Spending a few days in Orlando, FL in early January might sound like a nice vacation, but I wasn’t there to enjoy the weather or theme parks. Rather, in the days leading up to the National Association of Home Builders’ (NAHB) massive trade show and conference, the International Builders Show, I was in a classroom with two dozen marketing professionals, builders, and developers for NAHB’s Master in Residential Marketing (MIRM) classes.
The MIRM designation is among the most prestigious in the new home industry and is the highest level of achievement for new home marketing professionals. Successfully completing a MIRM designation represents years of industry experience, serious coursework, and a grueling case study process.
As Mike and I continue our journey through the MIRM process, I’ve been struck by a number of consistent lessons. In an effort to share this knowledge, I’ll be detailing the MIRM journey on this blog. This post is the first in a series to explore key takeaways and industry best practices.
Today’s post focuses on real estate marketing research tips from the MIRM classes. Three tips in particular deserve special attention:
- Market Research Matters – And It Can’t Be Anecdotal: Most builders and developers understand that to be successful, they need to conduct some level of research. Gut decisions or intuition may yield a few successes, but isn’t sustainable and can deliver costly mistakes. Rely on market research that includes both qualitative (focus groups, psychographic research) and quantitative (demographic statistics, buyer surveys) metrics. Anecdotal feedback from sales agents, Realtors, and previous buyers can be helpful, but your market research must begin with quantitative analysis. Your research should help you identify exactly who your buyers are. When looking for psychographic details, one great resource is the Claritas zip code look-up for segmentation.
- Don’t Overlook Research to Inform Your Financing: It’s critical to understand who your potential buyers are, but don’t forget about using your market research to inform financial considerations, such as operating statements and cash flow pro formas. For example, setting a realistic absorption rate based on your location can have a huge impact on your bottom line. Anticipating a variety of potential scenarios also allows you to be more flexible as a new home development progresses. This analysis is key because it will help your marketing team establish pricing strategies.
- Marketing Plays the Central Research Role: Perhaps the most consistent takeaway throughout these classes and the MIRM process has been the role that marketing professionals must play when it comes to research and analysis for new home communities. Whether internal or external marketing professionals, their expertise is central to delivering robust research. Collaboration with sales and construction teams is important, but the industry standard dictates that the marketing team should take the lead in conducting research, analyzing the results, and setting the strategy. They need to be pulled in at the early stages of project development. Too often builders and developers don’t include or invest in this marketing expertise. As national surveys have shown, those builders that do involve their marketing team early and often are more successful.
These best practices can help a builder or developer better position themselves for successful projects. Leveraging their marketing resources early — whether internal, external, or both — is critical for them to thrive.
Stay tuned for additional posts in the coming weeks on marketing strategy and more lessons from my MIRM journey!