Press | October 1, 2004

Master and Commander

By Pat Curry

Builder: The Magazine of the National Association of Home Builders


The bedroom color scheme is orange and black, with a “Go Mustangs” pennant on the wall. A high school year book is lying open on the bed, and the books on the desk are from its reading list. A cork board in the kitchen has the swim club schedule and a flier announcing YMCA soccer tryouts.


Now that’s detail, and it can make all the difference in winning the battle for a buyer’s heart. The high school colors and information about nearby activities immediately give the customer a vision of life in the house and the community. The abstract becomes more real-and desirable.


Those kinds of touches are among the tools McMillin Homes (a division of The Corky McMillin Cos.) has used in its models to help the builder stand out from the crowd in a master planned developments.


“You can go through a model that’s stunning but not have an emotional connection,” says Sandy Perlatti, vice president of marketing for McMillin Land Development. “We’ve had a bunch of fun. People go in, and their little girl sees a princess-themed bedroom and says, ‘Oh, Mommy, can we buy this one?'” Creating points of differentiation in master planned developments can be a significant challenge. The product offering itself often is tightly controlled. Builders have become accustomed to operating within a strictly defined square-footage range and architectural style, and they often are targeting the same demographic with similar products, square footages, and price points. It’s simple for a buyer to drive down the road-or even walk around the corner-to visit the competition, so the ability to forge a deep connection with the buyer becomes vital.


At its core, differentiation in a master planned development is a branding issue. Expects in the field identify five key ways that builders can help themselves stand out from the competition:


  • Market research to identify and meet an unfilled niche
  • Creative marketing and targeted communication with prospects
  • Rich architectural details, especially in elevations
  • No-holds-barred model merchandising
  • Professionalism in the sales experience


Know Your Market

The process starts with finding out who the buyers are and what they want in sufficient detail to identify unmet needs. This goes far beyond the general buyer demographics of first-time and move-up to reach out to people in particular life phases and with identifiable passions such as sailing, cooking, art, and the environment.


“Spending extra time and dollars to find what’s unique to the submarket and then responding to it in the merchandising and design is critical,” says LeeAnn Edwards, project manager of Sycamore Creek, an 1,800-unit development in Corona, Calif., being developed by Fieldstone Communities. Market research and focus groups might identify a lack of products geared to families with teenage girls who need extra counter space in the second bathroom to spread out their makeup and hair-styling products. It could reveal an opportunity for sports enthusiasts, who would value having a bathroom located near the garage door and the laundry room to change clothes and then toss their uniforms in the wash.


Michigan-based builder/developer Ivanhoe-Huntley Homes does focus groups before opening all of its communities. “We bring architects from around the country to come up with creative ideas,” says partner Gary Shapiro. “As lifestyle changes, you have to continually adjust to it. We can be site specific to the target market.”


By working with the local community development corporation and listening carefully to neighborhood residents, Petr Stand has been able to design urban housing that buyers want, that promotes personal safety and instills civic pride. A principal with New York City-based Magnusson Architecture and Planning, Stand currently is working on Melrose Commons, a 35-block redevelopment program in the South Bronx. His group of townhomes has only had one incident of graffiti in five years. “People respect the buildings,” he says.


Melrose Homes, a community of three-family units, had several features recommended during focus groups that ran counter to the common wisdom of the city’s real estate community. The first was making the units alley-loaded because the residents said pushing the houses back from the street to accommodate driveways restricted their view of the street and made them feel less safe, as long as there was room for a deck to have cookouts, they didn’t mind losing backyard space to accommodate a garage.


They also had vestibules, a direct contradiction of the status quo, Stand says.


“It had become common in affordable housing to open a door and be in a living room,” he says. “People said, ‘When I order a pizza, isn’t there a way to have the pizza guy come in and not see all our stuff?’ It was the most brilliant reason for a vestibule. Before, I was designing for marketing people. Now, I’m designing for people who live there.”


Introduce Yourself
The goal here is to tell the right story in the right way to the right people. Marketing your message in a way that makes people stop flipping pages or channels is definitely a way to pull away from the competition. Home builder branding guru David Miles, president of Denver-based Milesbrand, has built his company’s unparalleled stash of awards by creating marketing campaigns that draw out what’s powerful and unique about a builder. Whatever the marketing message, it needs to be creative and consistent at every point of contact.


The Orange County division of Standard Pacific Homes uses an extensive buyer communication program “way up front,” says Karen Spargo, vice president of sales and marketing. Immediately after conceptual floor plans are developed, they’re posted on the company’s Web site “so we can try to create an early story about what we’re building.” Prospects who sign up for the company’s interest list receive monthly e-mails as early as seven months before the opening of sales.


McMillin Homes used every opportunity to communicate the unique position of Liberty Station, the redevelopment of the Naval Training Center in San Diego. For the grand opening, the builder embroidered the community logo on sailors’ hats and mailed them out as the invitations, Perlatti says. A Web site tied into the community’s history, as did the print campaign and direct mail, with tag lines such as, “Not far from where Naval officers issued orders, there are homes that still command your attention.”


To create a buzz about the pedestrian focus of the community, which features a promenade and a farmer’s market, the builder gave buyers two beach cruiser bikes as a move-in gift. “That’s been a big hit,” Periani says.


Dazzle Them With Details
One of a buyer’s initial filters will be the elevation. Thea Harness, director of architectural review for the 1,700-acre BridgeMill development in Canton, Ga., sees color choice as a differentiator. Builders are either “willing to be out on the edge color-wise” or are more conservative in their choices; both will help establish their brand with buyers.


Material choices can have an impact, as can unusual items such as stone-columned entranceways or wrought-iron railings instead of the standard wood pickets. Simple additions such as a detail plaque by a front door or shutters with hardware or cutouts add richness with minimal expense. If there’s a cantilevered bay window, add some brackets. Install pediments above windows and size shutters so they actually close over the window.


“Those things do matter,” Harness says. “A good builder is in tune with that.” Landscaping details often are controlled by the developer-or added by the buyer- but Harness says he’s seen some builders use different colored mulch and artistically set boulders to achieve a unique look and feel.


“You can take an ordinary house and make it very personal,” he says.


Shapiro of Ivanhoe Huntley Homes considers creative architecture to be one of his company’s signature points. He’s happy to have other builders at the same price point and square footage nearby, as long as there is “cohesive cooperation on the curb appeal,” with all the builders maintaining the same level of quality in landscaping, signage, and site maintenance.


Developers agree that cosmet details can make a huge impact without adding significant cost. Sycamore Creek “emphasizes the edges rather than blanket requirements of 360-degree architecture,” Edwards says. She holds regular meetings between builders, encouraging them to talk about how they can vary their plans and details to give each community a unique appearance to appeal to different buyer segments.


“Builders will take their team of people, cruise through each other’s models, and talk about them,” Edwards says. “Christopher Homes is one of our builders. The president of Christopher Homes was driving with his team and loved the roses in front of Fieldstone’s houses. He came up and said, ‘We’re going to have more color.’ Within a day, there were flower beds. Buyers benefit from that friendly competition.”


Of course, sometimes even developers realize that themes can be limiting-and boring. Perlatti recalls one large community in which everything from the houses to the signage had a colonial Spanish theme.


“At the end of 10 years, we were dying for a French country,” she says. “We’d painted ourselves into a corner. The public didn’t get tired of it, but from a creative standpoint, how many provinces in Spain can you name your projects after? At the beginning, we had a pretty rigid structure on the guest builders. Toward the end, we loosened up.”


Max Out The Models
Miles says if he had to choose one area to make a statement in, it would be in the models.


“The surefire way to stand out is to do a better job of merchandising the models,” he says. “Customers will spend more time there and fall in love with them, and it gives your salespeople more face time with the prospects. Out-merchandising the competition is where I would go.”


The goal, he says, is to create an emotional connection that will help people envision living there. “Better merchandising equates to a stronger emotional experience.”


Better merchandising doesn’t necessarily mean spending more than the other guy. It means spending wisely to maximize the impact. Atlanta-based real estate marketing consultant Ginger Frailey says the best merchandising is married to the unique marketing positions of the development, whether it’s fun for the whole family, a nostalgic small-town feel, or elegant sophistication. Builders know what those positions are when they buy their IQ’s and can direct the designers to embrace the community’s theme or feel. For a desert community, The Corky McMillin Cos. had a model with a dune buggy in the garage.


To be sure, the models need to resonate with the target buyer demographic. Standard Pacific Homes focuses its model merchandising on the options and upgrades that it considers to be its point of differentiation, particularly finished carpentry and countertop upgrades for higher-end buyers. For a plan designed for entry-level buyers or young families, more cost-conscious features are appropriate.


“If you’re trying to sell to first-time buyers or young families, their needs are very basic,” Perlatti says. “They tend to be struggling, especially in [the California] market, to be able to buy a home. You could put very basic amenities in it and have a few options for those with discretionary income.”


The Total Package
If the floor plans, the location, the pricing, and the square footage are roughly equal, what’s left to make a buyer give you the nod over the competition? The experience.


“It’s a branding issue all the way down to how people think about you when they show up on the site,” Miles says. ‘They’ll go with what fits their lifestyle best and whom they trust the most.”


The experience begins with the first interaction and continues well into the warranty period. A premium sales experience will start with clear, appropriate signage to direct visitors to the sales center, which should have a neatly kept parking lot, comfortable seating, and plenty of up-to-date brochures.


A company’s sales staff should be knowledgeable, well-groomed, and welcoming. ”A lot of salespeople still don’t get up to greet people when they come in,” Miles says, “no matter how hard builders train them.”


Follow-up can be a crucial point of differentiation, he says, giving you the opportunity to demonstrate that you really care about them and want to help them find what they need and want in a home.


As part of the total package, salespeople can make a tremendous impact.


“Anyone of these things gives you a competitive advantage,” Miles says. “If you can execute on all of them, it means you have really solid sales and marketing management.”


At Ivanhoe-Huntley Homes, prospective buyers are invited to “knock on any door” in the neighborhood and ask a homeowner about the company and the quality of the house, Shapiro says.


“We treat clients with respect,” he adds. “You can merchandise all you want, but if you’re not professional, you won’t be able to compete. The home-buying experience can be a wonderful one if you start off on the right foot. Our reputation is all we have.”