Better Days Ahead ... You Bet!

Who knows when this housing bump will end? I hope is soon because many families are being adversely affected. The lending situation seems to be the most difficult fix at this time. Most professionals acknowledge that there is demand, but getting cash for loans - construction and perm - is super difficult.

Hang in there, this to shall pass. It's been a long hard road to here, but we've got to find an end soon. Perhaps after the elections are over and someone new is in the White House, the major media will stop shoving every possible negative news clip down the American people's throats.

Best of luck to all my builder friends and all the associated businesses that suffer when the housing market is in the tank: (painters, landscapers, appliance companies, dry wallers, carpet stores, flooring companies, construction materials, electricians, plumbers, movers, settlement companies, developers, pavers, concrete companies, marketing firms, Realtors, mortgage lenders, window companies, insulation companies, inspectors, interior merchandisers, trainers, carpenters, and the many other organizations that are adversely affected because all the aforementioned ones are affected.

Housing matters!

Brian Flook

Brand That Home

Brian Flook, MIRM
Excerpts taken from Master What Matters©, 2008

“Is there such a thing as a branded builder?” The quick and nearly obvious answer is, of course there is. Are you sure? Often we think a brand is simply the visual representation or your company, or some vapor-like concept that forms out there in someone’s mind about your company. I’ve had countless builders say to me, ‘please help us strengthen our brand.’ Sounds reasonable, but unfortunately they don’t own a brand; they simply want to strengthen their reputation and name recognition.

For more than 4,000 years, branding has been an honored technique used to identify the owners of livestock. In a similar way, companies today use branding to stamp ownership of their products into the minds of consumers.

In his book “Go Beyond: In Every Single Way, Marketers Must Do More to Lock in Customer Loyalty,” Don Frischmann writes, “Branding 101 taught us all that a brand is more than a product name or a company logo and that loyalty can't be bought with an ad. Brand loyalty is a gift from customers to companies that consistently earn their trust and demonstrate credibility over time. It can also be taken away at any time.”

In the beginning, there were products. To distinguish between them, trademarks were born. Today, trademarks have evolved into brands. Many of them have become so powerful that they generically they represent entire product lines. Band-Aid®, for instance, has become the standard name for any small bandage. Jacuzzi®, Walkman® and Rollerblades® are all registered trademark product names that have moved into the generic arena. Xerox® owns the copying brand, but we call all photocopies a Xerox, not an HP or an IBM. When we get a cold, we go to the store for some Kleenex®, although we may not buy that particular brand. If we’re craving a cola, we probably ask for a Coke® although the restaurant only serves Pepsi® products. We live in a world of brands. They help consumers distinguish one product from another.

What possible brands exist in the new-home marketing environment? How about high-tech, building green, affordable homes, age-restricted housing, Generation-X homes, concrete homes, log cabins, luxury homes or low-maintenance homes? Can you think of a builder who has established brand loyalty in any of these categories? If you mention one of these categories to a friend, does one company immediately come to mind? Big isn’t a brand. Top 100 isn’t a brand.

While there are hundreds of builders in the nation who construct what could be construed as green homes, I don’t know of a single builder who has successfully captured the brand “green builder.” The green market is so wide open at the present time that the National Association of Homebuilders (NAHB) has created its own set of guidelines called the “National Green Building Standards™” to clarify exactly what it means to claim the title “green builder.” In spite of those standards, there is still considerable debate on the subject.

Many builders use high-tech products, but I know of no single builder in any market who owns the brand “high-tech builder.”

I believe there are several reasons for this. The most obvious is that home building is largely a local or regional endeavor, often limited to a state or county-wide area. Even though builders may be national – such as Lennar®, Pulte® and Centex® – most of their marketing is local. A handful of builders have tried national television marketing, but few have done it successfully. I can’t really think of any, but there may be one or two.

We work in a business that although it operates across the nation, it’s generally only marketed within the confines of a small jurisdiction like a county or city.

How often do you ever see a builder’s television commercial targeting a national audience? Can you even name five of the nation’s top ten builders? I bet you can’t. According to Builder Magazine, the top five builders based on closings in 2007 were D.R. Horton®, Lennar Corp.®, Centex Corp.®, Pulte Homes®, and KB Homes®.
A Company by Any Other Name …

Builders fall into the trap of believing that their names are a brand; but, at best, their names might trigger a brand memory. Brands are more memorable because the brain treats them differently than it does company names or taglines or jingles.

According to the book “The Mental World of Brands” by Giep Franzen and Margot Bouwman, “the brand exists as a neural network of memories” that are activated by a brand name. This network is sometimes referred to as a Gestalt, a term derived from the field of psychology referring to the concept that a configuration or pattern of elements (in this case different memories) is so unified as a whole that its properties cannot be derived from a simple summation of its parts.”

The brain is the most complex and mysterious organ in the human body. It is the center of learning, creativity, imagination, problem solving, planning and our sense of identity. It involuntarily remembers everything our senses experience and chemically stores these memories in a complex series of cells known as neurons. The average human brain is made up of 100 billion interconnected neurons. Any given memory, when triggered, activates a certain number of neurons that are associated with that memory. That group of neurons is referred to as a Gestalt. So, a brand is a Gestalt of sorts.

For example, when I say the words “environmentally-friendly builder,” if you are an environmentalist who advocates responsible new-home construction with minimal waste and reduced negative effect on the environment, you immediately have a rush of memories and thoughts that are involuntarily triggered by those words. You think of things like the last protest march you were in … an interview you saw on television with a builder who was trying to be environmentally friendly … or activities on Earth Day. The words trigger groups of memories because they elicit an emotional association. If there were a builder who owned the brand “environmental builder,” you would immediately think of him or her. That group of interconnected neurons would be your Gestalt of memories related to environmentally responsible building.

Now, if I say the words “concrete homebuilder,” fewer memories come to mind since the term is more neutral and doesn’t generate as much emotion. You possibly didn’t even know anyone built concrete homes, so how would you have many thoughts associated with the term?

Gestalts can be positive or negative. If I told you to think of a football quarterback, who would come to mind? You probably wouldn’t think of Atlanta Falcons’ quarterback Michael Vick. However, if I said the words “animal cruelty,” then Vick’s name might move to the forefront. That is the power of brand ownership. In many ways, Vick has become a poster child for the brand “animal cruelty” because of the dog-fighting charges and the 47 injured dogs removed from his property in 2007. It’s unfortunate, but when I hear of animal cruelty, Vick’s name automatically leaps to mind.

The most powerful use of true branding is to create a new market category. I know of no builders who actually own a category and, consequently, a brand. Coke owns the cola brand. FedEx® owns the overnight shipping brand. Godiva owns the exclusive gift chocolate brand. Does any builder have the right to claim the green brand … the technology brand, etc?

The difficulty with builder brands is that new-home construction is almost always a local endeavor. Although it is possible that a builder could successfully capture a brand on a local basis, I doubt you will ever see any builder who owns these brands on a national basis.

Next issue I will talk about the power of the Internet and how it is opening doors for branding that never even existed before.

Contact Brian Flook at 301-416-7861 or visit our website at www.power-marketing.com for more information. © Copyright 2008

Power Marketing Earns Awards

Power Marketing & Advertising, Inc. was recently awarded four awards for work they did for their builder clients in 2007. The banquet, hosted by the Frederick County Builder Association, was held on June 12 at the Hollow Creek Country Club. There were approximately 100 builders and members present.

Power Marketing earned awards for four different projects: Best B&W advertisement for Dan Ryan Builders Manor Park community; Best Townhome sales center for the Drees Homes Linton Townhmes; Best Website for the Linton, and Best Community Brochure for Linton. "We're honored to receive these awards and to be recognized by our builder clients. Power Marketing is a full-service builder marketing company located in Hagerstown, MD. To learn more visit the website at www.power-marketing.com.

Where are we today?

I've been in this business since 1987 and I've lived through quite a few bumps and bruises. That's housing ... that's many cyclical businesses.

This market is tough. I agree, but I also know that it will get better. As sales and prices hit the bottom, and I believe that for the most part they have; we will regain our footing and once again go about the business of selling new homes.

Listen to this excerpt from a recent NAHB editorial: "New home sales posted slim gains in April according to a monthly Census Bureau Report that showed an increase of 3.3% in the seasonally adjusted annual rate from March’s report. It should be noted that this reading is still the second worst since October 1991, March 2008 being the lowest, and is down 42% from last year. "The momentum is still downward, and that April number is still weak," commented NAHB chief economist David Seiders. Unfortunately, even a report that Seiders labeled a “partial reversal of [March’s] steep decline” does not afford much optimism in this particular housing market."

Sounds pretty gloomy, but rest assured, it will get better. Sooner or later the housing market will rebound and we'll sell homes again.

The key now is to hold on, continue to be proactive with your marketing, and don't go into hibernation like your computer. Keep your inventory low. Spend every marketing dollar carefully. Power Marketing, my builder marketing company can help with that. Use this time to retrain your sales teams ... they need it badly.

This is a great business. Hang in there and we'll all come out together on the other end just like in the past.

Best of Luck

Traffic is King

The function of the marketing department is to attract qualified prospects and bring them to the sales table. The purpose of the sales department is to convert those prospects into buyers. Too often, though, the two functions – sales and marketing – are disconnected. In this excerpt from his seminar, Marketing What Matters Most, Brian Flook, President of Power Marketing, Inc., helps us to appreciate that the best marketing is that which has the input and backing of the sales department, and that sales come more quickly and easily when salespeople understand and support the core marketing message – the Unique Selling Proposition.

Listen to the audio, read the printed article, and then tell us what you think by leaving a comment below.

The Unique Selling Proposition, or USP, is the central a marketing message that clearly and concisely communicates your community or company with a distinctive, compelling selling point.

“The selling proposition is, without a doubt, the key. When you’re out there on the front line selling every day, you use selling propositions. You understand what the customer wants and you speak it to them in such a way that it becomes compelling . If it isn’t compelling, it doesn’t matter. If you’re not speaking to the audience what they want to hear, then it isn’t compelling – they don’t care. It’s irrelevant. You’ve got to understand who your audience is, and you’ve got to craft a message that speaks directly to what they want to hear.”

Flook goes on the list specific areas where marketing and sales need to be in alignment.

1. Your Brand is not your USP.

“The biggest mistake I often see builders [make] is to believe that their name will sell the product. It’s generally irrelevant to the consumer. They’re not interested,” says Flook. He recommends that builders avoid spending money on image advertising, which is expensive and largely ineffective. “Right now it’s about one thing, and that’s warm bodies – How do we deliver them to the door? And the way to do that is to focus your message on the compelling benefit that goes directly to the heart of your readers.”

“It’s location, location, location. After location comes price, then amenities.” The builders name and reputation, says Flook, are “the icing on the cake,” not the cake itself. “That doesn’t mean your name is irrelevant – it’s very relevant. But it isn’t the number one decision factor.”

2. Polish your online presentation.

“Eighty four percent of people start the new home search on the web. They come to the web, they shop, and then they go on site to buy.” Don’t expect a lot of online response, particularly through your ‘contact us’ button; that’s not how buyers want to communicate. “They shop online, they buy on site. For them to show up at your site, you have to prevent one thing: you have to prevent them from eliminating you,” says Flook. In this way, the Internet has replaced the newspaper. People shop online to find out who sells homes, where they are, and what they have, and immediately begin eliminating those that don’t seem to have what they are looking for. Then, they visit those that make their ‘short list.’ “Today, they eliminate your from their house, and they never show up [at your model.]” On the other hand, that means that prospects are qualifying themselves online, and so closing ratios on-site are going up.

3. Understand when, how and why to advertise.

“There are basically four types of ads,” say Brian Flook - lifestyle ads, price ads, product ads, and umbrella ads. See which you think will work best for you:

“Lifestyle ads focus on how your consumers live, what they want to do, how they see themselves… When you’re demonstrating a house, the best thing you can see happen is when they start placing themselves in that house. ‘This kitchen is perfect.’ or ‘This office is perfect for the way we live.’ That’s what a lifestyle ad does. It says to the consumer, ‘Can’t you see yourself here?’”

“Price ads focus on price. If you’re looking at first-time buyers, you talk monthly payments. Why? Because it’s what they know; it’s what they care about. They’ve been renting.” Flook says that price ads attempt to focus on value, “but that’s a moving target.” Value and price are two different things. Still, at every level, there will be those who buy on price as the major factor, or at least respond to a price ad as their first point of interest.

“Product ads talk about sticks and bricks and amenities; pieces, parts, locations, and features. It doesn’t matter which ‘sticks and bricks’ you focus on as long as they’re the ones the customer cares about.” What are your customers most interested in – lot size, quality of construction, or something else? Product ads should speak to the interests of your buyers.

Umbrella ads are sometimes used by builders to advertise multiple communities. According to Flook, they lack impact. “Umbrella ads are the weakest of all advertising, [because] you can’t target a benefit.” The builder might feel that advertising 15 communities in one ad tells prospects ‘we’re big.’ Consumers, on the other hand, are looking for benefits that are specific to them, something umbrella ads don’t deliver. Instead of supporting your value statement, “umbrella ads water down the unique selling proposition,” warns Flook.

Crafting and delivering a USP requires that we know our audience – who they are, where they work, what they drive, what they like, don’t like, and care about – what matters most to them. “If you don’t understand the audience, you’ll never begin to craft a message that matters to them. Take the time to understand who they are.”

When the sales department and the marketing department both understand their audience, and when the marketing process and the sales process come together to focus on the key points that matter most to buyers, then sales increase, profits grow and customers become raving fans.

It’s all about mastering what matters to your buyers.

What is a customer evangelist and why is that important to you as a builder?

If you can create a customer that is so absolutely overjoyed with their buying experience to the point that they must spread the word, then you have created a customer evangelist. In recent years many marketing pros have seen the potential of using these “satisfied believers” as a marketing tool to grow their customer base.

The following are four reasons why the evangelistic customer approach is important to you.

1. It’s cheap. Creating a customer evangelist generally costs you nothing.
2. It’s effective. If you sit back and think about your last big-item purchase what was the biggest influence? It was probably a friend or word-of-mouth that led you to buy that item verses some flashy advertisement.
3. It’s fun. This is a group of people that love your product. Of course they’re not going to be hard to work with.
4. It’ll drive your competitors crazy. Once the buzz has started it will be harder for them to compete with what you’ve already started.

So how can you create a customer evangelist? From the book “Creating Customer Evangelists” by Ben McConnell and Jackie Huba, the following tenets or rules of thumb have been taken from the practices of some of the most forward-thinking companies. Try to employ some these following thoughts:

• Customer plus-delta: Continuously gather customer feedback. Listen to your customers. This is one of the most important elements to create a loyal fan base. If you don’t know what your customers are saying about you, then how can you capitalize on the good things they may be saying. My suggestion is to constantly get feedback from your customers and make sure you use your findings to either promote your company, or if you have to, change how your operate.

• Napsterize knowledge: Make it a point to share knowledge freely. Based on the Napster business model, companies have found that when they share their business processes with customers and partners there is an increase in the perceived and actual value of their product.

• Build the buzz: Expertly build word-of-mouth networks. Buzz helps people discover your business faster than traditional marketing techniques, and also makes selling your product easier because customers know more about your company when they visit.

• Create Community: Encourage communities of customers to meet and share. By creating social gatherings for your customers, both you and your customers will benefit. They benefit from congregating with like-minded people, and will get advise for buying other products and support for things they’ve already bought. The company benefits by gaining valuable customer feedback and by increasing the loyalty of a satisfied customer.

• Make bite-size chunks: Devise specialized, smaller offerings to get customers to bite. If possible offer samples of your work or product to give customers an idea of your quality workmanship.

One of the best examples of a company that has used the above model to create customer evangelists is Macintosh Computers. It was first launched in 1984, and soon thereafter hundreds of user groups sprang up around the world. From these initial small user groups a culture of sharing ideas and products arose amongst the customer base, and soon a small army of loyal “Mac lovers” arose. (I must admit, as a graphic designer, I’m of one of these loyal customers even though I didn’t use my first Mac until 1991). Macintosh admits that they didn’t do this on purpose. They didn’t follow the process so much as create it along the way.

Taking all this into account, how can you capitalize on some of these processes and create customer evangelists? To start, why not try getting rid of stock photography on your web and paying for really good shots of actual satisfied customers? Better yet, feature them on your webs main page or in your advertisements. There is no better advertising than happy satisfied customers. Also, encourage customer feedback, and provide clear and easy ways to gain this feedback by possibly adding an easy-to-find contact form on your web devoted to their thoughts. Finally, remember that the key to creating customer evangelists is creating community. Make sure you can bring your buyers together in some way so that they can share their experience with others that have enjoyed your product.




Jon King
Creative Director
Power Marketing & Advertising
Phone: 301.416.7861

Breaking through the brain’s firewall

How many times have you said to your husband…“you didn’t hear a thing I just said, did you?” We must understand that hearing is a physical function and listening is a mental function. I hear many things as I write this article: cars driving down the street, music in the adjoining office, the tapping of a keyboard in the next office, someone outside talking as they walk by. But I am not listening to any of those things.

Your marketing message is often like those residual noises going on around you: you hear them, but you are not listening. If your marketing message doesn’t move a customer to action it is useless, not to mention it costs you money. What is sales and marketing if it isn’t the process of moving people to do something; specifically, to purchase something they may or may not need or even want. A compelling message will be relevant: “I care about what you are saying.” A compelling message will appeal to my fear of loss: “I better hurry or I’ll miss my chance.” A compelling message gets through all the clutter in my head and registers in my psyche.

Our brains are marvelously created and absolutely amazing. The Bible says we are, ‘fearfully and wonderfully made.’ When you consider the complexity of our minds, the truth of that statement becomes very evident.

The human mind is possibly the final frontier? How does it work? How does our memory affect what we buy? How does our memory work from a marketing perspective?

Let’s talk about the brain’s reticular activating system (RAS). The RAS is an important key to reaching inside a prospective homebuyer’s brain. It is a complex collection of neurons located at the base of the spinal cord that serve as a point-of-convergence for signals from the external world (specifically your five senses) and the internal world (your intuitions, emotions, etc.). So what’s it have to do with marketing and selling? Let’s explore three characteristics of the RAS. Our discussion will focus on number two: Negative Filtering.

1. Positive Focusing – Allows a mother to hear her whimpering baby while dad sleeps soundly next to her.
2. Negative Filtering – Allows the person who lives next to a railroad to unconsciously screen out the noise created by the train.
3. Individual Perceiving – Explains how five people who saw the same accident have five different stories.

According to scientists, the RAS tends to allow you to perceive three types of information on a regular basis: things you value, things that are unique, and things that threaten you. Remember, a unique selling proposition is a marketing message that clearly communicates your distinctive and compelling selling message. Over the years, the marketing industry has changed the moniker, but the idea remains the same. It was the “Differential Demonstration,” then it became the “Positioning Statement,” and now it’s often referred to as the “Unique Selling Proposition.” They basically mean one thing: why should a consumer purchase from you and not the builder down the street. What stands out about your product?

Creating a USP is about more than knowing your customers. It’s about your customers knowing you! Your USP must answer the question every consumer asks: Why should I buy from you? Remember, new home customers don’t come to buy from you they come to eliminate you. The process of elimination is easier for the consumer than the process of selection. Often it comes down to which builder gets eliminated last. And today, the process happens on the Internet.

Consider all the marketing noise – magazines ads, billboards, television and radio, newsprint, direct mail… you get it. That marketing noise is like steady drone of noises all around you that your RAS filters out. To be successful your marketing message must cut through the RAS and connect with the consumer’s mind. That means your marketing messages should attempt to conform to the ‘gateway’ processes of the RAS. It tends to regularly allow you to perceive three types of information, so attempt to make your message conform:

1. Things you value – This goes right back to the ‘what’s in it for me. Fact: we care about what we value, we are less concerned about what we don’t understand. When your selling proposition can strike a value nerve, the RAS opens the gateway and says to the brain: “hey, pay attention here, this matters.” What are the most common first words out of your mouth when encountered by a sales person? I would be willing to bet that they are: “I’m not interested or I’m just looking!” If the immediate message of a sales pitch doesn’t strike a value chord, you lose.

Let’s use an elementary school example. When a person has a child, that child becomes a high priority value. To a mother interested in keeping her children safe, a message that addresses those kinds of issues immediately meets her RAS criteria and the brain perceives the message. But a single guy with no interest in kids will most likely barely register that message. His RAS never opened the gateway because the value nerve wasn’t hit.

2. Things that are unique – Uniqueness seems to be one of those factors that arrest our attention. Is your message unique? Does it stand out from all the other builder messages?
Merriam-Webster gives the following definitions of the word unique:

1. Being the only one: SOLE
2. Being without a like or equal: UNEQUALED
3. UNUSUAL

The Apple iPhone is unique in quite a few ways. As a result, sales of the iPhone are projected to exceed 45 million by 2009. Apple has used the uniqueness of their designs for years to capture large market shares and launch trends that changed other industries as well. As you craft your message, always attempt to be as unique as possible. Find the angle that sets you apart from the others and appeals to your target audience.

3. Things that threaten you – Obviously you can’t say, “buy this house or I will send cousin Vinnie to break your knees.” But, you can use the tried and true method of writing a message that appeals to the consumer’s fear of loss: “$38,000 Grand Opening Incentive for first five buyers.” How about, “FREE Appliance Upgrade to all Homes Purchased this Weekend.” The fear of loss is a powerful motivator, but I believe it has a very short shelf life. It is my opinion that positive messages that focus on values have more lasting effect than negative ones.

Contact Power Marketing at 800-932-0494 or visit our website at www.power-marketing.com for more information.

© Copyright 2007