The fall is right around the corner, and new home builders looking to differentiate and stay ahead of the competition know what that means — planning ahead!
It’s never too early to reassess your strategy and think about what you’ll need to do to set your business up for as much success as possible come fall. We checked in with some of our top leaders and execs at New Home Star to bring you their opinions and thoughts on how to best prepare.
Here’s what they had to say:
Now is the time to get serious about backlog management. That might mean being thorough about collecting the rest of an earnest money deposit. Or, it could mean working to remove any contingencies. It definitely means getting rates locked with buyers and their mortgage companies. Solving these issues now, even if the buyer simply can no longer move forward, provides time necessary to resell the home in the fall and still close it in 2024.
Supply chain and labor forces have given us all we could handle the past couple of years. High demand and strong consumer confidence have driven sales without too much builder scrutiny.
If the market forces continue to change, every purchase decision will be made more carefully and every builder will come under greater scrutiny. Now is a great time to address those areas you may have not paid as much attention to the past few years and get serious about building a brand name and image that withstand the test of market forces.
Take time now to invest in a well-rounded promotional strategy aimed at driving traffic. Spend marketing dollars in the summer to help drive traffic alongside your sales team’s field efforts and focus on creating messaging that connects with your target consumer.
The summer also often brings complacency and can show in the way our models and communities are presented. Consider a full audit to freshen things up and outshine your competition by having a tight marketing window when customers arrive.
You can consider leveraging local partnerships to drive open houses and events traffic. Collaborate with local businesses and influencers to build partnerships who align with your total contract price.
You might also think about enlisting customers who will promote your brand. While brand may not be the reason a customer initiates the search, a poor online reputation can be very detrimental to converting a buyer. Work to boost positive reviews now. Google will only promote communities with a 4.0 rating or higher, and high reviews impact traffic and conversion strategies.
With affordability at an all-time low, it’s likely attributes to the community or home that mattered to buyers last year no longer matter as much now. Other items you may be able to offer in terms of product, affordability, or attributes that you weren’t showcasing matter more now.
Challenge your teams to clearly define who their current target consumer is and what they value, and then get to work on ensuring your unique selling position (USP) is on target with this segment.
Pour energy into making enhancements to model homes so they're in pristine condition for community guests. This might mean capitalizing on curb appeal — enhancing the appearance of the model home and inventory homes. Invest in landscaping, spruce up the exterior, or install eye-catching signage. You can also showcase outdoor living spaces — like patios, decks, and front porches maximized with furniture, flowers, and outdoor rugs.
You may also consider introducing an entirely new floor plan that lowers the entry price point in order to increase traffic.
Every season is a good one to invest in sales team training, but the summer is an especially ideal and slower time to boost team readiness for the fall.
Promote divisional engagement and build energy through fun contests and office get-togethers. Understand the forces at play with your teams and offer more opportunities for fun and play while driving performance and accountability during the summer months.
Also use the slower months to teach the team to study the competition. Look for trends for competitor offerings and work through a strategy to proactively combat competitive moves. If a competitor always discounts at the end of a month or a quarter, work a strategy to take buyers in the first half of the month or quarter.
Ask for and hold accountability to having frequent and accurate competition reports. The market is in flux and builders are pivoting quickly, so it’s important to implement a feedback loop system that is simple yet effective so that you as the leader can make the right decisions faster.
We recommend promoting seasonal incentives – discounts, upgrades or additional perks. It’s a good time to highlight urgency through limited time offers. Discuss a fall incentive program with your sales manager to ensure it’s aligned with what the market values.
You can also switch up what you’re highlighting to buyers based on month. In the summer months when AC is usually on full blast, for example, you can promote energy efficiency and sustainability. Emphasize the features that reduce energy bills, increase comfort, and contribute to healthier living.
Experienced builders know so many moves they can make to drive greater affordability. Some of them take more time than others. Taking that initiative now will have you set up for the fall.
This may mean de-spec'ing a neighborhood. It may mean getting an awesome preferred lender who can offer great programs. It might mean introducing a smaller plan. It's just best to look forward to anticipate the need and take action on it now.
Seed in some inventory. In addition to all of the homes you need to build to satisfy orders, you need to put yourself in a position to convert buyers in the fall who still want to make the move this year.
Builders are benefiting from low resale supply and the market is responding favorably to builders taking advantage of this gap. Look at starts and cycle times and have a healthy mix of inventory and pre-orders ready for sale. Look at this at the community level and be bullish on where you may be able to add incremental starts and inventory to capture demand and shrinking resale supply.
It can be a good idea to provide your sales team with “back pocket money” to utilize in selling inventory homes that can close this year. Offer the sales team a percentage of this “back pocket money” that isn't utilized as a bonus. Small means of motivation can go a long way in closing deals and keeping team members on their toes!
And a bonus tip: get good at nurturing credit challenged buyers. With supply low, home builders are reaping the benefits. But if rates begin to reduce, it’s likely we’ll have a pent-up supply of people who want to sell their homes but are waiting because they don’t want to leave their low rate. As rates reduce, more of those homeowners will list their homes. If you have an ability to nurture credit challenged buyers now, they become buyers you need when more options appear.
Summer months can be slow, but in our opinion, there’s a lot of work that can be done now to set builder teams up for success come this fall. And of course, partnering with an experienced and effective sales team is critical to making the most of any season and ensuring your business can thrive in and be prepared for any market condition.
To receive a PDF version of this playbook, click the link below.