Brought to you by the Builder Realtor Relations Committee of the Sales and Marketing Council of the Northeast Florida Builders Association
Q. How should Realtors and builders position themselves and/or their product to increase sales during a housing market still struggling to normalize?
A. It’s important to remember that new home shoppers are only motivated by one thing: WIIFM (What’s In It For Me?). It doesn’t matter a whit how much we want to sell them something, so long as we do. What counts is that we position ourselves as being sincerely interested in helping them solve their problem, meet their needs, deliver their dreams and make them happy with the product we offer and the service we provide.
When we first meet them, price frequently looms large in their definition of WIIFM. That’s normal, but it’s just flak. They have not found a new home or community they want yet, so all new homes and all communities exist in their perception as essentially equal, leaving price as the logical differentiator. When they do fall in love with a particular product, price recedes in importance. Just do your thing the best you can and hope you can convince them that there is a solid reason to prefer your product offering.
It helps a lot when there is a solid reason. For typical code-minimum homes in most any price range, there is frequently not much to differentiate one builder’s product from another’s. That sets up price as being the final decision-maker. Since the only way buyers want the price to move is down, that generally doesn’t make builders happy. It doesn’t help when Realtors encourage that sort of thinking.
Price is supremely important to builders, but meaningless to most buyers. WHAT!?
Think about it. Only cash buyers ever pay the price, and even for them it’s often just a number that has more psychological impact than financial. Convince cash buyers you have their best WIIFM answer and they’ll come up with the cash.
Everybody else just pays a down payment plus a series of monthly ownership and operating costs. There are ways to make that difference work for both buyers and sellers.
Q. Are there new effective ways to market your product?
A. It’s tempting to answer this question with a discussion of new media. However you slice them, they provide communication channels for distributing our marketing message, hopefully attracting and engaging customers in powerful new ways. That still leaves us with the question of what our marketing message ought to be.
Humor me, please, by allowing me to call your attention to WIIFM again. Some of us are manufacturers of a product and others of us represent those product manufacturers. It’s natural for us to think the product is the thing. We spend a lot of time talking about the product, building the case that ours is better. Truth be told, it’s often hard to back up that claim. That’s why builders get hammered on price.
Other than reading the answer to question No. 1 again, you might want to consider this concept: it’s not what the product is, it’s what ownership use and/or display of that product would mean to purchasers that counts. Powerful WIIFM propositions are built everyday on that emotional platform.
Q. What are the best ways for builders to gather feedback from Realtors? Should builders go back to focus groups?
A. Builders would do well to engage Realtors in meaningful conversation and when they do, to listen as well as talk. The reverse is true also. That’s why it’s so exciting that Rose Bock, MIRM, has stepped up to lead a NEFAR-NEFBA group to explore how builders and Realtors can better communicate and cooperate with one another for the common good. Want to make a positive difference? Get involved.
Q. What information should Realtors and builders seek to better help them sell?
A. In my experience focus groups work well when two conditions exist: No. 1, you genuinely want guidance and No. 2, your facilitator picks the perfect group.
Final tips from Bill:
Of course, builders and Realtors should be aware of national, regional and local economic and demographic factors that shape housing markets. They are important from a strategic perspective; opening doors of opportunity for some and closing them for others.
Other than that, we would do well to stop thinking and talking about “the market.” It’s a meaningless concept. The only market that counts is the next person walking into your sales facility. Please, give that person permission to buy. That’s what they want.