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 best.
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.