New Home Sales - Common Mistakes Made by Real Estate Developers and Builders in Marketing and Advertising their Communities

At a recent luncheon, I had the opportunity to discuss with a number of on-site builders representatives the perceived weaknesses in their respective company's marketing and advertising campaigns.  Although hindsight is 20/20, the comments did reveal certain common criticisms of how real estate developers plan, implement, and measure the success and failure of marketing and advertising campaigns.  Here were the top 10 complaints:

1.         Vanity Marketing - Poor Resources Allocation by Spending on Brand Awareness.  Real estate developers often engage in image or brand awareness advertising and marketing campaigns.  Although image or brand awareness advertising should be included in the overall advertising and marketing plan, general awareness advertisements have a very low return on income, if any, and do little to generate traffic or sales at individual developments.  If you are a part of the project management team participating in advertising and marketing decisions, strongly suggest that resources are better allocated by placing targeted advertisements to the right audience as opposed to general advertisements to an audience that is geographically or demographically unlikely to purchase at the developer's projects.

2.         Unrealistic Expectations regarding Immediate Results of Advertising and Marketing Campaigns.  Real estate developers often hold unrealistic expectations and views regarding the impact that certain types of advertising or marketing will have regarding the generation of traffic and sales.  A billboard, television advertisement, or radio spot will not overcome buyer objections based on improper pricing, poor product positioning within the housing market, or poorly designed communities, living areas and amenities.  Sometimes, the best allocation of resources is to cut back on advertising campaigns and focus on repositioning the community in the housing market.

3.         Inefficient Decision-making - Missing Trends or Following Trends.  Real estate developers often believe that their competitors have better marketing insights and may be quick to jump on the bandwagon without analyzing whether the marketing or advertising campaigns are appropriate for their communities and properties.  Often, developers adopt a "herd" mentality and base their marketing and advertising decisions less on what they are about and what they want to achieve and more on how and where their competitors are advertising.  Worse yet, some developers take a wait and see approach to see if the marketing tactics used by their competitors actually work and simply move too slow to adapt to market conditions and stay ahead of trends.

4.         Sustained Implementation - The Short Sighted View.  Real estate developers are often quick to take advantage of technological and other trends and develop marketing and advertising campaigns only to abruptly stop the campaigns and change directions.  Marketing and advertising campaigns cannot be judged by a single placement or even a series of placements over a short period of time.  To be effective, marketing and advertising campaigns must be sustained and message must be repeated on a regular basis to have the greatest impact.  All developers want their marketing and advertising campaigns to generate traffic and sales immediately.  However, marketing and advertising campaigns are akin to trees.  They need to be watered, nourished and given time to grow.  You can't dig up their roots every 4 weeks to see if they are growing yet.

5.         Relying on One Tactic Only - The One-Trick Pony.  Real estate developers often rely on a single marketing strategy or a single advertising campaign.  Instead, a broader integrated approach may be more likely to expose their properties to the greatest number of people.  You can't just put up building signage anymore than you can rely solely on print advertisements, direct mail or internet marketing.  It must be a broad, multi-pronged approach with an integrated design and consistent message.

6.         Poor Implementation - Ready, Shoot, Aim.  Real estate developers often will develop a "we tried that and it didn't work" attitude towards new ideas.  The simple fact that it was tried and failed without more analysis of why it failed is meaningless.  Often, an advertising or marketing campaign fails not because it had the wrong message or was a bad concept - rather, it was poorly executed with poorly written marketing copy, poorly designed marketing collateral, or the campaign targeted the wrong audience for the developer's community.

7.         Missed Leads - Buy Now or Be Dammed.  Real estate developers need to carefully monitor the performance of their sales staff.  Often, there is a "buy now" focus with little or no follow-up on long term leads.  There are some prospects that need to be developed or nurtured over several months as opposed to several days or weeks.

8.         Not Communicating Value - Telling versus Showing.  Real estate developers often believe that they offer the best product with the best materials at the best price.  As a result, there is a tendency for developer advertising and marketing campaigns to have a builder-centric theme that attempts to tell the prospect that they are getting the best deal.  Instead, a marketing or advertising campaign that focuses on the lifestyles and needs of the customer may simply be more effective. 

9.         Lack of Integration of Marketing Tactics.  Real estate developers sometimes fail to understand that sales is a multi-step process.  It is unusual for a prospect to visit a display once and then write the same day.  Prospects must be cultivated with a well-planned consistent message delivered on a regular and consistent basis.  A single e-mail is unlikely to generate a sale.  A sustained effort integrating e-mail, handwritten notes, telephone calls, additional showings, etc. is more likely to result in a second showing and a sale.

10.      Monitoring Campaign Performance - Not Adequately Measuring Success and Failure.  Real estate developers often fail to plan, measure and test their marketing and advertising plans.  Planning and reviewing a marketing or advertising campaign should not be a one time event where the "plan" after being initially approved is, thereafter, etched in stone.  If you measure the performance of a campaign and make periodic adjustments, it is more likely to produce better results.  It is a simple fact of life that not everything can be planned and decided in a single instance or at a single meeting.

If you have worked with or represented real estate developers, please post a comment regarding the best and worst practices of real estate developers in the planning, implementation and measurement of marketing and advertising campaigns of developers.