Barriers To Entry

Builders say the goal of their ads is to get across to a diverse customer base with specific, even divergent, needs that their product selection matches these buyers' shifting life stages. “If you're trying to attract a second-generation Latin-American buyer, he might need more rooms for an extended family or a split bedroom or a mother-in-law apartment with a separate entrance,” says Mark Neubauer, president of sales and marketing for Melbourne, Fla.–based Mercedes Homes. “We've shown focus groups 50 ads, and invariably they gravitate towards those that emphasize what the product is.” Mercedes has moved away from institutional advertising in favor of marketing that either points out something that “is a unique proposition to the sale” such as the house's elevation, or something that calls attention to those “value-added” components—a community's schools, for example—“that are on every buyer's checklist.”

To unearth those common denominators Mercedes Homes pulls available demographic data for a three- to five-mile area around a given community and conducts door-to-door interviews to determine “what kind of cars they drive, their age and employment, what are their hobbies,” explains Neubauer.

Newport Beach, Calif.–based Wm. Lyon Homes maintains a database of 20,000 past and potential customers that it divides into first-time buyers, young families, established families, and transitional families. “We tailor a lot of our product to these groups,” says Brian Doyle, director of sales and marketing. “The American dream is the same for everyone. An Asian couple with kids has the same issues as a white couple with kids.” When Wm. Lyon shows people in its ads, it's not so much to highlight their race or gender but rather to illustrate a home setting—say, a kitchen where people are cooking—that “anyone can look at it and say, ‘yeah, that's me,'” says Doyle.

Some builders would contend that calling attention to a buyer's race or gender in their ads can be a distraction. “The graphics are the easy part, but they aren't going to convince anyone to buy your product,” says Kathi James, vice president of sales and marketing for Alpharetta, Ga.–based Morrison Homes. Three elements are seminal to Morrison's marketing to any group, says James: the message, how it is communicated, and the vehicle that conveys it. Her company has translated its marketing materials into Spanish, with an eye towards providing Hispanic buyers with easy-to-understand explanations about its mortgage financing. Morrison is working with the consortium of builders that advertises on the Web site NewHomeSource.com to develop a Spanish-language product. And this builder places its own ads on Internet sites that different buyer groups might turn for information such as Terra.com and Star Media.com for Hispanics and BlackPlanet.com for blacks.

Note from the NAHB

The NAHB is in the forefront of providing training and assistance for builders and their salespeople in the important area of fair housing.

“I am confident that our members are committed to ensuring proper sales practices in their businesses. To do this they must stay current on all aspects of the laws relating to home sales and must comply with those laws. Through our University of Housing, the NAHB offers various courses that help educate members on this important issue.

“I strongly encourage builders attending the 2005 International Builders' Show to attend the very popular educational programs, “Marketing to Multicultural Home Buyers,” “Marketing to the U.S.–Hispanic Homebuying Market,” and “Best Practices for Providing an Absolutely Incredible Homebuying Experience.” Later in 2005, we will be rolling out a comprehensive Multicultural Sales Protocol course designed by the NAHB's Institute of Residential Marketing and the University of Housing. This course will be taught at local and state HBAs and will focus on helping salespeople to better understand how to communicate with cross-cultural buyers and do business with members of this important market segment.”—Bobby Rayburn, 2004 NAHB president and a home and apartment builder from Jackson, Miss.

Additional courses available from the NAHB and other organizations: