As the housing industry kicks off 2011 with, once again, cautious optimism for a better year, the Dominant Question (assuming this is the year it will actually BE a better year) becomes “What is the proper, profitable, intelligent balance between “cautious” and “optimism”?
Let me clarify that. How can we be cautious enough to respect the lessons from the last few years, and keep an eye (well, maybe two strong feet) on overhead and costs so that we can be flexible, nimble, and able to respond quickly to shifts in the marketplace without getting burned? On the other hand, how can we use our business savvy to best take advantage of optimism showing up in the form of increased traffic, increased sales, and a new breed of ultra-savvy customers coming our way? In other words, in a year when we can’t afford to miss a single sale, when “gaining market share” essentially means outsmarting our competition, when is the right time to be smart and invest into our company’s future, and how is the best way to do so?
Think Like A Consumer for a moment. Today’s retail-savvy potential homebuyer walks into your sales/information center, or contacts you through some form of online technology, and essentially radiates the Ultimate Throwdown: “Yeah, go ahead, MAKE me wanna buy!” And their brainwaves are simultaneously sending a signal which translates into “I’ve got a short attention span, not much (if any) urgency, and I’m not sure if I’m going to believe whatever you tell me. Nonetheless, I’m asking you to thrill me, engage me, draw me in, show me that you are different. I’m begging you to make this easy for me. Please prove to me, beyond a shadow of a doubt, that I should buy my new home from you. Please save me from a long, painful home search. Don’t lead me down this path only to result in a not-so-confident decision, and please please please, at the end of this journey, don’t make me sorry I decided to buy a home from you. It’s been a rough few years and I really can’t afford (emotionally or financially) to make a mistake.”
Think Like A Retailer: If you were selling cars or any other complex, expensive retail product and your potential (and potentially reluctant) customers were shopping all over town and even, gulp, painstakingly comparing your price to your competitor’s, what would be your next move? Are you going to beat the competition on price only? If not, (arguably, even if so) you better step up to the plate and start delivering on all those other, more emotional, levels? In other words, if you are not the cheapest game in town, then you better start proving why you are the Best Overall Choice.
Recently Big Builder Editor John McManus wrote “a subtle shift is occurring as builders’ concentration of sales begins to shift from spec to contract to build. Many of last year’s buyers preferred a ready-to-deliver spec house to one that had to be ordered to build. This year –perhaps because buyers believe that prices and value are stabilizing – even the home builders that specialize in pumping out specs are finding that people are opting for more of the home they want.” A few days later, John wrote “We’ve heard that in some markets, an increasing number of buyers are shifting away from spec purchases to build-to-order ones to get more of what they want in the home”
Are you selling in a market where there is a chance that NOW, or over the next 12 months, your buyers are going to “want more of what they want in their home”, and are you ready to make one of your homes their “Best Overall Choice”? Are you ready to differentiate yourself and prove that you are THE BUILDER who can meet that need…fully equipped, totally prepared, and off-the-charts-excited to help them create a home “just right for them”
Here’s five questions to help you determine if you are.
- Does your website send the message that you are ready, able, and excited to support your buyer’s desire to get the home they want OR is it unclear about exactly how (or where or when) the personalization experience might occur for them?
- Do your Sales Consultants know how to leverage the concept of personalization as a differentiating factor, and a reason to buy from you OR have they never been trained on this critical sales concept?
- Does your design center/selections environment inspire and excite your buyers and prove you are a professional, organized, leading-edge builder who is clearly devoted to creating the Ultimate Personalization Experience OR does it scare them into thinking that this process will be exhausting, overwhelming, and confusing?
- Do your model homes strategically showcase the Included Features and Available Personal Choices (“Options”) and properly prompt and prepare your buyers for the design center/home selections experience OR do your models waste this valuable opportunity to reinforce a major point of differentiation for your company?
- Do you have tested and proven internal procedures in place to ensure that the process of personalization will be a well-organized, stress-free, efficient journey for your buyers OR are you “hoping” you can handle the marketing, selling, ordering, installing, and getting paid for the multitude of items which go into creating a home that’s “just right for them”?
I promise you, the trend toward a personalized home is coming back stronger than ever before, fueled by the unstoppable global societal desire of today’s consumer to have everything the way THEY want it, to accurately reflect their own personal brand. If you were able to succeed in the previous market without satisfying this need, or with a haphazard approach to satisfying this need, it doesn’t mean you’ll be able to do that going forward, because, to quote the title of a famous business book by Marshall Goldstein (worth reading, by the way): “What got you here won’t get you there.”
I suspect that 12 months from now we will be able to name the builders who have won this delicate balancing game of “caution” vs. “optimism”. And I know that you don’t want to be scrambling in March 2012 to catch up to your competition who were better prepared for the early stages of the upswing. So don’t say I didn’t warn you. My next posts will provide details on how to ensure that your website, sales consultants, design center (or selections environment or process) model homes, and internal procedures tell your buyers you are ready, willing and excited to give them “more of the home they want.” Let’s start looking toward the future, with cautious optimism.
Do you want to steal market share from your competition?