Sometimes you need to go back to the basics… so this issue’s article is a slightly updated version of our first ever blog post, which was originally published in Builder Magazine in 2009, to kick off our blog entitled Think Like a Consumer, Act Like A Retailer®. Whether the industry is in an upturn or downturn, these essential truths not only still hold true but are more true today than ever before.
Are you a construction company who builds high quality constructed homes and sells them? Or are you a world-class retailer of homes of exception quality? The way you think of your company (and how that impacts every internal and external process, policy, and strategic decision) will either become your Limiting Factor, putting a ceiling on your success and potential profit, or it will become your Foundation for Success, supporting your ability to differentiate your company, and capture both increased market share and per-home revenue.
The reality continues to be that Quality of Construction is no longer a differentiating factor. Hold on, hold on, I didn’t say it wasn’t important. I didn’t say it wasn’t essential for leading builders to build a quality home. I didn’t say homebuyers don’t care about quality. What I DID say is that your construction quality is likely no longer a compelling reason why your homebuyers decide to purchase homes from you. It is the baseline expectation of every valid prospective homebuyer today. It is the cost of entry to get in the game. It is rarely the key decision-making factor which will tip the scales in your favor. Every builder claims “We build a quality home.” Yada. Yada. Yada.
Whether that should or shouldn’t be the case is not the issue. And by the way, prospective new homebuyers’ Perception of Quality may be greater or lower than your actual quality of construction techniques, practices, expertise, labor and materials. You may, in fact, build a higher quality home than your competition, but if they do a better job of marketing their “Quality”, then the perception is, erroneously, that they build a better home. Perception IS reality. It’s all that matters. Truth is in the eye of the beholder. Unfair? Maybe. True? Undoubtedly.
Which brings me to my central point: influencing prospective homebuyers’ perception of your company and your products should be a central component of your business plan to survive, and ultimately, thrive, in the reality of the new marketplace. It is all about taking control of how you manipulate potential and current buyers’ impressions of your company, your brand, your homes, your included and optional features. Yes, “manipulate”. It’s what all smart retailers do, it’s not a sin, it’s operating strategically and with intent.
In my opinion, few homebuilders really, truly, absolutely, deeply, understand consumer shopping behavior, consumer decision-making behavior, and the intricacies of what homebuyers are searching for in a new home (not to mention how to verbally and visually communicate solutions to those needs). If you take a non-emotional, non-defensive look at contrasting our industry with most other major consumer goods industries (as well as hospitality-type service industries), it is actually shocking how little time, attention, resources and dollars our industry spends on the act of analyzing consumer demand, and how we can and do influence our prospect’s perception of 1)our end product, 2)the shopping experience and 3)the actual homebuying experience as well.
What can you do to have more impact on your customers perceptions? Do more to create buyer-centric vs. builder-centric philosophies. Figure out how to get into the mind of the consumer, and really understand what they need from their shopping experience, whether they are shopping at a supermarket, at a high-end specialty retailer, at a car dealer, at your sales/information center, or at your design studio. My mission is to prompt you to Think Like A Consumer, and Act Like A Retailer, so you can reap the rewards of being aligned with customer needs. These rewards include increased revenue, improved customer satisfaction, more referral sales, and streamlined internal processes.
Along the way, maybe you’ll pick up a few bonuses such as happier and more dedicated team members, reduction of costly mistakes, an elevated brand image, and some superb ways to differentiate your company and create a compelling reason to buy from YOU.