Preparing Your Business for the Re-Emerging Market

This is the Selling More Homes podcast, episode number 223. Funding for this program is provided by Uverix, making clean, fresh, healthy air available to homes across North America. Visit germfreecleanair.com for more information. And by North Star Synergies, developing business, marketing, and sales strategies for builders and developers nationwide. This week, my guest is business development strategist, Jason August, on how to prepare your business for the re-emerging market. And you’re listening to Builder Radio on the Selling More Homes Media Network.

Welcome to the Selling More Homes podcast, where every week we bring you interviews, ideas, and information to help you sell more, earn more, and achieve more in this challenging housing market. This program is a production of Selling More Homes Media and the Selling More Homes Academy, now serving skills-building information and personal coaching to housing professionals around the globe. Now, grab a pen and paper so you can take good notes. This week’s program begins now.

Hello, everyone, and welcome back to another Monday Morning Sales Meeting. I’m Scott Stroud.

Last week, I mentioned a program that I attended at IBS, presented by Jeff Prager of Backroom Management Services. The program was titled, Managing Your Business for Exceptional Results.

During that presentation, Jeff showed a packed room of business owners and managers how tracking just seven key business metrics can tell an owner exactly where your business is today financially, where it’s heading, and precisely what actions to take to reach whatever goals you set. I was completely blown away by how simple he explained what I’d always thought were complex accounting strategies. Well, as a follow-up, Jeff has launched a series of short videos that describe his 786 concept in detail. If you’re a business owner and missed his IBS presentation, I encourage you to go to 786-dashboard.com and watch these videos.

That website, again, is the numbers 786-dashboard.com.

Now to this week’s program. This week, my guest is Jason August of North Star Synergies.

Jason is a business development strategist and works with builders and developments from all over the country. I cornered Jason in a hallway during the International Builder Show, fired up my recorder, and asked Jason what businesses needed to focus on to prepare for new business, for an upturn in the market, and what tools and technologies would be of most help. Here’s the interview.

Jason, welcome to the program. Thanks for joining us. Thank you, Scott, and it’s good to be here with you at IBS. You know, and I’ve got to tell our listeners, we’re standing here in the hallway at IBS. We tried to find a quiet place to talk so they’ll hear some background noise, but here at the Builder Show, what we’re seeing is a tremendous amount of confidence. In the last couple of years, people are saying, how are we going to survive? And now, what we’re seeing, by and large, is people here ready to re-engage. Now, North Star Synergies, the company that you’re with, has been around a long time. You’ve been in business development for builders and developers across the country. So, when we talk about getting back in gear and developing business, I think now we’re talking about growth.

What are some of the things that businesses need to think about or to concentrate on or focus on to get re-engaged and reinvigorated and to grow? Well, Scott, one of the things that we’ve noticed is that there is a lot of growth and innovation going on. And here at the show, there’s lots of different vendors with lots of new technologies, new ways of selling, new ways of tracking the construction process. And one of the things that we have seen is the successful builders and developers that will come out of this are the ones that have a plan, have defined goals and motivations for their company, and they base their decisions on those goals. So, for example, social media is a big buzzword in the industry, as it is in other industries.

Everybody’s talking about it here. As they should, because it is an important part of the marketing mix. It’s an important part of getting your customers in the door. It’s an important part of even service after the sale is completed. But a lot of times, builders will say, oh, social media, I’ve got to have that. Am I on Facebook? Am I on Twitter? Am I on StumbleUpon? And all these other sites that have come up over the years. And they do that. And they hire people who are successful bloggers. They hire people who are successful social media people with lots of Facebook and Twitter experience who can get them tens of thousands of likes on Facebook. But to make that most effective, Scott, everything has to be part of a comprehensive plan.

They have to know why they’re doing everything they’re doing. And also the messaging that comes across all these channels should be consistent. Because as a consumer, I don’t want to feel like I’m handed off to ten different people as I’m buying the home I’ll live in for the next five to eight years now that people are staying longer in their homes. So I want to have the best experience possible as a consumer. And I can do that if everything is presented in a comprehensive way. So you’re talking about a strategy and asking the big question that I think is the most important question we ask whenever we’re doing anything. And that is why. Why do I want to do this? For example, with social media, why do I want to engage?

It’s not enough just to be there without a purpose. And that’s got to apply to the other things, the other activities that we’re looking at in our business. Yes, it applies to everything from which CRM systems are being used, which building systems are being used. Even the contractors that you’re aligning yourselves with as builders, it can all be seen from a marketing perspective as ways to brand the company. If I’m a small builder and nobody knows me and I’m growing into a new market. If my main market is Denver, Colorado and I’m growing into the Auburn, Alabama marketplace. And I want people to get a sense of comfort that the home they’re going to be living in is one that’s a quality home. I can align myself with other companies.

I can have Kohler faucets. I can have appellate windows and other things that are manufactured by companies with values that are similar to the values I want to project. Okay, so we’re piggybacking off of known brands. Exactly. And brand recognition is more important now than ever. So we create our own brand in alliance with the brands that are the companies that we use in the home. That’s correct, Scott. Good. We’ve got strategies here. We’ve talked about the purposes. We’ve talked about asking why. The next thing would be tools. And you mentioned, and I know you’re big into technology. Yes. And as most young people are, we have a whole new set of tools that we can apply to our marketing, to our sales, to our processes.

And a lot of those are technology oriented. Maybe you can touch on some of the things that businesses need to look at as they’re developing. Having the right tools, like building a house. Having the right tools makes for a better job. Having the right tools in our infrastructure makes for a better company. What are some of the things that you’re seeing successful businesses, particularly startups, using in terms of technology and tools?

There are lots of new tools available, but there’s a lot of ways that you can use existing tools in new ways. For example, when you’re talking about social media, customers will interact with you on Facebook or Twitter. There’s a company out of Malaysia that I’ve been working with that has taken the approach of using social media as a way to get customer feedback. As a communication source for warranty issues, you typically think of warranty as handling a lot of negativity. And what they’ve done is they’ve turned it into a positive spin because they’ve put a focus on it and they have been able to respond quickly to their customers’ needs and then gotten their homeowners to give positive feedback and testimonials through their interactions that they can then use to help sell new buyers.

Okay. So along with that, you’re saying being creative and innovative, not just with new products, but with old products. In terms of re-engaging today’s market, how important are creativity and innovation to the success of a business? Well, that’s how you differentiate yourself is by being creative and innovative.

You can find what most people want and build that. And if you’re not innovative and you’re just copying everyone else, then you’re going to end up competing on price. And I don’t know a lot of builders today, Scott, that want to compete solely on price because that drops your margins.

Everybody loses. Yes. Innovation differentiates you and sets you apart so that you don’t become a commodity product. So in the past, through marketing, one of the things that we’ve always looked for is, what’s your unique selling proposition? Well, in today’s marketplace, especially with the technology that we have, it’s become easier and easier to mass customize. And what I mean by that is that you can go to each buyer, find out what their needs are, and find out what their unique buying proposition is, which means, what is it going to take for them to buy from you today? As businesses are getting started again, I know we had a lot of businesses really cut back.

Those that survived had to cut back and had to cut back. And the way they did business, even their locations in many spots, is we re-engage. Are companies doing business, are they structuring themselves the same way that they did, say, in 2005, or are they doing things differently? One thing I’d like to point out, Scott, is, again, that it’s really important to have a strong focus for a company, especially during a growth period, whether they are a new unit of an existing company or a completely new company. So I think, from what we’ve seen, as the market started changing, you know, maybe in 2005, around that time period, a lot of the builders and developers we’ve worked with were trying to do everything possible to make the sale, which is a good thing in some ways, but in some ways that hurt them, because they were trying to be all things to all possible buyers.

With a focus and being able to say, no, we don’t do that, you can actually control your community, control your profits, and become more efficient at what you do, instead of having to research new things for every buyer that walks through the door. So are a lot of companies outsourcing now, and is that something that you’re recommending? We do. We recommend when you outsource that it’s good to leverage your partners. We’re not recommending outsourcing to people across the world who have no other contacts to any other part of your business. If you can create synergies within the companies that you work with, you might have someone at the design firm that creates your marketing materials that then ends up buying one of your homes. You might have someone from your construction team who has a mother-in-law who would love to buy two of your homes.

I guess what I’m hearing then is that we’re talking about companies structured more as a team than what we would typically think of as a corporate structure. And so you’re going out and you’re finding complementary skills. Without having to actually bring them in or hire or have them in-house, you’re creating strategic alliances. That’s right. Anything else that you would talk to builders about or developers or new startup companies in terms of what to do to help ensure their success in the reemerging market? One of the things that definitely can ensure success in the reemerging market is to make sure that you have the financial resources to accomplish what you’ve set out to accomplish. That’s why it’s important to have defined goals in the first place because then you know what financial resources it will take to accomplish those goals.

And if you don’t have the resources to achieve those things, then you scale down your goals until you have something that is financially achievable and then grow from there. So in today’s climate where business funding has been very restrictive, it’s getting maybe a little less restrictive, you’re saying stick with what you can do now with a goal to growth as you can? Yes, stick with what you can do now, but also stick with the things that your target market wants and focus on a few small things rather than trying to fit everyone’s needs. Mold your business around the needs of your target market rather than trying to fit your product to a target market. Now you bring up another point there that I need to ask about, and that is this.

How important is market research as we prepare to gear up our companies?

Of course, market research is extremely important. I’ve been talking with different research groups that we work with while we’re here at IBS, talking about the importance of knowing, do you want to offer plans with three bedrooms? What does that do to the pricing and the absorption rate? If you take that to four bedrooms, if you add a bathroom, if you make all of your floor plans ranch plans instead of two-story plans, that can greatly affect your profitability. The data is available to know what people have already bought. Rather than going out and creating focus groups, you can see how people have been voting with their wallets. Oh, that’s a good point. So I guess the question here is if I’m a young company or if I’m a new company and I look at research, immediately I’m thinking that’s going to be an expensive proposition.

Are there ways that we can find research documentation that’s already been done that we can look at, maybe some studies or surveys or polls that are available to us? Or are there inexpensive ways to do research to make sure that what we want to come to market with is exactly what the market wants?

Well, let me lead with another question and then I’ll get back to that. I just heard a great presentation tool from one of our clients. They have come up with the phrase to ask people when they first come in the door, how do you live? So it’s not, do you prefer two or three bedrooms? Do you prefer a red home or a blue home? It’s how do you live? And that opens the conversation to answer, well, we’re really focused around the kitchen or we spend a lot of time watching football together in the media room or we work at home so we need two offices that have all of the latest technology. That way you can find out, again, what the homeowner’s unique buying proposition is rather than trying to target the whole market at once.

Your other question was, what are some ways that you can find out what is going on in an overall broad market point of view? And actually, through the National Association of Home Builders, there are a lot of courses available. There’s a lot of data that are available from different marketplaces. And there are a lot of affiliates like us who have worked on a lot of projects and can help you come to answers a lot quicker than you can by starting the process and doing everything yourself. So that’s one of the things that North Star Synergies does then is to help with market research. And even if it’s on a limited budget, you can help put people in touch with the right resources and the right data to at least get a start and get a feel for their market.

Exactly. Okay. And if they want more, that’s what you do. Yes. Okay. Great. We appreciate this. It’s been a valuable conversation. And we’ve been speaking with Jason August with North Star Synergies. And Jason, once again, thank you for being our guest on Builder Radio. Thank you, Scott. It was fun.

That was Jason August of North Star Synergies. For more information, visit Jason’s website at NorthStarSynergies.com. And that’s our program for this week. For Jerry Rillo, I’m Scott Stroud. And thanks for listening to Builder Radio on the Selling More Homes Media Network. And thanks for listening to Builder Radio on the Selling More Homes Media Network.