Know ‘where to hit' to make the most of your business
When I was a boy, my father told me a story I've never forgotten:
The landlord of an apartment building, woken in the middle of the night with complaints from freezing tenants, struggled for several hours trying to get a big old boiler heating system to come back to life. Exasperated, he finally called in "Bob the Boilerman" to repair the beast.
Bob quickly arrived, and without any words, studied the boiler for several minutes, turned to his toolbox and pulled out a hammer. Carefully lining up the hammer on a spot on the boiler, he swung it back and then hit the machine with one loud smack. Miraculously, the boiler roared to life.
Bob pulled an invoice book from his pocket, scribbled on the page for a moment and handed the bill to the landlord.
Studying the invoice, the landlord looked at him in disbelief. "You're charging me $101 for this? You haven't been here five minutes and all you did was hit it once with your hammer!"
Bob calmly responded, "I only charged you $1 for hitting with the hammer, the $100 was for knowing where to hit."
A simple story with a powerful message that applies to almost everything we do. With markets cooling after several years of tremendous activity, where will you "hit' to make the most of your business?
While many in real estate remain paralyzed by the storm clouds, I believe that now's the time to focus our attention on the silver linings-opportunities to take our businesses in profitable new directions. Some of the good news is that a number of these silver lining opportunities can be found right now in working with builders, developers and new home buyers.
So what's driving these opportunities in new home sales?
The key is that unlike individual sellers, builders are running a business that depends on consistently selling homes. While many resale sellers will simply take their home off the market and wait for conditions to change, builders need to keep the sales fires burning-good market or bad. What this means today is that as they seek new solutions to drive sales, more builders are opening their doors to cooperation with real estate professionals than ever before. Let's take a closer look at one of these opportunities.
Marketing-Driven Approach
More builders are recognizing that it takes specialized skills, talents and resources to develop and manage successful new home sales and marketing activities. Small and medium sized builders in more and more markets find themselves competing with the big boys. And it's no fun. These larger builders often enjoy substantially larger marketing budgets and the ability to bring true professionals to the task, whether hired executives or top marketing consultants.
For too long, smaller builders have underestimated the power of quality marketing. Instead they believed that offering the right product at the right price in the right location would bring buyers to their doors. It's the "Build It and They Will Come" school of marketing. And that approach is simply not enough. In fact, without the proper marketing skills and planning, most will find it impossible to identify the right product, price and location-let alone attract enough prospects and close enough sales.
In today's environment, we need to adopt what I call a "marketing-driven" approach. This involves adopting a marketing focus from the very beginning of project planning, from the gathering of market research and the development of targeted marketing strategies to advertising, on-site sales, customer service and more. Builders must work side-by-side with marketing specialists all along the road to construction and beyond to assure long-term success.
Sales & Marketing Subcontractor
One of the most powerful concepts I share relative to this marketing-driven approach is that we must position ourselves in the eyes of the builders and developers as "Sales & Marketing Subcontractors." This is a term I coined almost 20 years ago to describe the role of the real estate professional in a way that made sense to builders. Rather than looking at our fees as unnecessary added costs, we position ourselves as the most effective and cost competitive source of services and resources to assure sales success. Just like carpenters, plumbers and other trades, we bring the specialized knowledge, skills and tools to develop the highest quality performance at the lowest overall cost.
A builder friend in the Carolina's recently described to me a new project he's developing that will include roughly 400 homes to be built over a three-year time frame. Although he's run his own sales teams for years, this time he's taking a different approach.
"I'm subbing out all of my sales and marketing on this one," he explained, "in the long run, I'll have fewer headaches, better cost control and be able to focus on doing what I do best."
Surveys over the last several years have found that builders are increasingly turning to the real estate community for cooperative solutions to increase their sales success. If you develop the knowledge, skills, systems and strategies specific to the new homes arena, you'll be positioned to recognize and take advantage of some tremendous opportunities. Be assured that in 2007 and beyond, builders, developers and new home buyers will be looking for someone who "knows where to hit" and that may as well be you.
Based in Newport Beach, California, Dennis Walsh & Associates, Inc. specializes in training and sales tools specific to new home sales and residential construction. More than 30,000 real estate professionals have participated in their Certified New Home SpecialistTM and Residential Construction CertifiedTM certification courses. For more information, visit www.sellnewhomes.com or call 800.428.122.
