As the housing tax credit deadline fast approaches, homebuilders across the country are pumping out a few more homes in hopes of enticing some last minute buyers.
Is this a good idea? It’s hard to really say at this point, but the logic of many builders makes a lot of sense.
Builders lost sales during the previous housing tax credit program that ended in November of last year and many are afraid if that they aren’t prepared for a late push, the same thing will happen again.
On the surface, this seems to make good sense. The problem with this theory is that if it’s wrong, it’s going to slow down an already creeping housing recovery. If builders decide to rush houses to market before April 30, the housing tax credit end date, they are assuming a lot of risk. If they don’t sell these spec homes, they will be taking a step backwards. Is this really the time to be taking this kind of risk?
Some analysts believe that the first tax credit program satisfied the quick flurry of demand for discounted housing. Many are afraid that the second tax credit program will not cause the same amount of market participation from first-time buyers. And some economists believe that the tax credit has not helped housing at all. Who is right?
At this point, no one knows how this will play out. Making consumer behavior predications based on emotions is a risky play and that’s exactly what some builders are doing. They are banking on consumer urgency and emotion. These are two things that we can never truly forecast. Building homes based on consumer behavior assumptions could have a very negative outcome.
Eric Schmidt, chairman and CEO of Google Inc., has made it increasingly clear that Google has no desire to destroy the news industry. In fact, it would seem that Google desires the opposite.
In an article published last December, Schmidt outlined what he believes to be a starting point for newspapers and magazines trying to enter the digital space more effectively.
According to his stats, Google generates a billion clicks a month for online news publishers strictly from Google News. In addition to that billion, Google web search and iGoogle homepages send an additional 3 billion visitors.
I don’t really understand why online newspapers are not using this to their advantage. The Google News search will only give viewers a preview of the story. If they want to read the entire story, they must click on a link to THEIR website. What am I missing here?
When we write press releases and distribute them on-line, we choose services that will best index them in Google News searches. Why? Because we know that exposure inside of Google News will greatly help the chances of those press releases reaching the right people.
Apparently the big online news outlets think they can go it alone. Google charges nothing for online newspapers to be indexed. These newspapers receive billions of clicks for free. Google does benefit due to ad displays, but it’s not like the news outlets are being hurt by this.
It seems Google is advancing their technologies everyday. This means they are syndicating daily rituals and habits for their users. They are making daily tasks easier and that includes finding and reading the news. Readers are not just going to search a media site for their news. Why wouldn’t a reader use Google to give them the most accurate, relevant and timely news from thousands of publications? Why would they search just one newspaper? I believe that the news media is not going away but they will have to learn to use Google to their advantage.
This points to why Google searches are important for all of us to use to our advantage.
We are all crossing our fingers hoping for a steady recovery in the housing market. Analysts project an increase in demand for housing by the end of 2010. Warren Buffett is predicting 2011. If this comes to fruition, buyers will enter the market looking at foreclosed properties hoping for a deal. A lot of consumers will be looking at brand new buildings that have been sitting empty because of the previous economic climate.
The New York Times published an interesting article last month that gives home buyers, specifically those looking at condos, a guide to buying homes in newly constructed buildings. This is great if you’re a home buyer, but not so much if you’re a developer with property sitting empty. You’re going to be answering a lot more detailed questions than ever before.
Everyone knows that there are risks to buying regardless of the product or location. You never know how many units will sell or if there are construction flaws that aren’t visible. These concerns are going to be heightened once the housing market picks up. Consumers are going to ask a lot of questions in regards to construction, vacancy numbers, and finances.
Developers need to be ready to answer the hard questions consumers may have. If you have property that’s been sitting empty for six months, you need to have an explanation for it. If your property lost funding last year but you managed to finish a few units, you need to convince the consumer that funding is re-established and their investment will be worth it in the long run.
Competition is going to be tight once the market returns and every little impression is going to count. Consumer confidence is down and many are skeptical. Our job as marketers and developers is to ease their doubt about our products. Before we get too excited about a housing recovery, let’s make sure we are ready for it.
Sometimes it’s good to read a simple marketing strategy to remind yourself of the basics. Barbara Schenck’s article does exactly that. This is not ground breaking material but stresses the basics we should all be doing. I find it interesting that the basic tactics she mentions can easily be applied to social media as well as our traditional marketing efforts. I will elaborate on this later in the blog.
Schenk makes a couple of great points that can help all of us in our marketing efforts. All of her suggestions tie back to the important practice of research and knowing everything about your potential consumer. In real estate we tend to assume we know our buyer. I think this is dangerous for two reasons: consumers don’t fit into neat little demographic packages anymore and the consumer is changing at a fast rate.
She talks about identifying the geography, demographics, and psycho graphics of potential consumers. I think we all understand that in order to develop and sell a product successfully, we have to understand the values of who we are selling to.
So Why Am I Sharing This With You?
Well, I am sharing this with you to demonstrate that social media isn’t really all that different than what we have done before. Message development and follow up is what is different, but the disciplines of locating and researching our consumers are still very necessary. In fact, social media has made these disciplines easier.
Schenk talks about profiling our potential consumers, but guess what? They have done the work for us. Most social media profiles across the social networks contain profiles where a lot of users identify their age, location, relationship status, and career or education.
As far as psycho graphics go, social media can really help you in your research. People talk about what they like and don’t like. They talk about what they believe in and what they like to do. Social media is a gold mine for voluntary consumer data for you to collect.
I hope you can make the same connections I did after reading Schenk’s article. Even though it seems basic, sometimes we need to take a step back and try not to get caught up in the new hot marketing tool. Even though the way we market to consumers is changing, some of the techniques to do so will still be necessary.
A big part of developing a social media strategy involves understanding the target audience you’re are trying to communicate with.
Professor Mikolaj Jan Piskorski of Harvard University has developed one of the most thought provoking hypothesis on why social network users behave the way they do. I recommend reading about his studies, which you can do so here
According to Piskorski, social networks are the most useful when they address the failures of off line networks. I think of social networks as a complimentary system for our off line networks.
What makes social networks appealing and useful is their syndication. Piskorski addresses this clearly. By utilizing social networks, we are able to reach relevant people faster and in larger quantities. This is the major benefit of social networking to me. Being able to reach peers, industry leaders, and consumers has become easier through social networks.
The most interesting excerpt from the article is where Piskorki gives the analogy of a group of friends sitting around a table talking. An advertiser, that no one at the tables knows, sits down and starts talking about a product that none of the friends have an interest in. How do you think that sales pitch is going to go?
We shouldn’t treat our social network interactions with consumers any differently than we would treat our face-to-face interactions.
This is the hard part for marketers and businesses. It is our natural inclination to want social media to act like traditional media. We want a one-way message to do the trick, but it will never work. Even though we understand the necessity for communication in social media, we often don’t take the time to craft a message that invites a conversation. We need to make sure that our social strategies make sense to who we are trying to communicate with. They should understand our product and why we are talking to them. If they don’t become engaged, then we have wasted both our time and our money.
Ashley Jennings has written a great summary on some of the design highlights from the International Builders Show. She thinks, and I agree, that some of her suggestions will make a huge impact on your sales success as we begin our climb out of this recession.
I won’t go over every product that Jennings mentions in her article, but I will say that I like how she explains why they add perceived benefits for consumers.
Jennings really stresses the need to appeal to the savvy home buyers who are a part of the “Green” consumer market.
I think one of the bigger take aways from her article can be found in the paragraph where she talks about wood flooring.
“Regardless of the wood flooring that you install, it is clear that buyers want hard surface floors that have an eco-friendly oil finish that a sealer with VOC toxins.”
This says it all. As we limp out of the recession and homes start selling again, there is going to be a new wave of consumer demands that many sellers will encounter for the first time. Consumers are going to want the high quality finishes they are accustomed to but are also seeking eco-friendly products that will save them money. I don’t think it’s going to be good enough to boast sustainable building materials without showing consumers where they are going to save money.
As the housing market begins its recovery, we need to makes sure that we are ready to answer any questions consumers may have. It’s highly competitive already and perhaps sustainable homes give you an advantage over foreclosures. Make sure you that you have your product ready for the “new normal” consumer.
