In this edition of Executive Forum, Joan Webb, Former CMO and advisor to The New Home Company, and John Galante of AE Ventures, host a discussion on how to position new home builders for success when it comes to competing with the used home market. Joining them are Tim Costello, CEO of BDX, and Melissa Morman, Chief Experience Officer at BDX. Chris Lynch, Manager of Builder Services at Nortek Control, delivers the opening remarks.
Tim Costello presents a case for drastically increasing profitability through a set of proven strategies. “It’s a progression of understanding customer needs and customer behaviors,” he says and goes over the importance of using technology and market research in order to increase profit margins. Tim goes over how society affects the industry through factors like social pressure, functional irrelevance, and reliability, which contribute to one’s desire to own a new home.
The group goes over all the areas in which new homes are better than used ones, which include energy efficiency, ability to customize to best suit your family, lower maintenance costs, better floor plans and others. They also discuss the challenges in selling new homes compared to old ones, which are usually perceived to have more character, sense of community, and be in an established neighborhood. “If you just speak to what customers already believe, you will have a 15% to 25% premium,” Tim says and adds that to further increase premiums, companies need to create better marketing strategies.
Melissa talks in-depth about the concrete marketing framework that needs to be adopted in order to attract as many new home buyers as possible. She mentions the “joy gap” that often appears after buying a new home. According to her, it’s up to new home builders to capitalize on the novelty of buying a new home and communicate to customers before they decide to build a used home. Melissa shares results of BDX’s research when it comes to what images and videos to use in ads in order to influence potential buyers. She shares a series of videos which were developed with that goal in mind, which have been successful in getting people to look at more new homes.
The group discusses the importance of building messages to buyers and target people who are already willing to buy new homes. Tim goes over the top benefits in terms of lifestyle, security, energy production, and income generation that can be used to approach potential home buyers.
Watch this presentation to learn more about selling and promoting new homes in order to achieve record profits.