Are We Primed for a Recovery?

News abounds on a daily basis that right now is the best time to buy a house. Interest rates are at an annual low, and today, the Fed moved into uncharted territory by taking its key rate even closer to zero, sparking optimism on Wall Street, which translated into a gain of 359 points by the closing bell on Tuesday. Could this translate into an overall better housing market?

Early Signs of Recovery

The Las Vegas Review-Journal is reporting that Las Vegas (one of the first cities to see large-scale foreclosures when the current housing crisis began) may be seeing the bottom of its housing market taking shape, as home sales improved and inventory was reduced in November. "It's the third straight month that home sales have doubled from a year ago," the paper said. Considering that home sales generally peak in the summer and dwindle as the year comes to a close, this is positive news. Keep in mind that a high percentage of these sales are real estate owned and short sales, however, once we work through this boom hangover, we should be seeing new home sales picking back up as well.

No doubt, as home prices plummet, it's a buyers market right now, but your customers may not necessarily be locals. The Los Angeles Times is reporting that "home-buying trips to America are becoming one of the more popular tour group packages in China." Lower housing costs have sparked this trend of cash-rich Chinese companies and individuals looking to buy U.S. homes as solid business investments.

Lastly, mortgage rates are finally catching up with all of the cuts from the Fed. 30-year mortgages are finally nearing 5%. According to CNBC, with the mortgage market showing signs of life, "it may be able to feed into other parts of the housing sector."

Be Nimble in a Down Economy

As more and more companies are forced to reduce their overhead to stay afloat, it may be hard to see anything but a dark cloud looming. However, news like we're seeing may point to a silver lining. Be prepared to take advantage of the market when it rebounds by utilizing less expensive marketing avenues in the interim, like banner advertising, pay-per-click advertising and social media promotions.

Create new ways to promote your home inventory, and then use online social networking tools, like Facebook and Twitter, to promote your new home specials.

As the market thaws, timid homebuyers will come out of the woodwork to take advantage of the great deals. Make sure you’re ready for them.

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References:

Bozzo, Albert. "Housing Poised to Recover But Still Needs US Help." CNBC. 15 Dec  2008.
"Fed Moving in Uncharted Territory With Rate Cuts." CNBC. 16 Dec 2008.
Lee, Don and David Pierson. "Chinese search for deals in U.S. housing market." Reading Eagle/Los Angeles Times. 14 Dec 2008.
Smith, Hubble. "Housing Market: LV homes sales soar in November." Las Vegas Review-Journal. 10 Dec 2008.

Keith Goode is the Search Engine Marketing Manager for Builder Homesite Inc. and can be reached at kgoode@builderhomesite.com

Mystery Shopping: Take the Mystery Out of Lead Management

If you haven't considered a Mystery Shop of your online lead follow up system (both human and electronic), you should. You may cringe at the results, but considering your investment in generating those leads, you need to know what really happens to them.

What if you have leads coming in and nobody is responding to them? Wouldn't you be upset? It may surprise you to know that not only does it happen, but it happens at some of America's largest builders.

Even if your leads are getting a response of some kind, you need to assess the quality of that response. Often an unprofessional response is worse than no response at all. If this is the first contact a lead has with your company, what kind of image are you projecting?

Online Mystery Shopping helps you ensure that customers have a quality online experience with your company. It allows you to assess your strengths and weaknesses, effectively train your associates, raise the bar on your communication skills, and increase sales. It should never be used to single out a sales associate, which is why it's so important to do a full market area shop.

There are companies that specialize in online Mystery Shopping, such as LM Marketing Online (www.lmmarketingonline.com) located in Houston, who works nationwide with builders of all sizes. The cost to obtain a comprehensive report, across all your divisions and communities, is well worth it. This also applies to custom builders, remodelers, and trade partners - anyone who has a lead generation system that includes a “Contact Us” page on their website.

The cost for an online Mystery Shop report is generally per community, so it will vary according to your size. Always ask about volume discounts. The minimum you should receive in the report is:

• an Executive Summary (including response rates and times)
• a complete transcript of all correspondence
• an individual response analysis
• a copy of all materials sent either via email or U.S. mail.

The report may also include suggestions for improvement and recommended implementation of Best Practices.

In today's challenging market, it doesn't make sense to invest thousands of dollars in a website to promote your company, pay listing services such as Move.com or NewHomeSource, generate sales leads, and then essentially throw them away. Remember, customers shopping online are building a short list, and you want to be on it. Some buyers buy via a process of elimination.

Don't get eliminated.

Erik Cofield, CGA has leveraged technology and provided business management consulting for all sizes and types of builders, developers and Remodelers since 2000, including volume, multi-family and custom, to help them improve their business. He is the National Accounts Manager with BuildTopia (www.buildtopia.com), a widely used international construction management software company. He is the Houston Sales and Marketing Council 2008 Associate of the Year. He is an author, educator, consultant and speaker. He can be reached via ecofield@buildtopia.com.

3 Biggies You Must Know in a Changing World

American industry has changed. In the 1940's we built smaller houses. Automobile manufactures built bigger cars. Airlines use to pay a distribution channel, called Travel Agents, reasonably well. Cameras used to use film.

Okay, we got it. Things change.

Like any period of change, some fear it while others look for a way to exploit it.  The important question isn't which one are you; you should already know that. The question is what are you going to do about it?

Want a bigger piece of pie? Make the pie bigger. Go sell houses to the types of people you never reached before. Or if your piece is still smaller, make it a very rich piece.

So, here are 3 concepts to consider:

1. Education is key.

You might think that you didn't go in to building homes to be an educator. Think again. Sales & Marketing is about education. Communicating why you are better, why new is better than previously owned, how to buy a house, and how to get a mortgage, etc., are all types of education. The list goes on. So, consider how you are educating, and start doing it better, earlier, in more places, and online (your web site) and beyond.

2. You already leverage technology. But, are you maximized?

The Internet represents a continually expanding opportunity. Paper has its place too, but make sure you are really using some system(s) internally and maximizing the Internet externally with pay per click (PPC) and search engine optimization (SEO) (and maybe paying extra to get your site to come up higher), especially if you are an Associate selling to builders or to consumers!

3. Take advantage of distributed workflow.

Lots of industries are experts at this. Airlines make you find the best price. Grocery stores have self-checkout kiosks. Banks have ATM's. You have to pump your own gas. And there are a hundred more examples. But those companies are making money by embracing and leveraging change.

Builders can do that too. You don't have to take warranty calls via telephone. You could flood your website with images, data, links, interactive sales tools, videos, and much more. You can utilize trade partners; not just their expertise, but their locations or other value-adds, like their inventory.

It's about communication and business management -- leveraging your human capital, using money (preferably other people's money), and taking action. You have to take action.

Now is the time. Re-Think, Re-Connect, Re-Tool.

Erik Cofield, CGA has leveraged technology and provided business management consulting for all sizes and types of builders, developers and Remodelers since 2000, including volume, multi-family and custom, to help them improve their business. He is the VP of Sales and Marketing with BuildTopia (www.buildtopia.com), a widely used international construction management software company. He is the Houston Sales and Marketing Council 2008 Associate of the Year. He is an author, educator, consultant and speaker.  He can be reached via ecofield@buildtopia.com.