Leading New Home Builder Listing Websites Ranked by Compete.com

I have been playing around with compete.com. I like it. I wish it did a few things that it does not. However, it seems like a worthwhile tool. Here’s a sample report showing the leading new home builder listing websites in terms of traffic. The Largest new home listing site is NewHomeSource.com by a wide margin. Move New Homes should be on this list, but Compete does not allow me to get down to the sub-domains of Move.com.

A Builder's Summer Reading List

Summer is upon us. Now would be a good time to select a few books for your summer reading.

Every so often, friends, knowing I am a marketing junkie, ask me about my favorite marketing books. More often, I attempt, usually unsuccessfully, to explain a marketing concept sourced from a great marketing mind. Many of these concepts have real world application for homebuilders. This month I share with you my favorite marketing books and the reasons why they made it to my list.

All these books share a number of features. First, they get to the point and state marketing principles in a straight-forward way. Second, they are relatively short. I can't stand verbose writing and am too ADD to put up with a slowly developing theme. Finally, I believe they are valid and relevant to builders. Here are my top 10 marketing books:

1. Wisdom of a Genie by Jack Trout. Jack Trout is one of the great marketing thinkers of all time. He got us all to expand our thinking about the 4 P's to include "Positioning" as a 5th P. What I like about this book is that Trout boils down his decades of marketing knowledge in a fun, quick read written as a parable. If you are an operator and don't want to get snowed by your marketing chief, this is the book for you.
2. The 22 Immutable Laws of Marketing by Jack Trout. Trout brings simple marketing rules that help you clarify your thoughts and think through many a marketing conundrum. He explains why it's better to be first than better and many other great marketing truths.
3. The Regis Touch by Regis McKenna. Regis McKenna is probably one of the most successful technology marketers in America. His McKenna Group has been instrumental in some of the great technology marketing stories. Credited with coining the term relationship marketing, he explains the concept in an easy to implement manner.
4. Ogilvy on Advertising by David Ogilvy. Ogilvy is considered by many to be an advertising genius. He is the man who also brought us so many classic quotes such as "50% of all advertising is wasted. The only problem is I don't know which half." There is lots of great information in a super package.
5. The Innovator's Dilemma by Clayton M. Christensen. This is a must read for anyone curious about why industry leaders are rarely at the forefront of innovation.
6. Purple Cow by Seth Godin. Many of Godin's books are among my favorites. He was made famous with his "Permission Marketing." He argues that safe is risky. Because of the clutter out there, you have to be worth remarking about. That's where Purple Cow comes in.
7. The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell. Gladwell does a good job of explaining how ideas spread through populations. It gives us clues about how green building and other new concepts spread through consumers.
8. Unleashing the Idea Virus by Seth Godin. In many ways Godin builds on the ideas of Gladwell, but gives us very practical methods for making word of mouth happen using interactive tools. As a special bonus, this one is free. Download this book free.
9. All Marketers Are Liars by Seth Godin. Godin brings all of his writing together to explain how our stories drive marketing success.
10. Why We Buy: The Science of Shopping by Paco Underhill. Underhill, through scientific observation, explains why your front-and-center merchandising is utterly lost on many shoppers. A bit dense, but if merchandising is part of your job, you will want to read this one.

I hope you enjoy reading some of these that you might have missed. What did I miss? Drop me a line and let me know who you think I left off at kuhnen@earthlink.net or 817-658-7698.

Homebuilder Online Lead Conversion Rates

Several builders have asked me "What should my online lead conversion rate be?" and it is a perennial favorite when I speak about online sales counselor (OSC) programs. This month I share with you a few guideposts you can use when setting up your initial goals and expectations.

There is not a specific lead conversion rate target for a best practice OSC program. Every builder operates with a different set of variables. Some of the factors that affect your conversion rate include:

1. The strength of your market - hot markets get better, more complete leads
2. Your calls-to-action - a good offer gets consumers clicking
3. The usability of your website - if they can't find the button, don't expect them to use it
4. The quality of leads - leads from your own website are always your best leads
5. The effectiveness of your lead handling process and your on-site sales force.

Does this mean, there is no answer? Let me share with you a starting point.

Breaking it Down

To get one sale you need physical traffic units. My work with builders with active OSC programs suggests a closing percentage between 25% and 35% for appointments set by your OSC. Start with a goal of 25% (1:4) and go from there. You need just 4 appointments to generate a sale.

To get an appointment, you need dialogs with leads. Start with a goal of 50% dialogs turning into appointments or (1:2). So, you need 8 lead dialogs at this point. If you confirm your appointments the night before, you can expect at least 80% of the appointments to be kept. If your ratios are heading in the wrong direction, make the handoff to the onsite warmer with a 3-way call.

Unfortunately, not everyone will want to talk with your OSC no matter how well they write emails and how strong their phone skills. A good starting point is setting a goal of 15% to 20% of leads turning into dialogs, or about (1:6). So, it takes about 50 leads to generate one sale. That is a 2% closing ratio. Is 2% bad? It depends. Good OSC's often tout ratios twice as good or as you are about to learn, significantly better.

It's important to start measuring these variables and try to improve where it makes sense. The real question is not how do I compare to some national norm, but are my ratios heading in the right direction. It's about focusing on improving your ratios.

Let's keep going up the marketing channel. How many website visitors will it take to generate 50 leads? I like to break this down into how many will respond to your call-to-action (i.e., click on a lead button) and those willing to complete the online form. A good form completion factor is about 1/3. Yes, 2/3 of users bail out after clicking on the link, but a good call-to-action can get people clicking. If 1 in 20 click to the form and 1/3 complete the form, count on it taking 60 unique visitors to generate one lead. In a good market, this can be as strong a 1 in 10, but 1 in 30 or 40 is still strong.

So, the bottom line is that you may need 3,000 unique visitors (60 visitors x 50 leads) to your website to generate one sale to a lead generated from your website. Where are you going to get your next 3,000 website visitors? If you are driving them there through search engine marketing and spending $0.50/click to get them there, it will cost $1,500. Improve your Internet lead follow-up process, and you can do better.

How Good Can You Do?

Mike Lyon, from Simmons Homes in Tulsa, Oklahoma is one of the best online sales counselors I have had the pleasure of speaking with. Simmons is the leading builder in Tulsa, Oklahoma and has reasonably good lead volume coming from their website, www.newhomesource.com, and www.move.com.

How important is the Internet to Simmons? According the Lyon, "We see an average of around 20-25% of our total sales volume as actual Internet customers." Let me put that figure in perspective, in hot markets with long interest lists, high percentages are common. It's not so common in the more pedestrian markets most of us live in today. By my calculations, Simmons is running at about a 6% conversion.

Where Lyon really excels is converting leads into kept appointments. His key is quick, consistent and personalized follow-up to each and every lead. "No lead is slipping through the cracks. When you couple that with a fast and personal response to an email request or phone call, customers will respond in the form of an appointment. That is the true measure - lead volume means nothing if you can't convert them into an appointment and ultimately a contract." says Lyon.

Lyon's appointment rates from leads are at my top range of experience. Does he have a secret of converting leads into appointments? He does, "Asking for the appointment. Sounds simple, but the bottom line is most OSC's are not asking enough. I ask for the appointment in almost all of my email or phone conversations." Maybe you should too.

If you have responded well and qualified the lead, then there is no reason you should not be asking for the appointment. Do this and see how strong your Internet lead conversion rates can be."

California Headache Continues

Last night I sent out a notice to a number of friends and colleagues soliciting their support for the Chicago Police Memorial Fund as a run in that city’s marathon in October.  One well connected supporter in California stepped up right away.  I took the opportunity to thank him and ask how the market was really doing.  He’s an optimistic guy by nature, so I will keep his name confidential.  This was his quote:

“Believe the press in certain parts of California - if you're within 25 miles of the coast you're generally o.k. (exception: downtown San Diego).  Anything inland is in trouble.  And the Central Valley is a total bloodbath. I see a huge number of small- to mid-size builders going under in the Valley.  They're fighting to stay afloat as it is, and that's without the flood of foreclosures that is coming around the bend with great force.”

My assumption was that we were only hearing the bad news.  Perhaps we still have a ways to go.  So, more than ever builders need to find ways to follow-up on every lead and traffic unit.  Consider also how you can drive other revenue.  Fulton Homes in Phoenix claims a 61% increase in options revenue after making some big changes in their options technology and processes.  See the article in TecHome Builder Online at: http://www.techomebuilder.com/news/19331.html.

Permission Marketing Made Remarkable

I ran across a service recently. The concept is pretty cool, but not the easiest to explain. As simply as I can put it, a reward program called HomePerks. Builders or Realtors or your gardener could sign up and start giving their customers or prospects HomePerks. These are in the for of points (HomePerks) and you can spend them on gifts or give them to friends. Okay, I think I yawned too. The company putting it on is a business partner and I would probably sit through a demo, but a lot of people would not. I not only went there on my own, signed up, surveyed the website, explored how the program works, and even found a few things to potentially buy. Let me share with you how they got me to do it. It was one of the best permission marketing examples I have seen.

The sales guy, let’s call home Brian, sends me an online certificate for 500 HomePerks with the promise that I can register in 60 seconds and redeem them for over 1,500 products. Well what do I do, on my own I go to the site (a very fine site by the way), register (generating a “Lead” for the person giving the Perks), and shop a bit. Slick, but no so slick as to turn you off. All I can say is, what a cool way to get a registration or generate a lead. Still a tough concept to sell, but remarkable permission marketing might help.

SEO Secrets for Homebuilders

Homebuilders are always looking for ways to drive traffic to their websites, preferably without added expense. While everyone seems to know that search engine optimization is important for homebuilders, most ad agencies and Search Engine Optimization (SEO) firms shroud search engine optimization under a veil of secrecy. Let's make SEO a little more transparent.

I believe SEO and Search Engine Marketing (SEM) should be part of every builders marketing mix. Here's the big SEO secret for homebuilders: You can do it yourself and even get a strong ranking. However, you may find it both easier and more cost effective to implement your SEO strategy using a third party.

I am not a SEO guru, so I took a crash course and got some excellent one-on-one coaching from Directory One's, CEO, Phillip O'Hara. O'Hara has been doing this for years and operates one of the largest SEO/SEM agencies in the Southwest.

Keep in mind that search engines like sites that are coded in basic HTML. Not really a secret, but many builders make basic SEO mistakes such as using flash introductions that can kill your chances for a good search ranking. Make sure search engines can see your site the way you want them to. You want your pages to be search engine friendly. You can check them using the Lynx Viewer. Go to http://www.delorie.com/web/lynxview.html to check your site. Also, make your site easy for the search engine bots to crawl. A site map page is a good idea for making it easy to crawl.

Assuming the search engines can see your whole site correctly, it's time to go to work and think about your SEO strategy. How are you going to end up at the top of the search result pages? You can if you stay targeted. Your chances of being #1 for "Real Estate in Los Angeles" is pretty close to zero, but you might be able to be #1 for "New Homes in Temecula." Assuming I build in Temecula, I know which search result click is more important to me. Okay, so how do you do it?

First off, you want to optimize for Google™. Why? As O'Hara put it, "The real traffic is on Google." In fact, 55% of all Internet searches are through Google. Compare this to 23% for Yahoo! and 8% through MSN. This makes the task much easier. While the algorithm Google™ uses to rank sites is a secret, some guidelines are clear.

Top 5 SEO Secrets for Homebuilders

I asked O'Hara to share with me his thoughts along the lines of: "If I had limited time, what would be the 4 or 5 things I would be certain to do to get a good ranking in Google?" Here's O'Hara's top 5 recommendations:

1. Your title tag. The title tag is the html tag that determines what is displayed in the "blue" title bar on your browser. Google™ relies heavily on this element. The key phrase you want to be found by should be there (e.g., "Preston Builders - New Homes in Temecula").
2. Place the exact string you want to be found by (e.g., "New Homes in Temecula") in an H1 tag in the first paragraph of your page and make that string BOLD. Use your CSS file to define the font style and size you actually want.
3. Add the exact string you want to found by to the "ALT" tag associated with the first relevant image on the page.
4. Let your URL say it if you can. A keyword rich URL such as: http://www.floorpop.com/SEO_Secrets_for_Homebuilders.html will probably rank higher than http://www.floorpop.com/FloorPop030607.html. Both these pages will be posted at http://www.floorpop.com. Come back in a month and see which is on top in Google™.
5. Continue to use your keyword strings in at least one or two other paragraphs including your final one. In the final paragraph italicize the key word string. You should have these words showing up regularly for a high ranking. http://www.keyworddensity.com can help you check your keyword density.

More SEO Secrets for Homebuilders

Can you do more? You can and should. When you hire a firm to do this for you, they do a lot more. My key SEO secrets for homebuilders recommendation is to focus on these five items as table stakes for getting a good ranking.

Keep in mind the goals of all search engines. According to O'Hara, "They want to give you the most current and relevant search results. They want living, breathing web sites to be ranked higher." Show them you are alive by updating your content regularly. Your tenure (how many years have you been in Google) as a destination is also important.

SEO secrets for homebuilders are not really different than for other sites. These top 5 are those that will yield quick results. If you have the time or a third party helping, you should consider doing the following:

• Actively encourage other relevant sites to link to you. Page rank is hugely important. Your importance as a source of builder or new home information is inferred from the people who link to you. As more relevant sites link to you, your page rank and your chances of ending up on the first page of any search increases. This takes time and effort, but is crucial for the more competitive key phrases.
• Place your keyword combinations in your keyword and description metatags. While metatags are not used by many search engines, older style search engines still consider them. It's easy and you only have to do it one time.
• Focus on the right keywords to get qualified traffic into your site. For most builders, these are "Builders", "New Homes", "Homes", "Community Names", "Builder Names" and "Place Names". Other words might include: "Real Estate", New Construction", "Communities", "Townhomes", and "Condominiums."
• Avoid doing stupid things that will ruin your search engine optimization efforts including: hidden text, doorway pages, automated submissions, link farms, key word stuffing or repeating content.

SEO Secrets for Homebuilders are not hard to implement, but it does take some time. Thankfully, it can be quite economical to outsource it

Video Online for Real Estate Going Mainstream

Video is expanding on the Web at a tremendous pace. It's not just for music videos and testimonials anymore. A few months ago I wrote about video on demand in "Selling lifestyle - when the structure is secondary," (see http://www.floorpop.com/Floorpop110106.html). While I no longer am directly involved in video production, I am a huge believer in the power of video online to drive action. This month I share with you current thinking from Web video experts and application examples in the real estate sector.

Video on demand (VOD) is probably the application that I am most excited about. I spoke with Tom Bevins, SVP at Crozier & Henderson / HotOn!® Homes to get his views on why builders are choosing video for their websites. "As the market has shifted it has gotten more competitive and builders are trying to connect better with homebuyers." says Bevins.

You may remember Bevins from his guest article for FloorPop last year, "Video on the Web: Generating Results," (see http://www.floorpop.com/Floorpop050306.html).

Why Video?

According to Bevins, "The Web is a multi-media destination. People expect more. This [video] is how homebuyers expect to receive information. There are some things you can do with video that you can't do with anything else, such as testimonials, such as lifestyle choices, such as demonstrating what your life is going to be like in this home and this community."

Builders do sell much more than four walls and a roof. What they are really packaging is a lifestyle for homebuyers. I find it interesting that builders will spend millions in land development, years of entitlement hearings, and carefully plan amenities, but seem almost reluctant to leverage these differentiators in their marketing.

How does it sell more homes?

When I speak with a builder about any new technology, it always comes down to one thing, "How will it help me sell new homes?"

According to Bevins, "VOD sells more homes because it represents the real product the builders are selling. When people understand the lifestyle that comes packaged with the house, as only video on demand can do, they arrive at a community and have already made decisions about it. They are more qualified. It more puts them further down the buying cycle, compared to someone who has not seen the lifestyle and amenities available to those who would like to live in this community."

Another way it helps sell new homes is the wide distribution it gets. Lots of home shoppers have the opportunity to see your video. You can always post your video content on your website or on Youtube.com, but new home portals are also getting on the band wagon. According to Brad Smith, Director of Rich Media for Builder Homesite, Inc. "This year New Homesource will add a video link icon to every community page."

Other compelling reasons for video online are demographic shifts toward Generation X and consumer preferences. According to Smith, "Video is something that we are used to. It's going to do what print and photos can't accomplish."

The Web is a multi-media environment. That comment is not meant as an excuse for you to use Flash animation on your homepage because it looks cool, but it is a reason to consider video, when rich media is a better way to communicate your message. According to Smith, "You have to hit the customer on every level."

Video Online for Real Estate

Here are just a few examples of how video is being used in real estate today. It is still leading edge for builders. I anticipate a faster pick up of this technology in 2007 driven by its unique capability to convey lifestyle, emotion, and a higher level of trust.

Here are some of the more innovative uses of the technology in real estate today:

Customer testimonials from Morrison Homes

Other than the repurposing of TV content for the web, Morrison was the first builder I saw using video online. This application for video testimonials is compelling.

Video on demand segment from Centex Homes

Centex has been doing this for a while and several other builders are adding video to their websites. With similar links coming online with portals, this category will take off.

Video sales presentation Podcast from Taylor Woodrow

Taylor Woodrow is way out there with videos you can download as a podcast. Here I am skeptical. While there may be some real estate agents who may want to see a short video on a particular spec home, I am not sure this use is going to live up to the hype.

Corporate recruiting video from Centex Homes

For a major builder like Centex, I think this is a very smart piece. One of the greatest challenges large builders face is recruiting. While critical for a builder like Centex Homes, video could be an effective tool for larger builders trying to compete with the mega builders.

A corporate positioning piece for NCI

NCI is a probably the largest publisher in real estate, but would you know that? They publish the smaller size magazines for new homes, resale, apartments, and active adult. Their other titles include Black's Guide (for commercial real estate) among others. Right on their homepage they have added a corporate branding piece that positions their company. I believe this type of corporate video can instill confidence in when prospects and/or potential employees are close to making decisions about doing business or seeking employment.

A warranty maintenance video for D.R. Horton

Is customer satisfaction important to the success of your homebuilding operation? What are you doing to communicate and add value after closing? I love this concept and believe every large builder should consider something like this. Every month you can touch your customer, remind them that you care after the sale, and encourage them to refer friends. The warranty maintenance cost reductions alone may be enough to pay for the piece. The marketing value is free.

Video online is here. Now is the time to consider how it may help you sell your communities.