Realty Times May 14, 1999

New Home Marketing Firms - What Do They Do?
by Dena Kouremetis

So I'm standing there with a glass of Merlot in my hand making small talk at a modest social gathering. (Who made that rule that we always have to stand, any way?) I am surrounded by administrative types, engineers, stay at home moms, computer nerds -- you name it. And one of them looks at me and says, "And what do you do?"

A glaze comes over my face, because the answer will not be created in a two-word description. I figure I can give them my 25 cent format or launch into a soliloquy, which makes me sound like some kind of superwoman working with some truly brilliant people in a dynamic little cosmos all our own. (I'll probably opt for the former under the circumstances). Marketing. Everyone has heard the term, but so many people (including myself) weren't quite sure what to do with it in a semantics sense because it can mean so many things. In the real world, marketing can mean anything from those goofy Calvin Klein ads you see on TV to the elaborate display of shower doors at Home Depot, to the brochure you walk out with when you shop for a home computer. But what does marketing mean in the new home arena? Doesn't a builder just buy the land, pick some floor plans, throw the model homes up and hope for the best? Hopefully not. Now that I have become immersed in the world of new home marketing for builders, I can definitely say "it ain't so" when people talk about how easy it must be to sell houses from model homes.

My perspective on this has been altered and fine-tuned since leaving the on-site sales office atmosphere and being allowed to look at the bigger picture of new home marketing. The new home salesperson is getting the "end product" of months of feasibility studies on market positioning and perspective, product presentation scrutiny, pricing analysis, and hair pulling over modifications to the original plan when a marketing firm has been involved in the builder's homes.

The two most typical scenarios for new production home sales are the "in-house" sales and marketing staff (hired by the builder to work directly for their firm) or engaging the services of a marketing firm, which specializes in just about all aspects of the builder's homes except physically building them. They may work on a consulting basis only, offering part of their services (like feasibility studies) to the builder. Or, they may be involved in everything from land acquisition to hiring sales staff, merchandising and furnishing the model homes, to creating printed collateral materials and advertising themes, and advising the builder on a constantly changing market.

This permits the builder to do what it's best at (building homes) and the marketing firm to do what they are best at (marketing and selling them). It can be a marriage of expertise in both camps, and the combination can be tough to beat. That may be because of the marketing firm's accountability factor. When a marketing firm has been hired to "get the homes sold", and hasn't figured out a way to do that, they generally don't get to stick around, nor do they get much more work once the word gets around. By the same token, if a marketing firm continually strikes gold wherever its touch is used, it can make a huge difference in whether a builder is consistently profitable.

One of the biggest advantages a marketing firm can offer is its continual sense of the competitive market place. The savvy people (and I am the novice here) who make the firm truly "tick" can keep its client informed on which new builders are coming in to town, do espionage on what the competition is building, find out how soon they can officially begin selling the homes, and determine what this may all mean to their client's position in a particular area. They can also recommend floor plans, as well as changes to the builder's current product that may increase its marketability. The goal of a new home marketing firm is to create a symbiotic, or "seamless" operation with its client, so that the general public doesn't even know it exists. In general, it tries to make a "superstar" of its client, standing in the shadow of the entity that delivers the dream they help to create.

In the end, however, it's all about minimizing risk for the client-builder. This can take lots of intuition, experience, and, sometimes old fashioned luck. Once it's fixed, why break it? If something in a marketing sense has worked well for a builder with its particular product or area, the marketing firm may advise the builder against "re-inventing the wheel" each time it builds new homes. It may also advise the builder that it's time for a newer, more innovative product or marketing approach, and help to create a new "niche" in the market place.

So, whether you liked it or not, you got my soliloquy on what it is I do. And I have lived to write about it. But, now that you have gotten this far in my explanation, you'll know why I tell people: next time you see me at a cocktail party, don't ask . . . . .

Also See:

  • Builder Espionage: How Sales Associates Keep On Their Toes


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