Ever wonder why, with so much evidence for on-line marketing and social media, your marketing agency tells you that your business “requires a different mix”? Across the country, we see example after example of builders and developers being guided into a marketing mix that yields the most profit for the agency, but not the most traffic for the client.  Their profit goals are not aligned with your marketing return goals.

You’re likely aware that traditional media outlets offer major kickbacks to the agency who places ‘the spend’.  What you may not know is, when you spend $10,000 on an advertisement in the newspaper, your agency is typically getting a $1,500 to $2k kickback.  In radio and television, the kickback percentage may be more in the 30% range.  Online marketing is typically more transparent and does not afford the same opportunities for kickbacks of equal amounts.

It’s not a bad thing for an agency to earn a profit or win a creative award.  It becomes bad for the client when the agency’s “professional opinion” is based on things other than the client’s success.  Sure, the agency has to achieve some success in order to keep the account, but that’s a far way from an optimized marketing program.

How do you get better visibility and better alignment?  Demand unbundled services.  Pay the media channels directly and ensure that you are getting the agency discount.  Then, pay the agency for their creative and administrative work separately.  This strategy is not intended to take money away from the agency, though it certainly will.  It is intended to position them to prioritize your success and marketing ROI.

 In today’s environment of reduced budgets and increased competition for consumer attention, you need know the new rules of reaching your target consumer.  The National Association of Realtors (NAR) reports that, in 2009, approximately 94% of homebuyers searched online for their new home.  If you are, in any way at all, approaching marketing the way you were a few years ago, you MUST change.

“Change” is easier said than done.  You may look back at the success you experienced a few years ago and find it difficult to change gears on marketing in such uncertain times.  If change was as easy, then the companies that made 1999′s Fortune 500 list would not need to say goodbye to 238 of their peers a mere 10 years later – a change of almost 50% from the 1999 Fortune 500 to the 2009 Fortune 500.

You’re not alone.  Giant companies, many household names, are responding to these same facts.  In March, General Motors announced they are shifting $1.5 Billion of advertising online.  For perspective, this means the third-largest advertiser in the country will spend half of their $3 billion advertising budget online. 

It is not enough to abandon traditional media and dive into online marketing.  The key to marketing success is to use a new mix of media to have a more targeted approach than ever before.  Print and other traditional media types still have some relevance.  They have advantages over other marketing tools in creating product awareness, acquiring customers and building brand loyalty.  But their high production costs yield a lower ROI than e-mail or search.

You don’t need more money to do it.  This new approach can and should be more cost-effective than the traditional approach.  The idea is not to add to your spending, but to reallocate it.  A smart, blended approach should allow less spending and a higher ROI.  This increased effectiveness will drive more traffic and increase your bottom line.

In analyzing your target consumer, consider such variables as age, marital status, children, income, etc.  While every buyer will have defined characteristics, not every potential buyer fits within their defined category.  The goal is to reasonably presume the most effective channels to reach your typical consumer efficiently.

Print advertising is beginning to be a bad five-letter word in the advertising world, but before it’s thrown out of your strategy, it may just need a tune-up.  Who exactly am I trying to reach? Those consumers who are defined as traditionalists still receive a majority of their information from newspapers and other print publications.  Print media may not only be their primary source of information, but may also be the source that holds the most credibility for them.

Boomers, Gen Xers and Millennials still exhibit some very specific uses of print.  Specific print publications that are of particular interest to them are still being read.  Understanding what publications are of interest, applying the correct messages and engaging each specific target market will ensure that print ads are used correctly in the marketing mix.  With these buyer groups, print can be a key driver in creating online involvement with the brand.

Television and radio campaigns still hold a certain level of prestige, but can be expensive to implement.  However, television advertising continues to respond to pricing pressures exerted by other media and can present unique opportunities.  If done correctly and timed properly, such campaigns add to you successful marketing mix. 

Internet and other web-based strategies reign supreme today with most target groups.  However, each segment must be pursued with different approaches. A Gen Xer or Millennial is time-sensitive in how he or she gathers information.  They don’t see value in long, drawn-out flash advertisements.  They are web-savvy and used to getting exactly what they want – quickly.  More mature audiences have a different need and level of patience.  Implementing tactics that tell a story online and how it relates to them may be the more effective way to communicate.

There are many mediums, but each has its specific uses.  Know your target consumer and know their media preferences. That is the foundation of effective marketing.

Fortunately, there’s also plenty of positive information about the benefits of buying a new home these days.  To be successful, your team needs to demonstrate a thorough understanding of those benefits, the industry and their market.  And the best way to communicate that knowledge is through the use of third-party resources.

Customers want, need and deserve objective information on why they should move forward.  The persuasiveness of your associates just isn’t going to cut it.  Your team has to have updated data and articles on hand at all times.  For every objection your associates might face, they should have at least three third-party resources that speak to the contrary.

Considering a foreclosure?  Show them why buying a bank owned home may not be all it’s cracked up to be.  Have articles on typical improvement costs.  Break down common difficulties and delays in closings.

House to Sell?  Highlight the average days on market in that particular neighborhood.  Have MLS information on hand, and show them price comparisons.  Provide articles on the benefits of staging.

Financing concerns?  Have updated rate sheets on hand.  Know the mortgage industry trends and program requirements.  Have the stats and stories printed and ready to present. 

Your team needs to create and know their way around a third-party book.  This collection of articles, quotes, and industry information is an invaluable resource.  Your customers want to buy.  Now, it’s up to your team to present the evidence why they should.

In times like these, the farmer mentality is essential.  Ensure your team is plowing, planting, and harvesting.  It’s the only way to success in today’s market.

So is it time to panic?  Not so fast.  But the news certainly serves as a reality check and reminder to keep a close eye on costs and performance as we navigate through these challenging times.
 
The companies still standing in the home building industry have already overcome a slew of obstacles to even arrive at this point.  With signs of recovery happening all around us, you may hear sighs of relief or sense an eagerness to get ‘back to the way things were’.

Last month’s sales results should serve as further evidence that we have a long road back and may never see things the ‘way they were’ again.  As you, no doubt, have already done, it’s time to continue reinventing yourself and your business.

We all saw how fast the dominoes can fall when companies blindly follow the masses.  Measure twice and cut once.  Take a close look at your business and ways to improve efficiencies in driving revenue and protecting margin.  These are the times that will ultimately separate the leaders from the pack.

Good things are still happening in home building, but we’re not out of the woods just yet.

Last month, Lennar Homes announced they would be expanding into the Atlanta market, apparently looking to capitalize on the surplus of cheap lots available.  And last week, the builder agreed to buy 1,400 finished home sites across 38 Florida communities over the next two years, with right of first offer on over 1,300 more after that.  The increased activity has raised a few eyebrows, but it certainly conveys a confidence in the market.

Lennar is certainly not alone with their recent moves.  A number of builders have begun picking up lots and land in markets across the country.  With acquisition costs at record lows, builders are jumping back into the buyer’s circle in an attempt to get a jump on the market recovery.

But are they acting too quickly?  For all the builders surging forward, there are those still stuck in hibernation mode, unwilling – or unable – to move forward.  Many experts also contend that it may be a little premature to start celebrating.  With foreclosures looming and government assistance programs scheduled to end, there may still be a few bumps in the road.  And those who have overextended themselves may struggle to make it through.

So who’s right?  While no one knows for sure, it is clear that these times are critical in our industry.  Although massive acquisition rollouts could prove a little dangerous, failing to act at all may be even disastrous. 

Now is the time to get back in the game and begin taking advantage of the widespread increase in consumer confidence.  Builders around the country are thinking outside the box and proving that success can be had on significantly reduced budgets.  Those stuck on the sideline – waiting for the “perfect” time to reenter the market – may get left behind completely

The market, at least for now, is moving forward.  You may need to tread lightly, but at least move with it.

Take Pepsi.  The soft drink giant recently decided not to air any ads during this year’s Super Bowl.  The decision marked the first time in 23 years that Pepsi has not shelled out big money for the valued airtime. 

Instead, Pepsi has initiated a social media campaign to promote their new “Pepsi Refresh” and will allocate $20 million in grant money over several categories and causes.  People will be able to visit the Pepsi Refresh website, access it via Facebook or Twitter and vote on or submit ideas for where they think the money should go.

Why the change of heart?  Pepsi has come to realize that mass, one-way marketing is fading in effectiveness.   Instead, two-way marketing is more important than ever in truly communicating with your buyers.  The same is true in home building – especially in home building – where buyers are often making the single-most important buying decision of their life. 

So how can you leverage social media in your communities?  Chances are, you already have a team of associates who use social media sites throughout the day – they check Facebook or Tweet on Twitter.  They play videos on YouTube or check out blogs.  Imagine the impact of utilizing those same activities for your community.  Get associates involved and make social media a function of their daily activities.  Start small – just a few minute per day can significantly increase your targeted marketing communication.

Obviously, the key here is communication.  We’re not talking about blasting advertisements or self-promotions.  You want to engage your buying community, provide a forum for dialogue and address their specific wants and needs.  Set up clear and reasonable boundaries for your employees and dive in. 

Through this process, you’ll simultaneously drive incremental traffic and better understand your buying community.  Plus, the vast majority of social media outlets are available at little or no cost.  With over 80% of buyers starting their new home search online, why wouldn’t you leverage social media in your community?

Obviously, when viewing a National forecast, we understand that different markets will experience varying degrees of challenge. Where ever you are, It is more important now than ever to understand exactly what your buyers value and be sure that every dollar of house costs represents value to your customers. Then, you need to ensure that your sales team understands that value and conveys it in a skillful way that justifies the gap between your pricing and that of discounted resale homes.

It is no longer good enough to say that, “new is better than used”. The gap is too big and must be skillfully sold.

You can tell that there’s not a lot of confidence behind the feeling, but you can see it in their faces- there is hope. Builders and developers are a resilient bunch. There’s something American about it. There’s this thing of ‘hope’ that has done so much for us, as a country, in the past.

As sentiment is ever-so-slightly changing and prospects are beginning to feel like it may now be the time to buy, sales and marketing efforts need to be careful to support it. There are stories released everyday from reputable sources that cite so many reasons that now may be the right time to buy.

Marketing needs to be reflective of this recent news and sales collateral should be updated with good news almost daily. Now is the time, if ever, to grab news articles and press releases and use them to support a buying decision. There’s a feeling like we’re on our way up and we need to help build that feeling.