A Journey in Successful Marketing: Identifying and Correcting Ten MH Marketing Mistakes

by Joe Adams

If you think the role of marketing is to make sales – wrong. Think again.

The role of marketing is not to make sales. The role of marketing is to create the right environment that causes customers to want to purchase.

Nowhere is this statement more important than in the context of marketing homes. This month's discussion focuses on a few marketing misconceptions. I call them Marketing Mistakes:

Marketing Mistake #1: "The sales force is the best marketing."

The sales team is part of the total marketing effort. It is, however, not the best marketing tool at your disposal. Remember, the role of marketing is not to make sales. That's the job of the sales department.

Many people say the sales force presents the first impression of their company. That's not true, either. Sales personnel are not the only people involved in customer contact. Total marketing may place every person in your organization in contact with future customers. All must be part of the sales and marketing team. Everyone must convey the same coherent and convincing message to future homeowners. The ideal marketing program gives support to the sales force and makes them more effective. The entire marketing plan must create a climate so customers want to purchase from your sales people.

Marketing Mistake #2: "Our market is totally identified."

This marketing mistake implies that we already know where to locate all the prospects to fill your community or achieve your sales objectives. An attitude of saying you know where to find all your prospects causes stagnation in an organization. This stagnation may come from experiencing a successful advertising campaign or promotion in the past that created some interest from prospects. Or the owner or sales manager repeats a pet project though the results no longer warrant the investment.

Effective marketing is a never-ending process of cultivating prospects and current homeowners or residents. Here's an example of cultivating current customers. Nintendo Corporation recently identified an unknown market when it received a letter from a nursing home resident. The eighty-one year old woman stated that she and her friends help pass the time by playing Nintendo games about four hours a day. Discovering this market would have taken in-depth market research. However, it proves no market is ever totally identified.

The locating and nurturing of additional prospects must be a continual process. If you think you know from where all your prospects come, so does your competition.

Ideas for locating new markets may come from using many resources. The comment, "It sounds great, but it won't work for me," is a remark that is not realistic. Actually, some of the ideas in this series of articles may not work 100% in your situation. Some may need to be modified for your operation. Before you reject an idea, give some thought to how you might adapt part of it to your marketing effort. Scale down the financial requirements if they do not fit your budget. Look for parts you can use. If only one idea generates an additional sale, your investment has been repaid. To find new markets and to increase sales, you must try something new. In today's home selling environment, you have to take some calculated risks.

Marketing Mistake #3: "Direct mail and blast emails are all junk mail and spam."

Thinking that all direct mail or blast emails are all junk mail is a definite marketing mistake. This attitude causes non-use of a cost-effective method of reaching a targeted audience. The dismissal of mail or email solicitation as a viable marketing tool probably stems from the abundance of junk mail we all receive.

Targeted, and the key word is targeted, direct mail and email can be a potent source of receiving qualified leads. To be effective, mailings must be creative.

A profitable mail strategy must display the utmost professionalism. The logistics used can be the avenue to communicate who you are, why a customer should buy from you, what is your customer service philosophy, and where you are located. This written communication should be the beginning of a rapport between your company and a future homeowner. This correspondence sets up a friendship even before the prospect arrives to visit your development or model center. In fact, many prospects retain information received as valuable pieces of information.

Direct mail and emails are only one step in beginning the entire marketing process. Their purpose is to position your community, or company, favorably in a prospect's mind by providing positive reasons to visit.

Marketing Mistake #4: "Sales are great; why waste money?"

The first mistake is thinking marketing is a waste of money. Without a doubt, if not performed properly, advertising and marketing can be a waste of financial resources. A related mistake is speculating future sales will be great, and there is no need to continue marketing.

Marketing is a cumulative process. The programs enacted today may not attain fruition for months. The reason that sales are great now may be due to a marketing technique that was used in the past. Sales results may be superior because of an outstanding salesperson who may leave tomorrow. Local economic conditions may also provide above-average sales results. The certainty you feel about sales today should have no bearing on investing in a concrete marketing program.

Marketing is about customers calling or visiting you with the desire to buy a home. Nothing can replace the value of an excellent marketing plan. Assuming the market will not change can be a very naive and costly attitude. Look at recent history. Contemplating or talking about how great sales were the previous year or the last quarter is evidence of a faltering marketing program.

Some community developers cling to production-oriented marketing. This is the attitude where the owner thinks, "Build a better community and everyone will come and buy." The builder expends millions on a development with luxurious entrances, clubhouses, and additional amenities. Then he fails to invest the money needed to develop marketing programs necessary to fill the community.

Some developers have the attitude, "If I pay good money for good sales people, they will find a way to sell the homes." Amenities and sales people don't buy the houses; customers do. Invest your marketing dollars in your customers.

Another mistake is spending most of your marketing budget on selling the first twenty-five to fifty homes and the last twenty-five to fifty homes. Remember, it's not the first or last homes that require the strongest marketing; it's all those lots and sales in between. Whether it is the initial sales or the final homes purchased, the marketing process must continue to generate enough prospects to fill the entire community.

Marketing Mistake #5: "Size of the company should determine the marketing budget."

Neither the size of the company nor the size of the project is the determining factor in preparing a marketing budget. There have been large projects that require small budgets and small projects that need a large marketing expenditure. Before establishing a marketing plan's financial projection, consider factors like the goals of the investors, the current economic conditions, the location and type of project, the desired fill rate, and the construction capabilities. Interesting, small companies tend to waste more marketing dollars than larger organizations. Often the smaller developer lacks the time to gain the marketing knowledge or expertise required and will consume financial resources on what sounds good. In fact, the fewer lots in a community, the better the advertising and marketing needs to be. This primarily is due to the fact that smaller communities must compete with larger developments. Whether those needs are filled by an in-house person or through the use of a consultant, a solid marketing program is essential.

One of the secrets in establishing or suggesting alternative marketing plans is in discovering and in reading new market segments that may have been overlooked. Many times an outsider can look at your total operation to see where best to invest your marketing dollars. Often the developer or current management is too close to the operation to see new merchandising opportunities.

Many times, the sales manager is too busy with everyday operations to evaluate the needs and wants of the market. To do a thorough market analysis requires many hours, and then the information needs to be synthesized into a well-developed marketing blueprint. Your sales manager should not be the marketing manager; it dilutes his or her efforts. Remember, the sales manager is part of the sales team and should be investing his/her time and energies in developing the sales people.

Marketing Mistake #6: "Word of mouth is the best advertising"

Referrals are a surefire marketing tool and usually result in an easier sale. Referrals come without buying an advertisement from a magazine or local newspaper. Constructive word-of-mouth advertising is the result of the positive marketing effort used throughout your organization. Solid marketing strategies create the environment that causes referrals.

If word of mouth were the best marketing tool, people would never stop giving referrals. They do stop, unless a proper marketing plan can keep their mouths moving about how great your community is and how superb it is to live there. A later article in this series will focus on how to generate more referrals.

Marketing Mistake #7: "Price is the prime marketing instrument."

The belief, "Only price is important to our customers," could be a costly position. If you are selling price alone, you won't be around long. No business can maintain selling at prices that do not generate enough revenue to sustain the marketing program needed to fill a community or reach sales goals.

The argument that prices are too high usually comes from the sales department. The sales person hears the price objection from the customer and starts to believe it. The customer many times will use price as an objection if the salesperson has not established the value. Prospects always wants the best deal they can get. The sales force needs to use more value selling and then price objections will diminish.

Is there a market where it is alright to advertise a low price? Definitely. In fact, advertising a low price can be an excellent marketing tool. However, there is a difference between 'cheap' and 'affordable.' There is also a distinction between real value and perceived value. Once, I was monitoring a client's salespeople at a retail show, and a customer stopped by and asked, "How much are the homes in your development?" The salesperson replied, "Well, depending on where you want to live, your investment could be as low as $70,000." Her reply, "Oh, we're going to spend a lot more than that on a new home." Price was not a good marketing tool for this customer.

When marketing a low price, follow this rule: tell your prospect why the price is low. The low price may be because your goal is to fill the community quickly, or you are both the builder and developer and can reduce the costs. Low price needs some type of justification in the customer's eyes. Prospects want to assure themselves that the price of the home is not from poor workmanship. Most people will accept low prices, but will not buy inferior construction.

Marketing price alone does not create an environment. In fact, by using successful marketing principles, the customers will place price lower on their list of concerns.

Marketing Mistake #8:"Advertising is a waste of money."

Advertising can be a waste of money if not properly planned and monitored. As a major part of the marketing program, advertising can become the most expensive component.

Advertising money is wasted and short-lived if it is self-serving, amateurish, or not targeted. Well-planned advertising, on the other hand, can last six months after a campaign has ended. Even a well-thought-out advertising campaign is wasted if the leads it generates are not controlled properly. Handling of leads is an extremely critical area in marketing homes. Advertising without a proven follow-up system in place is useless.

Marketing Mistake #9: "We don't need to advertise. Everyone knows us."

The idea that everyone knows of your community or business is a common marketing mistake. This is especially true of communities or businesses in smaller cities or towns. Yours may be the only type of business available in the locale. Being located in a small geographical area is never a reason for not continuing to market within the surrounding municipality. If there were no need to market well-known businesses, someone should tell McDonald's restaurants. McDonald's spends millions on advertising. Yet if you asked the patrons of McDonald's if they had ever heard of McDonald's before they visited, the majority would say yes. Or if you would ask them if they knew there was a McDonald's in their town, the bulk of them would still reply yes. Advertising in the local area continually places your name in front of prospective customers to keep them aware of what your business is and where you are located.

People are continually relocating. These prospects need a place to live. Once, I was interviewing a person who had recently moved to the area and was responding to a want-ad in the classified section of the paper. I asked her how she found a place to live when she moved here. Her reply was that she looked in the local newspaper classified section under homes for sale. I asked her why she didn't buy from this home seller. Her reply: "I didn't know you were here." The need to continue marketing in the local media became clearer. Everyone, especially newcomers, may not know who you are or where you are located.

Marketing Mistake #10: "The name of the development is not that important."

The single most important marketing decision you can make,is what you name the community. You will notice I said can make, because you can still change the name of your community no matter how many houses are there now. Changing the name is usually easier if you are not the one who selected the name in the beginning. Our egos make it hard to admit we may have made a mistake in the selection of our community's name.

Setting a positive marketing environment is easier with a well-accepted community name. Pride of ownership is one of the primary buying motives.

The best names for a community tell something about the life-style and its location: Belair Lakes - Riverside Fairways - Columbia Surfside.

Some names indicate a fairytale image: Enchanted Valley - Oak Palace - Kings & Queens Resort.

Some names are the most difficult to market. They do not conjure any positive image. These designations provide no clue to any fun, fantasy, prestige, or agreeable life-style. People want to enjoy life and be proud of the selection of their community. Therefore, if your community has a name like Jim's Village, Low Valley, or Lonely Estates, change it now. You will immediately begin appealing to a larger market audience.

In summary, marketing mistakes cost money and definitely result in lost sales.

(For previous articles in this series, click on left>Featured Articles
>March - Market Research and Your Customer
>April - Shopping the Competition
>May - Buying Motives of Seniors
>June - Seniors Sales Obstacles
>July - Controlling Lead Distribution ##