To Succeed in This Market, Become a Survivor Man!
Doug Stone MIRM, CSP

Doug Stone is Director of Business Development at Power Marketing & Advertising. Reach him at dstone@power-marketing.com

There is a show on the Discovery Channel that we enjoy at my home; it’s called Survivor Man. The premise of the program is the Survivor Man finds himself stranded in some remote part of the world. He must rely on his experience and knowledge to survive a week in hostile environments. He is left with limited resources and, in order to survive must make the most of his opportunities. I don’t know if it’s good editing or what, but he always makes it. He has been in some tough spots, but he relies on what he knows to get him through.

Today’s housing markets have many of us feeling like Survivor Man. With one down turn reported after another it feels to some as if all is lost. As Director of Business Development for Power Marketing and Advertising I talk to builders, manufacturers, developers and many vendors associated with the housing industry on a weekly, if not daily basis. And you know what? They are selling houses and doing more than surviving; they are finding ways to be successful despite the bad news we all read about.

Don’t get me wrong, there are plenty of builders who are struggling for various reasons, but I want this article to give us all some hope. A month ago I began contacting our clients across the country to get some frontline reports on how varying markets and products are doing and what sales managers are doing to sell homes. I tried to create a cross-section of builders. One of the builders I interviewed is a highly successful systems-built manufacturer and developer. I also talked with two regional builders and a division of a national builder. All had mixed responses, but all had one thing in common, an ability to adapt to the changing market and to grow or maintain market share.

All of our clients who responded agreed that the market is either shrinking or off by as much as 40%. However there are areas that continue to grow, just not as quickly as in the past couple of years. The Lancaster, PA area for example, continues to show growth. In early spring of this year we conducted a market study for a client in Pennsylvania. Most realtors we spoke with told us there was 3 – 7% growth in the Lancaster area. The biggest challenge all are facing is the “home to sell” contingency. There are still a lot of re-sales, repo’s, and short sales on the market. All stated that even with the market down there is still a market and they felt responsible to provide the most honest and up-to-date information out there for their prospects. As Barry Weller, Vice President of Sales and Marketing for Drees Homes MD Division stated, “When we get a prospect in the door, it is our obligation to show them that it is a great time to buy a home. We need to demonstrate how wonderful our homes are and keep the buyer excited about purchasing a new home. Back in the eighties, we called that selling a house.”

Sharon Martin, a veteran marketing manager I spoke with had this to say about why she has continued success. “Experience – I’ve been through this – more or less – several times in the last 20 years.  The challenges are sometimes different but there are always challenges!  You just have to get up every morning and tell yourself – if I have to go to work, I might as well sell a house today!  Attitude is everything – if you are having a bad day, keep it to yourself or stay home.”

When asked what steps she is taking to stay successful she had this to say, “Hard work and back to basics – educate, follow-up and talk it up!  You never know where or when your next buyer will come along.  Leave business cards everywhere, wear a nametag everywhere, network, and ask for referrals and follow-up, follow-up, follow-up!  I’m now going back through prospects that visited our homes a year ago.  They are the ones who have had time to swallow the bitter pill of the market not skyrocketing and not being able to make a million dollars on a home they haven’t even moved into yet!  If they still need a home, they have had time to think and adjust and are not speculators, I want them to come back through my door.” Sharon has sold eight homes in less than two months.

E. G. Stoltzfus, a regional builder we work with, believes they are staying successful by educating buyers about their product offerings versus the competition. They combine this approach with educating buyers on why it’s a great time to buy. This builder uses realtors to sell their homes, and have found that the realtor professionals in their markets offer a huge benefit when it comes to educating buyers. “Typically our realtor partners are pros who’ve been through tough markets before. They are able to demonstrate to our buyers that they can sell their existing home, and with (interest) rates still low, it is a great time to buy” This builder does admit that sales are off based on last year, which was one of their best ever, but they’ve been able to sell 160 homes as of 6/1/08.

Heartland Homes is in a large metro market; they are having tremendous success; as of 6/1/08 they have sold 260 homes! According to their Director of Marketing, Kevin Oakley, “Traffic is at an all time high in 70% of our communities, while others are maintaining the same levels as last year.” While their market has shrunk slightly, nothing compared to the national average, their market share has increased from 8.45% to 14.65% in the past year. They operate in only three of the four regions in their market. What is the key to their success? Marketing 101, find a need and fill it. Kevin shared some of the steps they are taking, “We are constantly innovating our product designs to meet consumer demand. We do monthly phone surveys of our prospects and customers to see how we are doing.” He went on to describe what he believes is one of the keys to their current success, “We have the ability to offer a highly attractive custom home at a price that a large portion of the market can afford.”

The idea of product innovation is a key to success in today’s market. This excerpt from an article written by Alan J. Heavens in the Philadelphia Enquirer is further confirmation. “Many builders have adjusted to the economy’s current conditions “by bringing product to market that meet the shift in demand,” said Wayne Norris of Hanley Wood Market Intelligence. Some new developments offer small houses with many upgrades that are designed to be attractive to first-time buyers, he said. The trend to smaller houses appears to be a national one, and they are generally selling better, said Bernard Markstein, NAHB’s senior economist.”

It is my hope that this article will offer encouragement in this down market. I have been blessed enough to meet some incredible people across the country in the home building industry. Without hesitation I would say the overwhelming majority are sincere, hardworking professionals. They view home building as more than a way to make a living. To many it’s their life’s blood and a way to help fulfill the “American Dream.”

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