During a question and answer session at a recent industry conference, a home builder asked Moody’s Analytics chief economist Mark Zandi for his thoughts about the labor
Large corporations pay billions of dollars a year to other large corporations to develop marketing strategies. They dissect demographics, fine-tune their target messages, run focus groups, test multiple ad campaigns and coordinate media blitzes.
Jim Foxx (top) began in the building business in 1972 and is now president of Foxx Homes in Palm Desert, Calif. His company might design and build only two or three homes in a year, or if he finds a prime parcel of land, it might design and build an additional 40 or 50 custom and high-end homes.
Dan Sater II (middle) has been a residential designer for 24 years, 16 of them as president of The Sater Group in Bonita Springs, Fla. He and his firm produce 40 to 50 luxury single-family designs in a year.
As co-owners of Moore Designs Inc. in West Bend, Wis., Lisa and David Moore (bottom) design and build 10 to 15 homes per year throughout southeast Wisconsin. Their business has evolved from midrange and move-up homes 17 years ago to homes that average $600,000 today.
Large corporations pay billions of dollars a year to other large corporations to develop marketing strategies. They dissect demographics, fine-tune their target messages, run focus groups, test multiple ad campaigns and coordinate media blitzes. That’s all well and good for the IBMs and Disneys of the world, but how do independent custom home builders, designers and architects market themselves effectively? How do they best sell themselves?
The four industry professionals here conduct their marketing efforts like many small but successful firms do. They do the usual advertising in local and regional media, put up signage on their homes under construction, and produce company brochures and Web sites. But just as every custom home has unique features, each of their marketing plans has unique aspects that contribute to their success.
Holding Their Attention
For Lisa and David Moore of West Bend, Wis.-based Moore Designs Inc., servicing their current and former clients is what they think will bring the most new clients through the door.
"The bulk of our work is referral-based," Lisa says. "At least half of our clients have always come from referrals, whereas only 25% say they came to us because of our advertising."
David points out that service is the key to getting those referrals, and they put a lot of their "marketing dollars" into that area of the business. For instance, if a client calls Moore Designs after several years wanting to know who can refinish a hardwood floor, "we will take care of it at a price the client finds very easy to swallow," says David.
Service like that, along with simple things such as periodic phone calls to all clients to make sure all is well with every home, keeps a builder’s name fresh in clients’ minds and results in positive referrals. "Spend the money on keeping your current clients happy," David says. "That has brought us more rewards than spending the same amount on advertising."
Dan Sater II says that when he started The Sater Group in Bonita Springs, Fla., he did what everybody does at first - a lot of legwork, "door-to-door" introductions with colleagues and traditional advertising to get his name out there. But he also did something different. He approached the editor of a regional new homes magazine and offered to provide design-oriented stories about the Naples/Bonita Springs area.
"I came up with an outline and hired a professional writer to polish it up for me, and it provided a lot of exposure for me at a very reasonable price," Sater says.
Now Sater has cultivated relationships with magazines, newspapers and writers around the country that use him as a resource and feature his homes. He also enters design competitions, which - with quality work - garner even more recognition. While he spends a significant amount of money photographing nearly all his homes, the exposure is worth it to Sater. "You’ve got to get your name out there, and there are more ways than one," he says.
Jim Foxx of Foxx Homes still uses legwork in his marketing efforts. He has established a successful company in the Palm Desert, Calif., area and still goes door to door - but sometimes the doors haven’t even been hung yet.
"Marketing, to me, is knowing your buyer," Foxx says. "My salespeople and I walk every home being built in the area that we possibly can because the features that are going into these custom homes are the features buyers in this area want."
Foxx also talks to every vendor, supplier and contractor working on luxury homes in the area and asks what’s going in them and what trends are developing. "Each individual luxury housing market is relatively small and marked by unique and very personal choices," says Foxx. "These people in the industry are fabulous sources of information."
The Moores, Sater and Foxx approach marketing from slightly different angles, but they all use traditional outlets to carry their messages: print advertising, job-site signage, brochures and Web sites. Yes, even though everyone is still figuring out how best to utilize the Internet, the Web has become a traditional marketing forum.
"I don’t see having a Web site in terms of being worth it but rather as absolutely necessary," Foxx says. "We sell ourselves as a high-end, technically competent design/build firm, and today’s consumer won’t buy that if you don’t have an effective Web site."
It can be tough for any small company to know exactly which aspect of its marketing efforts made the difference in a buyer’s mind. That’s why successful companies do every aspect. If one piece is missing, people notice.
A Lasting Image
"Marketing is everything you put out in front of a potential customer," Sater says. "Everything, from signage to Web sites to the design of your business cards to how your receptionist greets clients, points to your character and image."
And because this is a business in which the product is highly personal and customized to each individual buyer, image marketing is often more important than product marketing.
"We direct the bulk of our marketing to project an image of a talented design team that pays attention to its customers, rather than just show the homes we’ve already built for other people," Foxx says. "Where product marketing would help us sell homes we’ve already built, image marketing helps us sell homes we haven’t even conceived of yet. This will help ring the register for years to come."
David Moore agrees, saying that because every home the Moores design and build is different, they really don’t carry a product in the traditional sense of the word. "Because a custom home is so personal, how the client feels about us as a company is ultimately more important than how much they like the homes we’ve already built," he says.
Which brings him and his wife back to their original approach - servicing clients and making them happy. "We may rely on a lot of things to get them in the door, but once they’re in we want to make them comfortable," Lisa says. "We want to develop a real friendship with our clients."
That’s also what Foxx and Sater want, and what pure marketing hopes to achieve - a mutually beneficial relationship in which both parties’ needs are met. "Of course the strategy is to get them in the door," Sater says. "But you have to make them happy, or you’re not going to be successful."