How to Grow Your Volume by 10% without Competing on Price

If you are like most builders I work with, sales are off a bit. In a down market, we always struggle for ideas to improve our marketing. To maintain your volume and profits, you have to grow your market share. Unfortunately, other builders may have the very same goal. What if the pie were larger?

The new home sale market represented 22% of all homes sold in 2005 according to the 2006 National Association of Realtors® Profile of Home Buyers and Sellers. So, your largest competitor is the resale market. Could this share of 22% grow? Since 1999, the NAR survey showed new home sale share ranging from 21% to as high as 28%. A 2% share shift would mean a nearly 10% increase in volume for the new home market. But why would consumers shift their preference toward new homes?

The Relative Value Proposition Has Changed

New homes represent a better value than they did a mere five years ago, but most homebuilders pay little attention to this fact. Significant improvements in products, technology, and customer satisfaction leaves resale housing in the dust (see Your #1 Competitor is on the Ropes). Many advanced items in new housing can't easily be put into resale homes (e.g., house wraps, structured wiring).

We spoke with Sam Rashkin, Director of the E.P.A.'s Energy Star for Homes program, about some the benefits of new housing. "We have to really work on the marketing side to make sure this other great story [is told] about the persistence of value, long-term greater resale potential because homes are very hard to retrofit to this level of performance." said Rashkin. New products are shifting the balance of value and we need to communicate this better to consumers.

What if every sales agent communicates the same message to every prospect? What if that message were not only true, but was also obvious? Would most consumers accept the message? Well, this already happens today. What home shopper does not hear and accept that they are likely to have lower maintenance exposure in a new home relative to a resale home?

We can change the world, or at least affect the relative demand of new vs. resale housing, but only through a concerted industry-wide effort.

How You Can Communicate the Change

Of the 10 largest builders in the U.S., just 3 have any information that can readily be found on their websites about why buying new housing is better than the alternative. Centex talks well about energy efficiency, Lennar tells us mostly about their product attributes, and Ryland has a paragraph about energy efficiency. We sell ourselves way too short.

http://www.centexhomes.com/wccenergyefficiency.asp

http://www.lennar.com/build/buildhome.aspx

http://www.ryland.com/before-you-begin/new-vs-preowned.html

It is time to start communicating the superior value of new housing.

Perhaps these can give you some inspiration for things you can do on your website. For further inspiration, > let me share with you two video segments that will be seen by literally millions of new home shoppers who watch our HotOn!® Homes television program. Here they are:

View Green Building Video

View Old vs. New Housing Video

http://www.floorpop.com