I just buttoned up my contribution to our December issue, which has an exclusive focus on the
takeaways from last week's Big Builder '08 conference. My write-up was on the discussions that were had during the sales and marketing break out sessions. I wrote long--so many ideas to improved profitability were tossed about during those brainstorm sessions!--so I ended up cutting out chunks here and there so the piece would fit the amount of real estate available in the magazine.
But what I cut, I think, is worth sharing all the same because it highlights some innovative thinking that could, if developed quickly and creatively, help garner critical support for our industry.
During the workshops, about 40 or so sales and marketing professionals put their collective heads together to figure out how builders could improve profitability, either by generating more revenue or cutting costs, within their discipline. The group identified more than a dozen places, or "opportunity areas" as we called them, within the purview of sales and marketing where a number of initiatives could be taken to improve profitability for 2009.
This group of professionals saw an opportunity to move the needle on SG&A by reducing marketing and advertising expenditures. However, participants agreed that any reduction had to be strategic; remaining dollars in the budget had to be thoughtfully deployed to return the greatest number of serious rather than just curious prospects.
The consensus was print advertising was dead--it was deemed expensive and ultimately lukewarm in its effectiveness--which left the Web as the go-to source for fresh blood. However, there was uncertainty around how best to use the Internet to connect with younger buyers. They were aware of the growing importance of blogs, social networking sites such as Facebook and MySpace, and instant messaging technologies. However, not a soul in the room had any sure-fire ideas about how to use these interactive tools to drive builders' businesses.
Jim Adams, CEO of NewHomesDirectory.com, a searchable online source for for-sale new homes, was a session participant. I talked to him after the event to get his take on the new media discussion. "One of the reasons it was hard to go down the new media path is that it's so foreign," he said. But like it or not, Adams said, builders will have to adapt if they hope to hook into the next generation of buyers. "You can't hide behind the corporate shell," he said.
I asked if he knew of any builders who "got" it. He said that he knew of a few builders working on pilot programs--you can see an example from D.R. Horton's Tampa division here--but none that had totally cracked the code. "Corporate mentality is handcuffing the effort," he said.
All political persuasions aside, Adams said that if builders wanted to see a successful model all they had to do was take a look at Barrack Obama's presidential campaign.
Now, hold up... This is not where I go into a why-Obama-is-great diatribe. (For the record, I voted for John McCain.) However, I do think that home building can learn a good lesson from Obama's extremely successful use of the social media phenomenon.
Incidentally, for those of you who clock into MSNBC's Morning Joe program during a morning workout like I do, this same point was made on the program last Thursday when anchor Joe Scarborough had a bunch of pundits on air to talk about John McCain's campaign missteps. One of the final comments was about how McCain's campaign failed to connect with younger voters. To drive home the point, one of the show's guests held up a piece of direct mail from the McCain campaign. It was designed as a telegram. Yes, a telegram.
(I've been trying to find a clip of the segment but have been unsuccessful to date; if anyone has a link, please send it to me.)
Compare that with Obama's campaign's headquarters Web site. It boasts an ObamaBlog, Barack TV, a MyObama.com feature that allows visitors to connect with other Obama supporters in their local area, and a whole dashboard of networking sites where supporters can connect. The simple platform allowed the campaign to push news and information out while simultaneously bringing people together, creating an almost effortless social fever. In fact, the format was so successful that Obama has carried it over to the launch of Change.gov, a new virtual outlet for the office of the president-elect.
Now think about how much momentum this new-age-meets-grass-roots approach generated for Obama and think about what housing needs right now.
We need help. Correction. We need more help; the housing stimulus passed in July was a dud. But Congress says take a number. Relief will come only when housing's issues become bigger than just a builder problem. Given that reality, couldn't a new-media campaign be effective in advancing a movement like Fix Housing First?
The initiative, publicly announced at the Big Builder '08 show, aims to bring multiple industries together in the hopes of pushing Congress to do something to put a floor under falling home prices, which its advocates place squarely at the heart of the larger economy's problems.
Sounds good, but it's unclear whether it's getting much traction. The big builders are all in, but there doesn't appear as yet to be a clear line of support from influential groups within the industry--think CBIA or the NAR--much less outside the industry.
But I think Fix Housing First could gain good ground, if they could build a social platform where people--individuals, groups, companies, associations, governments, etc.--could connect on the issue. Working from the ground up rather than the top down may be the only way to move this agenda forward. But, it's clear, from the little slice of life at Big Builder '08, Fix Housing First organizers are going to have to tap talent outside their ranks to launch it.