Let’s face it; the economy is tough right now. If you are in the custom home building
business this is no great revelation.
Denying it, ignoring it or even worrying about it won’t do us any
good. Builders need not despair. Better times are coming, but how can you
survive while waiting for the economy to turn around? You must realize that new homes are still
being built. While the number of new
housing starts has declined dramatically, and there is excess unsold inventory,
people are buying new homes. Maybe they
just aren’t buying yours. Let’s examine
what can be done to improve your chances of attracting new customers to your
business, because after all, running a custom home building business is not
much different from running any successful business.
First, take an assessment of what makes you different from “Builder X”
down the street. You have a set of
unique qualities, experiences and skills that you draw upon when building a new
home. What makes your homes different
from your competitions? Do you offer
more square feet for the dollar? Is your
niche offering the very highest quality upgrades? Is it your creativity and ability to make a
new home match a historical architectural period? Do you offer a limited number of floor plans
but always come out on time and under budget?
You must fully understand what sets you apart from your competition
before you can effectively articulate it to your potential customers. Once you understand what makes you unique,
you can begin formulating a plan to best inform your customers of what you do
Second, after you have determined exactly what you do best, it’s time to
decide how to pass this message on to your customers. Many builders have what I call “Yellow
Fever.” This is an illness that strikes
many small business owners causing them to invest all their advertising dollars
into telephone book “yellow pages” ads. Often
pushy sales reps up-sell small business owners into increasingly larger ads,
taking more and more of their limited advertising budget. Telephone book advertising makes sense, but
only as a small part of your overall budget.
Don’t put all your eggs into one basket regardless of what advertising
sale reps tell you. Newspaper ads still
work well for some older demographic groups, but those under forty are more apt
to get their news from other sources like the internet. The internet works well for these customers,
but running ads on Google or Yahoo can be very expensive. Be sure you know exactly what you are doing
before you venture there. Why not start
by honing your message with a direct mail piece? Consider using a company like Valassis to
send a one page targeted ad to a zip code with the demographics you want to
reach. Change your ad and try again in
another zip code and chart which one works best for you. Check out local cable television
advertising. Spots are often available
at a relatively low cost per ad, and allow you to re-write your message with
simple voice over changes until you get it right.
Third, don’t be afraid to negotiate.
I will never forget the look on my wife’s face the first time she saw me
walk into a hotel and negotiate the price.
She was shocked, if not horrified to hear me say, I think I can get a
better price than that, is that the best you can do? Her frown quickly turned upward when I saved
us $50.00 on the hotel room that night. It’s
the same way with advertising. Unlike
other products, cable television and newspaper advertising cannot be saved and
sold another day. They have deadlines
that can work in your favor, but you have to ask for a discount.
By assessing what you do best and properly informing your customers, you
have a much better chance of getting your share of the limited market. Have you ever noticed that the builders who
are always busy do not necessarily offer the highest quality homes for the
money? But you will find that the
busiest (and wealthiest) builders are the ones that best promote
themselves. Make sure your potential
customers know who you are and what you can do for them.