Episode Transcript
[00:00:00] Hey, home builders, what if I told you that 80% of your potential customers aren't even thinking about buying a home right now? Shocking, right? While you're out chasing the 3% that are actively shopping and the 17% that are still gathering information, you're missing out on a goldmine of opportunity. But here's the exciting part. Your competition is overlooking them too. And this is your chance to get ahead. These are people with growing families, young professionals looking to buy their first home, empty nesters looking to downsize.
[00:00:34] And they're all waiting for you to show them the possibility of their dream home. Imagine tapping into this massive market and creating customers before they even know they need you. That is the power of the larger market formula. A tried and tested approach that we've used with dozens of home builders in this digital marketing segment, I'm going to show you how to revolutionize your marketing approach, how to plant seeds in the minds of potential customers and sit back and watch your business grow. Are you ready to unlock the secret to reaching that hidden 80%? Let's dive in and transform your home building business forever. So what is the larger market formula? It's a diagram that helps you visualize the level of awareness that prospects have with their problem. And in this case, as it applies to the home building industry, it's their housing problem. So I'm going to show the graphic and we'll go through it together and I'll help you make sense of it and understand how to take advantage of it. So the larger market formula breaks down the entire audience of all the home buyers in any market. And it shows how they fall into four different categories.
[00:01:42] The first category is actively shopping. This is the buying now group here, they make up about 3% of the entire market. Now, this group is in active buying mode. They're out there talking to sales reps. They are going in and out of show homes and sales centers. They're talking with OSC's. They're asking a lot of questions about what purchasing a home looks like and what you have for availability. Now, the thing to understand is that this is the most competitive segment of the market. You and all your competitors are hungry to chase down these people because they're in active buying mode. They're shopping today, right? So if you look at all of the promotions that home builders typically do, they're focused on this group of the 3% that are buying today. This group's aware of their housing problem, they've researched solutions and they're actively visiting show homes and engaging salespeople but the main thing to understand about this segment of the market is that it's highly competitive. And so everybody is trying to chase these people down because this is your low hanging fruit. These are the easy sales to make. So the next segment that we have is the information gathering group. So this group's aware of their housing problem and they're actively gathering information and getting ready to buy. Oftentimes they're exploring their different home building options. They're looking at costs, but they're not ready to commit yet. The thing is, is that oftentimes when these people come into a sales center or show home, it feels like to the sales rep that they're a waste of time. Oftentimes salespeople will refer to this group as baseboard kickers. So it's not that they're not good leads or valuable prospects, it's just that they're not quite ready yet. Now the next major segment below that is the group that's problem aware and they make up about 20% of the entire market. So this group is aware that they have a housing problem, but they haven't started looking for a solution yet. The last group that we have down here is not problem aware and they make up 60% of the entire market. So this group doesn't know that they have a housing problem yet, but they feel some discomfort. But the funny thing is, is that everyone else around them can see and it's clear to them that they've outgrown their home or their home no longer is a fit for them, but they still can't see it. So why is the larger market formula important?
[00:04:08] The concept here is that, again, that top segment, the 3% that are buying now, is where everybody is focusing their attention.
[00:04:18] Very few people are focusing their attention on the group that's information gathering. Some home building marketing professionals are starting to create resources and marketing for that segment. But even still that's only 20%. The 20% that's problem aware but hasn't started looking yet. And that 60% that's not even problem aware, that's 80% of the marketplace. And so the concept with the larger market formula is what we want to do is focus different marketing tactics and messages and techniques on all four of these segments. And our job as marketers is to drive people up to the top of that pyramid. So we want people that are problem aware that haven't started looking yet. We want to encourage them to start looking. We want to encourage them to start doing their information gathering. And once they're in that stage. We want to give them all the information that they need in order to make a smart buying decision and ultimately bump them up to the top 3% that's buying now. So when you address all the different levels of the pyramid, you expand your market and you create a pipeline of future customers. So the one thing to keep in mind with when you market to these other segments is you have to focus on education, helping people understand what their problem is and how to potentially solve that problem.
[00:05:44] Where the magic of this formula really works well is that when you get in front of those other segments, that information gathering segment, that problem aware segment, and even the segment that's not problem aware, when you give them that helpful content and that education, and you play the role of an advisor rather than sales, you develop rapport and you develop trust, and you position your company differently than every one of your competitors. And so what happens is, as they climb through the different levels of this pyramid, when they do get to that top 3%, you have superior positioning, you have an advantage over all your competitors because you've built rapport, you've built trust. You've become an advisor to this prospect and almost guaranteed to make their short list. So if you want to download a copy of this diagram, just go online to Velocity 23 dot LMF and you can download this graphic. So let's dive into how to tailor our approach now, or tailor our marketing strategies so that we can reach each one of these different levels. All right, let's talk about that first segment, the buying now group that makes up about 3% of the market.
[00:07:03] This one's pretty straightforward. This is the one that most home builders are used to focusing on. What you want to do is you want to focus on what your competitive advantages are and you want to focus on closing sales. So what makes you stand out and gives you a unique advantage over all your competitors? That's what you really want to focus on in your marketing. Maybe that is how quickly you build or I how environmentally friendly your homes are.
[00:07:30] You want to focus on what that competitive advantage is. You also want to showcase your unique selling proposition or your unique value proposition. What makes you unique and different compared to all the other builders in your market? And the last thing, and this is probably the most important part of it, is making sure that your salespeople are actively following up with these prospects. You have no idea how poor most salespeople's follow up is. You need to contact a prospect at minimum, seven times. At absolute minimum.
[00:08:07] Most salespeople won't go that far. Most salespeople, three, four attempts, and that is it. So one of the things that we do up here in the Edmonton marketplace is we secret shop home builders. And out of dozens of builders that we've secret shopped, it's shocking how few salespeople, for one, ask for contact information or even introduce themselves, which is unbelievable. But for two, how rare it is that people follow up with an active lead. If somebody, if a prospect in the digital age now where most people are shopping from their couch, if a prospect has taken the time to come into your show home, there's a level of intent there, of buying intent, right. That it takes effort to get off the couch and drive to a new development and come in and visit one of your show homes. Those salespeople should be absolutely capturing their contact information and following up. Okay, let's talk about the next segment. Now, this is the information gatherers. They make up about 17% of that market. So with these people, they're still very much in research mode. They're focusing on, you know, trying to understand what your offerings are, are trying to understand the home build process, they're trying to understand costs, they're trying to understand which communities are available and which makes the most sense for them to buy. A lot of times they're even focused on, like, what type of home is going to be a good fit for them in their lifestyle. Right. Lifestyle is a big one that we push as home builders. So helping those people to understand and answer those questions and do that research so that they feel empowered and they feel like they have the knowledge they need to make a smart home buying decision, that's what we wanna focus on for these people. So another strategy for reaching this group and providing value is offering virtual tours on your website. Whether that's matterport or iguide, both work well. My personal preference is iguide. I like the format a little bit better. So make sure you have virtual tours of your different models or of your show homes on your website. That's super valuable to somebody that is still in research mode. And the thing to keep in mind with research mode is they may not be in the show homes yet, some will, but a lot of them are still couch surfing. They're still relying on your website to gather as much information as they can. And that further emphasizes the importance of having a really good website with a ton of valuable content on it. Another strategy that works really well is using self showing software like enter now and some of the other competitors on the market, allowing a prospect to be able to go in and view a show home without having to interact with a salesperson is really powerful. And I know that it, in a sense, is uncomfortable for us as builders because we want our salespeople to be involved. But the thing that we have to understand is that people buy when they're ready to buy. We need to stop trying to sell homes how we want to sell, instead sell homes how people want to buy. Sales makes people uncomfortable until they're ready. So whatever we can do to empower them to do their information gathering, collect the information that they want and that they need, if we can do that without having to involve a salesperson, we're actually building better rapport with that prospect. And another useful tool for this segment is testimonials. Social proof is huge. So people are going to Google reviews and they're seeing what recent customers have said about your company. The best thing that we can do is encourage getting testimonials from happy customers. The other thing that you can do to encourage getting positive reviews from a customer is offering them a gift card for leaving you a review. Now, some builders say, well, that's not ethical. And I always say, yes, it is. People's time is valuable. There is nothing in it for somebody that's leaving a review. There's everything in it for you as a builder. So offer to compensate them for their time. You're not trying to persuade them to say something that's not truthful. And you can say that, say, you know, we'll send you a $25 gift card if you will take the time to leave us your honest feedback. So that's another way that you can focus on to get testimonials. Testimonials are huge.
[00:12:41] When we sit in front of people and tell them about ourselves, it's a sales pitch. But when a third party that has nothing to gain from it says, I used them and they were awesome. That holds a ton of weight with that prospect. And that really can make the difference between a buyer going with one builder versus another builder. And if you want to get really great testimonials, see if you can organize an opportunity to go out and film a video testimonial with those people. You can do it via Zoom, or you can actually have a camera crew go out to their new home and shoot a video. There's a home builder in the market that we've worked with that does this exceptionally well, and I encourage you to go and check them out. Their name is Copper builders. It's copperbuilders.com dot. They're a custom builder based out of the Carolinas. And they have some of the most incredible testimonial videos that I've ever seen. And I've been in this industry for 13 years. They have incredible customer testimonials that really draw you into the story and really paint this beautiful picture of this experience that they had building with your company.
[00:13:52] Creep their YouTube channel, or look on their website and see what they've done with testimonial videos. They're really powerful. Okay, the next segment that we have to focus on is the problem aware segment. And so this group makes up 20% of the overall market. So for this group, we want to educate them about the benefits of buying a new home versus a resale home or an existing home. Because a lot of the times we're not competing with the other builders in our market, we're competing against the resale market. So we wanna talk about the benefits of buying new, and we really wanna emphasize that because this segment, they're gonna go one of two directions, typically, right? They're gonna go resale or they're gonna go buy new. So we wanna encourage and influence them through our content to go the buy new group. The next thing that you wanna focus on with this segment is addressing common problems about buy new or common myths about buying new. So a lot of the times you see people say new homes just aren't built to the quality standards that old homes were. We all know that that's not true. But for somebody who's considering buying a new home or buying a home, emphasizing and dispelling those myths can be really powerful for them, helping them to understand that, yes, actually new homes are built to a higher quality standard than old homes are. Right. And so all we want to do at this stage with these people is start to change their belief system. We want to help shift their belief system. All these little things that may stand out as being negatives for those people, we want to flip them and show them that it's actually a positive. Right. So we really want to focus on educational content and influential content. That's going to start to reshape their belief system about buying new. That's going to help send them off in the buying new direction. And lastly, we want to focus on the long term value of buying a new home. So there's advantages to buying a new home over a used home. You don't have roofs to replace and furnaces to replace and renovations to do. And values tend to increase as the community fills out and that phase comes to completion. Whatever it happens to be whatever long term value you want to impress upon that person, you need to create content around that to help them to understand that there's actually a lot of advantages to buying a new home.
[00:16:17] This is especially important, too, for first time home buyers.
[00:16:21] Obviously a homeowner myself, when I was first buying my home, I had no idea that a new home was even an option.
[00:16:29] I always just kind of assumed that brand new homes are something that you do later in life. I had no idea that a new home was even feasible or realistic when I bought my first home. So that's another thing that people really need to educate buyers about. Like, yeah, you can buy a used home or an existing home, but as a first time home buyer, you can still buy a new home as well. And here's all the perks and advantages of doing so. All right, now we have our final segment. This is the segment that's not problem aware. This is probably the more challenging segment to nudge up the pyramid, but it's also one of the most fun. The way that you're going to reach this segment of people is by creating content and selling dreams. You want to focus on selling the dream of being in a new home. Here's how your lifestyle is impacted. Here's all these cool man caves, or here's what your kitchen or your ensuite bathroom could look like again. These people, like we talked about before, they can feel that there's an issue there, but they have, it hasn't clicked yet that they have a housing problem. So we want to sell the dream, the what ifs, the wouldn't it be nice to have, you know, that nice big garage or shop? Or wouldn't it be nice to have that secondary suite in the basement supplement your income or whatever it happens to be. Focus on planting those seeds of how life can be different. That's how you're going to reach this segment of people. Once they start catching on to those seeds, that's when it clicks for them in their head and they start to wake up and understand that, hey, my current living situation is not ideal. Boom, we've moved them up to the next segment in the pyramid, right? And then now those strategies take over. All right, now let's talk about how do we implement this formula. So the first thing that we want to focus on is content creation. Content is king. I don't care who you talk to, I'll debate anybody about it. Content, good. Content has the ability to change people's minds and shift them off in completely different directions. So we want to make sure that we're capitalizing on using content. So what you want to do is you want to come up with a content plan of what you're going to produce and when you're going to publish it for each one of those segments. And you want to focus on different formats of content for each one of those tiers as well. Blogging, social media, video, even webinars. So few builders do webinars. And it's surprising because us as marketers, we attend webinars all the time, right? Because we want to learn. Buying a home has a learning curve to it for most people. And we often forget that in the industry because we're in the trenches and we do this day in and day out. But a lot of people, even people that have bought a home before, bought a resale home or an existing home, they don't understand the process of buying a new home. It's daunting. There's so many steps. It's foreign. So we have to educate them. And the best way to do that is with content. So you could hold a monthly webinar and have people join a Zoom call and walk through the process of what is buying a new home look like. You'll find that that's super helpful to potential homebuyers. It also helps you to generate leads, right? Cause people have to register for those webinars. So that's a strategy that you might wanna experiment and play with. Another format for content is testimonials. And so I mentioned before that video testimonials are super powerful. Even written testimonials are really powerful. And you should have testimonials on your website that social proof can sway somebody's opinion and change the direction of their home buying journey. So definitely tap into that. Be collecting testimonials from every single person that buys a home from you. Okay, so what marketing channels are you going to use? Obviously, I'm very fond of digital marketing. I'm kind of poo poo on traditional marketing. I think there's way more advantage and way more targeting capability and digital is just way more efficient. But you should be focusing on blogging. Every home builder should be blogging. I've got a future segment that I'm going to be talking about different kinds of content. We did previous segment talking about the importance of blog content and premium contents. Check out. That episode was full of great information.
[00:21:01] Blog content is super, super important. Not only does it help you to educate your customer, it also helps educate Google about what you're all about. And it can help you to increase your organic traffic. So your website ranks better in the search engines because you have all of these other pieces of content on your website that are ranking really well for particular keywords. Now that also brings up the next one, which is SEO or search engine optimization. And so you can do search engine optimization, basically tidying up your website and optimizing different pieces of your website so that it will rank really well in the search engines. So SEO is an important one. The thing to keep in mind is that with pay per click ads, it's a switch. You turn it on and you get traffic. And as soon as you shut it off, that traffic goes away. But with search engine optimization, it's a marathon. Okay? So to get your website rankings to really start to increase, expect to take, you know, four, five, six months, nine months before you're really starting to see a huge impact from that. But even though it's the long game, search engine optimization doesn't go away. So if you put budget into search engine optimization to optimize your website and your blog posts for like a year, as an example, and then you reallocate that budget to some other marketing tactic, you don't lose what you built, right? So you'll maintain that level of traffic. So it's the long game, it's a marathon, whereas PPC is like a sprint, okay? So that's an important thing to think about between those two channels. The other thing that you should be utilizing is email marketing. And so when you create a blog post, creating it is just half the battle. Now you need to distribute it, you need to get eyeballs on it. So send people links to the blog posts that you've written. Email marketing is something that I feel is very underutilized in our industry. And when most home builders use email marketing, they're just promoting their stuff. So stick to the 80 20 rule. When it comes to email marketing, 80% of the time when you're sending out emails, it should be helpful. You should be trying to provide value, trying to educate, trying to help people. 20% of the time it's okay to promote. So that might be like, hey, we've got these quick possession models, there's only three left. Or hey, we've got this new phase coming out in this community, or we reached this company milestone, whatever it happens to be. The other one that's severely underutilized too is a newsletter. It's really easy to send a newsletter once a month. And you can put all of that stuff into your newsletter. You can put in a couple links to blog posts that you've written, you can put in some kind of downloadable resource that is valuable to your prospects and you can put in those company milestones and the different promos that you have. Definitely send out a newsletter at least once a month. And then we can't forget about social media. And so one of the things that we always recommend to clients and to home builders is make sure that you're repurposing the content that you create. So if you've written a blog post, splinter that blog post out. You wrote a blog post, turn that blog post into, you know, Instagram carousel or come up with ten different tweets or different Facebook posts from that one piece of blog content. Use your blog content or your pillar content to splinter out and feed into your other social media channels. Social media, your job is two things. One, you want to engage with prospects, right? So when somebody comments on your stuff, comment back, really, really important. You want to engage your audience. The second thing that you want to do with social media is drive people back to your website. Your website is your most valuable marketing tool. It's the hub of all of your marketing. Okay? So that can't be understated. Another thing that you can focus on are community events and engagement.
[00:25:03] Again, I mentioned earlier that copper builders, copperbuilders.com, i mentioned that they have done a really incredible job with their video testimonials and collecting testimonials from customers. The other thing that they do incredibly well is they throw banging community events. They have these huge events where they have cocktail bars and they have live music and, you know, people coming out and hanging out and activities for the kids. And that's another thing that they do incredibly well. And I know that they create a lot of buzz in the community when they do that, and they sell a lot of homes as a result. So that's another thing to look at is putting on community events like that. All right, so the next step in implementing the formula is we need to measure our results, we need to measure our success. And so what we want to do is focus on some of the key performance indicators for all these different channels. Now, I'm not going to get into the details of all that in this session because that's an entire session or multiple sessions on its own. Focus on the key performance indicators for each of those different channels. That will help you to understand if what you're doing is successful or not. So to do that, we want to set up some analytic tools and, and dashboards and so there's a lot of different kinds of software that you can use for this. You absolutely should have Google Analytics on your website. The other one that you ought to have on your website is Google search console, both free softwares from Google and they help you to understand where's your traffic coming from, what are they doing on your website, how long are they staying there, what content are they consuming?
[00:26:37] And also Google search console helps you understand where you're coming up in the search results and which keywords you're getting traffic from. So two really important tools. I've said before, I'm a huge fan, big advocate of HubSpot. And HubSpot has a whole bunch of different tools for all different kinds of marketing channels built right into it, as well as reporting dashboards. This is a really powerful tool. So definitely have a look at HubSpot. The other thing that you can do is if you're using, if you're not using a tool like HubSpot, an all in one tool, and you're using a variety of different tools to handle all this, you can get a reporting software or a dashboard software such as what a graph. And you can connect all your tools to that so that you can have all your key metrics in one place on a really easy to view dashboard. So check out what a graph? It's a reporting software. It's really good. So once you have those tools and dashboards in place, you want to make sure that you're setting up those KPI's for each segment because you want to see how good of a job are you doing at moving people up the pyramid. And when you track those things, you'll be able to spot and identify where the weaknesses are, where your inefficiencies are. Now, the last step for measuring your success and measuring your KPI's is making sure that you're utilizing, where available, split testing. You want to be trying to continually test and improve upon what you're doing. The premise of doing split testing is that you produce, let's say it's a landing page to collect contact information. Let's say you're doing a pay per click campaign about a new community and you've got an offer on that page for people to sign up to get updates, but also to download a free community guide where they can learn more about the community. So you have your landing page with a form and your offer on it. That's version a. Then you create a secondary one called version b, and you test it out so that the traffic splits off 50 50 to each of these two different versions. And over time you're able to identify with your metrics. Hey, you know what version b actually is? Converting more visitors to leads than version a is. So when that happens, what you do is you make version b your champion. You get rid of version a and then you make a variation on version b and you call that version c. And then you run your traffic 50 50 to each one of those again. And then you look and see over time. Did version C beat version b? Right. You keep the winner, scrap the loser, make a variation of the winner and test again. That's how you do split testing. And what happens is that even if your traffic remains consistent over time, you'll generate more and more leads because your conversion rates are increasing. It is way, way, way easier to increase your conversion rates to collect more leads than it is to increase your traffic to get more leads. So it's this process of continuous improvement that's going to help us to get greater and greater success from the efforts of pulling in people from these different segments. And then I lifting them up through the pyramid. Okay. And the last step in implementing this formula is focusing on long term relationship building. So we all know that nobody goes out on a weekend and buys a new home. That process could take months sometimes. In some cases it can take years. So we need to make sure that we are getting in front of those people and building that long term relationship, establishing that trust, building that rapport, delivering great valuable content, and staying in front of these people for the long term. That philosophy is known as lead nurturing, and so we want to nurture them for the long term.
[00:30:32] So one of the ways that you can do that is making sure that you have a CRM system in place. Again, I'm a HubSpot certified partner. I'm very loyal to HubSpot. I think they have a tremendous product. That said, there are many other products out there, many other CRM systems out there. So find one that you like, but make sure that you implement a CRM system so that you can track the engagement and the activity of your contacts, of your prospects. And over time, that's going to allow you to be able to understand what their buying journey looks like. You know, another thing that you can look at are things like loyalty programs and referral programs. So every builder ought to have a referral program where if somebody refers somebody to you and they end up buying a home from you, that you give them, you know, $1,500 or $2,000 or $3,000 or whatever it looks like. But you should incentivize people to refer people to you. A referral, especially from a customer. A referral is always easier to sell than cold, than a cold prospect. Somebody off the street. So definitely make sure that you have a referral program in there. Talk about it often. Promote it to everybody, promote it to your audience. And now, lastly, and this is probably one of the most important things, is post purchase engagement. Okay. Pouring through reviews of people that have purchased from a home builder, I have seen more times than I want to admit. Once they have your money, you never hear from them again. So make sure that when somebody signs that contract and that contract is firm, make sure that you continue to communicate with that prospect. Now, the great thing is that you can do this really easily. If you have marketing automation software such as HubSpot, you can set up a drip campaign that's going to send them a, an email once a week or every two weeks that just says, you know, here's what's happening now, or here's something that you need to know about, or here's something that you need to prepare for so that that person feels communicated with. Oftentimes it's as simple as that. Just having a drip campaign that sends emails out automatically and that person will feel comfortable and not like you've abandoned them, that's really important.
[00:32:56] Same thing after possession. So after possession and going through that warranty period, you should have a similar drip campaign that runs we want to communicate with people. It's almost more important to communicate with people after they've purchased because again, getting back to talking about testimonials and how powerful that social proof is, we want to do everything in our power to encourage somebody to leave us a really great testimonial, sing our praises, because that is the kind of promotion that we cannot purchase as marketers and it has the biggest impact. So focus on that customer experience, that's really, really important. And that, my friends, is a larger market formula. Like I said, it is probably one of the most powerful marketing frameworks or marketing methods that you can use to really fill your pipeline for the long term. And I encourage you to strongly consider taking the time to build one of these out. It does take a while. It's something that you can do on your own, or you can reach out to an agency, reach out to velocity 23 if you're interested. But it serves you so well in the future because it really helps you to create that rapport and that trust with that home buying prospect long, long time before any of your competitors are doing that. And if you have that trust, and if you have that rapport built with those people, when that person is now getting ready to buy a home, they're going to come to you first. You'll be on that short list. You have a huge advantage over all your competitors in your market, so strongly recommend you do that again. If you want to download the graphic and some of these strategies just visited velocity two three.com lmf and you can download the graphic and you can get implementing it right away. All right, that's it for this episode. Thank you so much for tuning in. Please share this with a colleague. Please make sure that you subscribe to the show. We're trying to build our audience, trying to deliver big value. We've got lots of more exciting segments coming. We're going to be talking about HubSpot hacks for homebuilders. I've got some more great interviews lined up. Please make sure you stay tuned in. Subscribe to the channel, subscribe to the podcast, share it with your friends, and thanks so much for tuning in. Love you guys. See ya.
