—like billboards or road signs. But, she says, when builders truly master online marketing and can really target the message, the Internet-assisted buyer will be the least expensive lead and the most informed, qualified customer that builders have ever seen.
Mining The Data The real leveraging of the technology comes after the data is in a database. An-drew Rains, home building director with PeopleSoft, a Pleasanton, Calif.-based technology company that offers industry-specific software suites, is working with Builder Homesite to develop standards for so-called “womb-to-tomb” customer relationship management (CRM) application systems.
“We have the information about what their preferences are and what kind of family and pets they have,” he notes. “Can we now put in a ZIP code and pop up all 12 homes available to that person, in his or her price range, that the individual might be interested in? Then can the customer narrow it to three [homes], keying in preferences, and then have that information passed on to builders' regional or local sales offices?”
When the buyer enters the sales office, the sales agent would already have the information about the buyer's preferences. The agent can then publish that information on a special “home” site for the customer. Clarity of communications can result: Any changes to the kitchen, for example, must be made by a certain date, which is posted on the buyer's site. The builder and contractors need to check only one place online to verify all specifications and warranty information.
It doesn't stop there, emphasizes Rains. “After the customer moves in, let's say the skylight leaks. The customer can enter a work order request on the Web. The builder gets that and passes it to the vendor to make sure [the customer has] the most pleasant and enjoyable home buyer experience. Three years from now, when the buyer is ready for a move-up home, where will he turn?”
At Phoenix's Fulton Homes, which built about 1,600 units in 2003, Patrick Hindall, the director of information systems, is working on ways to aggregate and sort customer tracking information into more actionable reports.
“We are trying to Web-enable more of our reports so it is easier to watch trends,” says Hindall. “And we are trying to move away from paper reports because numbers on a piece of paper don't mean as much anymore.” Hindall says he imagines CEOs, sales agents, marketers, and Web designers one day logging onto a site and watching it graphically, over time, just like people watch stocks—a vision he says he is busy custom-developing for Fulton.
Of course, there are disadvantages to relying too heavily on the Web. Information on the Internet can be limited: No one can anticipate every question someone might have and answer it online. If there are technical difficulties on a site, people can get discouraged. There are a lot of casual onlookers online, such as people dropping by a wedding reception just for the champagne. And finally, it's hard to get a feel of the property by looking at Web sites. But gradually, as a builder's future buyers surf the Web, they will become less invisible, and their needs will become clearer during their entire relationship with their builder, click by click.