New Math for Builders

Posted by
Mike Lyon
Date
 June 25, 2008
Comments
2 comments

There is a new formula for builders. Let’s look at some of the latest numbers:

84% – The percentage of your homebuyers who use the internet to research new homes
12.1 Weeks – The average time it takes for Internet buyers to purchase a home – double the amount from 2006
94% – The percentage of Internet buyers who expect a response in 4 Hours or Less
64% – The percentage of New Home Sales Executives who DO NOT FOLLOW UP with qualified buyers
$4.00 – The average price for a gallon of gas

All these numbers add up to a Huge Opportunity!

The home buyer pool has become very shallow and competition has increased for their business. Now, more than any other time in history, buyers are using the web to research their choices. Savvy buyers are being very strategic – narrowing down their choices of homes and communities – disqualifying as they go – using the Internet as their power tool to gather information. They are shopping almost twice as long before their first appointment to a model home. Throw into the mix current fuel costs, at $4 per gallon, families aren’t jumping in the Suburban for a leisurely drive from one new home community to the next.

As builders work their way through “the dip“, it is critical to invest in online marketing and take the time to set up a process to manage the leads they receive.

Potential customers are craving better on-demand information. They expect top notch customer service while they are shopping. The builder who shows them this courtesy in the beginning will come out ahead in the end.

Home builder marketing dollars and mindsets will need to shift to this shopping phase to capture the buyer sooner – instead of waiting for the “walk in”. It makes sense to go where the buyers are, and right now they are online, trying to determine if you are the right fit.

  • Mike, I’m often asked do potential customers give “buying signals.” Consider the statistics, that they spend 12 plus weeks on the website before coming onsite, and gas at 4.00 a gallon. So the number one buying signal, they show up at the model. The buying signal prior to showing up at the model, they request information from a builders website(which in all probability will not receive a response). The next buying signal after spending 12 weeks on the website, requesting information (shopping by elimination) and then spending 4.00 a gallon, they enter the model and tell the salesperson they are “just looking, and not going to buy.” Yeah, right! Bottom line, you cannot convince me it is a bad market, rather we have bad market practices.
    Thanks, Myers Barnes

  • Mike, I’m often asked do potential customers give “buying signals.” Consider the statistics, that they spend 12 plus weeks on the website before coming onsite, and gas at 4.00 a gallon. So the number one buying signal, they show up at the model. The buying signal prior to showing up at the model, they request information from a builders website(which in all probability will not receive a response). The next buying signal after spending 12 weeks on the website, requesting information (shopping by elimination) and then spending 4.00 a gallon, they enter the model and tell the salesperson they are “just looking, and not going to buy.” Yeah, right! Bottom line, you cannot convince me it is a bad market, rather we have bad market practices.
    Thanks, Myers Barnes