As I sat in front of the second customer in a two week period last October that told me “all home builders are the same,” the brutal reality came crashing down on me: Everything Has Changed. Yes, I was working with a well known, well regarded 30+ year home builder, but, to the customer, we were just another price quote. Between 2004 and 2007, every rule has changed. Indeed, it’s time for a Revolution!
Prior to writing this article, I went back and reviewed an article I wrote in November of 2006 called Seven Ideas for 2007. The article had many good, solid, boilerplate ideas that are still relevant for 2008. The problem is, even though the information is only one year old, it’s no longer enough for a year of changes in our new home market.
Are you angry?
Are you angry yet? Everything you knew (or thought you knew) has changed. And don’t give me the standard ‘this is like it was back in the early 80’s’ hyperbole. Our current climate has absolutely no similarities to that market (think interest rates, unemployment, media, lending and national home builders). The reason I ask if you are angry is because angry people are ready for a Revolution. Angry people are ready for change. Think 2008 is doom and gloom? Think again. Think opportunity.
Idea #1- Burn Baby Burn. In 1519, Capitan Hernando Cortes and a small army left the Spanish held island of Cuba and set out on one of the greatest conquests in the history of the world. Cortes was going to accomplish his goals no matter the consequences. He put to death some of those who opposed him, got himself appointed Capitan-General in order to get out from under Diego Velazquez’s authority, and even destroyed his fleet in an attempt to motivate his men to adapt to his at-all-costs attitude. The destruction of the ships has been widely studied and is still debated today.
Here’s the idea: In – in order to move forward, you can’t go back. The first list you need to create in 2008 is your “Stop Doing” list. I suggest:
1. Redefine who you are today and what you want to be tomorrow. The market will not build your business for you now or in the future.
2. Stop focusing on your houses (more on this later).
3. Stop treating your customers as you have always treated them.
4. Stop being ordinary (much more on this later).
5. Stop holding on to ideas that worked in the past.
6. Stop worrying about failure and fail forward fast.
Past Success = Enemy of Future Success
Idea #2– Your competition…today. Think mass retail with me for a moment, specifically discount store chains. On one end we have Wal-Mart (low price leader) and on the other end we have Target (more expensive but a pretty cool shopping experience). The problem with the majority of home builders today is that they fall into the Kmart category (stuck in the middle). They’re not as cheap as the national home builders, yet there is absolutely nothing compelling about their home designs or the customer experience. The customer looks and says, ‘they aren’t the lowest price so I won’t buy them.’ Thus we believe that we have a price problem when we really have a differentiation problem.
Your biggest obstacle to overcome is not the competition down the street. Your obstacle is the customer’s indifference toward your homes and the experience (or lack thereof) you provide.
Idea #3- Design please. “If a product’s future is unlikely to be remarkable – if you can’t imagine a future in which people are once again fascinated by your product – it’s time to realize that the game has changed,” Seth Godin from the book Purple Cow .
“The best design solves problems, but if you can weld that to the cool factor, then you have a home run,” Mark Schurman of Herman Miller, manufacturer of the $750 Aeron office chair.
Here are your design questions for 2008. What one thing does your home have that is the absolute best in the micro market you compete in? What problems will your home(s) solve for the customers you serve? If you can’t walk through your home(s) and answer those questions, how will your customers be able to?
Idea #4- Brand=Talent. “It’s been said that the most important decision an organization can make isn’t what to do, but who’s going to do it. That means that before you charge headfirst into the changes necessary to take it to the next level, you’d better decide if everyone on the train is really on board with their entire heart and soul,” Joe Calloway from the book Becoming a Category of One.
A lot has been written about branding your company over the years. Your brand is not an external thing created by an advertising campaign. Each individual within your organization creates your brand by what comes from their hearts.
Therefore, do whatever you have to do to keep the most talented folks around and don’t be afraid to weed out those that don’t fit into your revolution.
Idea #5- Go Green (just don’t pay more). According to Renegade Marketing, “Going Green” is a top 10 marketing trend for 2008. The good news for most homebuilders is that many of their current practices and products are already green. They just aren’t advertising it.
About 40% of the consumer market is interested in products that make their home safer, use less energy and tread lightly on the earth; they just don’t want to pay more for it. And when you do find the few people that will pay more, the payback needs to be in five years or less. Here’s the idea: Show them what you are already doing that is green (even if everyone else is also doing it). Think 2X6 exterior walls!
Idea #6- What are you selling, really? It’s a home, not a house, right? If you think people buy your homes because you are a “quality” home builder, think again. In today’s economy, every home builder brings a quality home to the marketplace. The builders that don’t are gone or will be gone soon. Quality is an entry level factor.
If your buyer’s are not buying a “quality” home, then just what are they buying? I suggest they are buying an emotional connection to your brand through a personal relationship.
In 2008, the salespeople that will sell the most homes are the ones that will discover more about their customer’s problems and get closer to them than anyone else. These salespeople will create an individual, thoughtfully staged experience and transform their customers ONE AT A TIME.
Don’t think marketing to the masses.
Think marketing person to person.
Idea #7- Women Rule! For any man reading this, let’s take a crash course:
- Women are directing the finances in nearly 70% of all U.S. households.
- Women purchase 62% of all new vehicles and influence another 30% of decisions.
- More than 80% of NFL products are sold to women.
- Women make 83% of all consumer purchases.
- Women directly purchase or have controlling influence in the purchase of 91% of all new homes.
Women in the U.S. make up the largest economy in the world. Need any more proof? A recent article in the Star Tribune about the buying habits of women vs. men when it comes to luxury cars reveals some stark contrasts. “Ask a man what automotive luxury means and chances are he’ll mention horsepower, handling and gadgetry. For a woman, there’s nothing more luxurious – in cars as in life – than safety, service and being taken seriously.
Are you designing homes and experiences that appeal to the women in your target market? Revolution me boy!
Idea #8 – Believe. At a seminar a few years ago, I learned there are four types of people in the workplace: the critics and the skeptics, the laughers and the mockers, the perplexed and the believers.
In my work with home builders and their sales staffs I am privileged to work with some believers. These folks get it. They believe in the systems I teach and they implement the strategies on an on-going basis.
They sacrifice daily and understand they can’t be all things to all people but they can focus on, say and do one thing. They become absolutely excellent at it. In other words, they do small, remarkable things on a daily basis.
“Don’t be boring. Safe is risky. Very good is bad.”
– Seth Godin
“Blame no one. Expect Nothing. Do something.”
-Bill Parcels, 2 time Superbowl Champion Head Coach
Happy Selling and Happy New Year!