Question

Topic: Advertising/PR

Advertising Not Making The Phone Ring!

Posted by Anonymous on 4/16/2009 at 6:52 AM ET 500 Points
I am a medium contractor (the area's largest) in a 4 county area (rural/light manufacturing for auto industry). We build custom residential homes. The draw to the area, aside from local residents wanting to build, are a series of lakes. Lake homes owners (second homes for most of them) come from surrounding larger cities (1-3 hours away) where I cannot afford to advertise because there is no cost-effective way to target and reach these select individuals.

My company spends significant amounts on advertising in this local area (signage, billboards, real estate guides, some newspaper, professional website with SEO). The idea was to create a "net" to capture awareness and possibly interest when potential clients come to visit the area (self-selection strategy).

Some other points of interest:
- There are no new significant competitors.
- There is little market demand for building today (only 10 countywide new housing starts).
- I have even introduced (very recently) an aggressive warranty program that tops anything in the market.
- Perception of my firm is that we build quality/luxury homes but they are pricey.
- We offer design/build services trying to capture the customer at the beginning of the homebuilding process.
- Realtors don't help; they want immediate rewards (i.e., commissions (6%) from the sale of a used home instead of negotiating a commission from me and not seeing it until the construction is complete. Believe me, it's a mind-set that is impossible to break even with offering a portion of the commission up-front.
- I consider advertising to be a support tool with most of my business coming from referrals in the past. My building standards are superiors, so I do not believe it's a product or poor quality problem.

Any ideas on how to get the phones ringing again?


About a year ago, the phones began to stop ringing. I can blame part of it on the economy
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RESPONSES

  • Posted on 4/16/2009 at 9:19 AM Member
    Advertising is always ,always a great idea even when the economy is down!

    Try switching the focus. Given these times, it will be extremely difficult to motivate ANYONE to buy. Keep your eye on the prize!! Focus on being the first builder they think of. You may not be able to motivate them to buy now, but you can motivate them to think of you "first" when they are ready to buy.

    With regards to advertising locally, it reminds me a little of preaching to the choir. While I hesitate to say you're wasting your money , I will say choose the market you forsee the most return from when the economy takes an upswing and saturate the hell outta it! It's better to completely flood one market than to pour a few drops over several markets.





  • Posted by Jay Hamilton-Roth on 4/16/2009 at 9:27 AM Member
    If you have a spec home that's sitting empty now, convert it into a vacation getaway prize. Have people sign up for a chance to win a week's stay - they provide the contact information in exchange for an opportunity. The week must be taken in 2009 and is first-come-first-served for picking a date. As part of the deal, you might offer them a free tour of the area (which would include a tour of the buildings you created), etc.
  • Posted by affordable on 4/16/2009 at 10:00 AM Member
    People generally are not buying many new homes and foreclosures are the driving force in today's market. Sounds dismal on the surface.

    However there are more opportunities today than ever in our lifetimes. What if you were to go after the rehab market until building demand resurfaces?

    Foreclosed homes almost always need significant repair before they are livable or even salable. Approach local banks to see if they have a need for a secure, repair and remodel contractor to help them move their inventory.

    People who are in a good financial position cannot sell their existing home for the value they believe it holds. These folks are a good target market for upscale remodeling and additions.

    Plus there has been no better time in history to build a new home. Land prices are depressed, interest rates remain the lowest in my lifetime, builders and subs are struggling and therefore willing to work at much lower prices than previously.

    I would market the heck out of this last point. Smart buyers know these facts. Fence sitters need a push to understand. Your clients will thank you for the thousands they saved by building today instead of waiting for the market to recover.

    Back in the early 1980's the real estate market was as bad as it is today. Interest rates were in the upper teens. Nobody was buying or building. Foreclosures were nearly as high as they are today. We were building duplexes and townhouses for rental. These ultimately were hugely profitable years for us as we were going contrary to the general feeling that real estate was a losing game.

    Tim Ballering
    Affordable Rentals Milwaukee

  • Posted by telemoxie on 4/16/2009 at 11:43 AM Member
    Would these lakeside areas be a suitable area for corporate retreats ? If so, could you partner with companies which organize corporate retreats, so that you can expose top corporate executives to the beauty of these lakeside areas?
  • Posted by Tracey on 4/16/2009 at 12:50 PM Member
    Jay, Tim, and telemoxie have some excellent ideas. I actually disagree that advertising is always a good idea -- I think that's only true if you have enough capital to continue to spend on ads while riding out a recession, which we don't know how long will last. If you have enough capital to ride it out, you can steal market share for sure, but if you don't, you have to change your business.

    Now might be a good time scale back on the traditional advertising and to scale up on business development or other low-cost forms of marketing. What other types of businesses serve the kind of clients who can afford your homes? Maybe having a partnership, or extremely targeted marketing to, businesses like personal assistant businesses might help.

    You could offer a "familiarization tour" to personal assistants or other businesses that cater to your type of client. Basically, give them a free night's stay in one of your nicest homes. Maybe throw in some goodies or a dinner if you can afford it. Then educate them about your homes, and any special offers you have. You could partner with other businesses to provide more goodies for your familiarization tour, too. Like a boat rental company - they could offer a free lake tour or something. Good luck!
  • Posted by CarolBlaha on 4/16/2009 at 1:23 PM Accepted
    I sincerely doubt your well of clients has dried up. I am in a related field and my business is consistant. In fact, numbers are slightly above last year.

    But I am not the average bear -- I get out there and bang on doors regularly. In this economy, you just market differently. You have to be more aggressive. So, don't worry about making the phones ring, worry about making sales. Go out and pound the pavement. Network. Get on the phone and make some calls.

    New homes sales are turning. My home is on the market and our realtor is very optimistic. Inventory levels are dropping. And with interest rates in the 4's, people will buy. But I agree with you-- most realtors don't sell. They just walk people around on tours. They watch those home decorator shows and think their designers. Those shows aren't about design (my first degree is in design). This week we've had 10 people come by -- and its only Thursday.

    In my biz, when people don't buy new, they cocoon and remodel-- so that when the market turns, they can either sell their home-- or they decided to stay and make their home more livable.

    The co's I work with that made their whole biz model for new construction are down. But those who have a mix of new, existing and commercial are doing just fine.

    Sell Well and Prosper tm
  • Posted by marketbase on 4/17/2009 at 3:04 PM Member
    I, too, am not a huge fan of advertising, especially when there other marketing strategies to depend on. Put $ into research and new ideas. Consider surveying (hire a college marketing intern for it) custmomers who have already purchased homes for 1) why they bought, what they like best about the(ir) house; 2) what problems they dislike or have problems with in the house design/amenities and 3) ask for references of family members or friends (near or far).

    I agree about the billboards and 'preaching to the choir' comment. Time to put money into one-page flyer and developing a 'suspect' mail/email list.

    Testimonials from #1 above would work great for this or a website, if one is not already available. #2 allows you to change possible problematic design or brands before doing another house...

    jag
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