Marketing Your Business

The Deterioration of Conventional Marketing
 
By Brian Flook, MIRM
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Q: It seems that some of the tried and true marketing tools I’ve used over the years aren’t working so well today; what’s the problem? Are the marketing tools for builders changing significantly?
 
A: Most marketing concepts and principles utilized today were introduced in the 1960s and honed to an art by men like David Ogilvy and Paul Rand. Marketing classes throughout academia taught the four Ps: product, place, price and promotion – a concept pioneered by E. Jerome McCarthy in 1960. So, if it isn’t broke, don’t fix it, right? Wrong!
 
Your assertion is correct; there really has been a gradual decline of effectiveness in traditional marketing. Before I address the traditional marketing tools, let me simply say this: the Internet is without a doubt a builder’s best source of marketing success. Do not ignore this invaluable tool. Let’s define traditional builder marketing/ advertising techniques as:
• Print media
• Telemarketing
• Direct mail
• Television
• Radio
All of these have strengths and weaknesses, but I believe that the weaknesses are outpacing the strengths in some cases.
 
Telemarketing has been virtually eliminated thanks to the provisions of the Federal Trade Commission's Telemarketing Sales Rules (known as the Do Not Call law). Many builders today do not recognize the serious ramifications of violating the Do Not Call law. First offenses can ring up fines as high as $11,000 if you have not taken steps to meet the requirements of the “SafeHarbor” provision. Our rights to call a consumerhave changed radically. Your phone is still a very important tool in selling new homes, but you better understand how to use it legally.
 
Direct mailers get real excited if they achieve a 2 percent response rate. That’s because 1 to 1.5 percent is the acceptable average. I don’t know about you, but on a budget – and we all have a budget – 1 to 1.5 percent doesn’t get me too excited. Unfortunately for most builders, we don’t send out direct mail to 50,000 people. More often we have much smaller audiences, therefore reducing the return on investment significantly. But I believe direct mail still has significant value in follow-up marketing. Reaching our list of prospects is far less expensive than huge bulk mailings. Focus on your list of prospects when doing direct mail and hit them hard and often. But make sure that you have a legitimate reason to contact them every time. And remember, every presale contact has only one goal: set up a meeting.
 
Television and radio have both suffered the effects of the “surfer” mentality. There’s no reason to listen to anything you don’t want to listen to… so we don’t. Channel surfing has become a cultural pastime. The use of radio and television are often all or nothing propositions for many small and midsized builders. That means that if you use radio or television, you have no budget left for print media. When you are trying to generate traffic, I view that as a risky proposition.
 
That leaves us with print media. In the housing industry, print marketing has held for years as the steady leader to attract “traffic” to our models and sales centers on a weekly basis. I believe that remains true, but the world is changing. I have heard numbers that suggest that the average American is bombarded with upwards of 3,000 to 7,000 advertising images a day. That includes newspaper ads, magazine ads, coffee cups with ads, Web site banners, shirts, signs; well, you get the point.
 
Consumers are saturated with advertising! But for most builders, the primary search corridor in your market is made up of newspapers and real estate publications of one sort or another. Stay in print, but focus on search corridor publications.
 
For decades, one marketing principle has held strong. It’s been called many things, but it is basically the same principle. It’s been known as the “Differential Demonstration,” the “Positioning Statement,” and more recently the “Unique Selling Proposition.” Simply stated, they all mean something very similar: what statement, proposition or demonstration compels a buyer to purchase from you and not your competitor?
 
Regardless of the medium of advertising, the unique selling proposition is your marketing message that should clearly communicate your very own distinctive and compelling selling point. It works, and you should know it. Builders often ask me, “Should I market my company’s USP or my community’s USP?” I believe that the answer lies in your objective. If your objective is traffic, market your community’s USP; if the objective is branding, market your company’s USP.
 
“But, what should I do today if all these other tools are struggling to reach my consumer?” you ask yourself. I believe that word of mouth has always been one of the best sales tools and is becoming more important today than ever before. The problem is how do you get others to “evangelize” your product? How do you create a real “buzz” as opposed to publicity stunt buzz? Here are several possibilities that will help you increase your referral rate, as we call it.
 
Train everyone in your organization to understand that they are in sales. Sales aren’t only going on in the sales center or model. Selling your homes occurs everywhere potential consumers encounter one of your employees, subcontractors, or existing customers. Teach everyone the basic concepts of courtesy, helpfulness, honesty, and product knowledge. Every encounter could be making or breaking a sale.
 
Is there a story about your company that clearly illustrates your approach to customer satisfaction and quality? If so, communicate it often. Stories are the age-old approach to teaching and memory retention. Everyone can, and will, relate your company’s story if it reinforces the positive value of their purchase.
 
Don’t abandon print media. Work harder to increase word of mouth “evangelism” of your homes. Keep improving your Web site. And remember, every customer encounter could make or break a sale.
 
Brian Flook, MIRM, has been involved with new home marketing for over 20 years and presently leads his nationally recognized company Power Marketing & Advertising, a full-service builder marketing and consulting company in Maryland. Brian is a licensed real estate broker, builder consultant and trainer. Reach him at bflook@powermarketing.com or on his Web site, www.power-marketing.com.