How Custom Builders Can Build Internet Sales

"I have to keep that a secret," says Matt Trask, director of business development for Sanford, Fla.-based Dave  Brewer Inc., adding that the firm puts a concentrated effort into positioning its Web site for search engine optimization (SEO). Whatever the team may be doing to keep its Web site rising to the top of Web directories like Google, Ask or Alta Vista, it works. However, other builders of custom homes may be wondering if rising to the top of the Web directory ranks is really worth the effort.

Marketing and sales strategies can differ between custom home builders and larger production-type home builders. Custom home builders simply don't build at the same pace or total volume. They generally rely on referrals and a strong presence and reputation in the communities they serve. The important common denominator, whether custom or production builder, is that they all compete in the same marketplace to build and sell homes.

"Of course, there are many custom builders whose primary marketing channel is word of mouth referrals," says Marie O'Brien, vice president of sales and marketing for Melbourne, Fla.-based Blue Tangerine Solutions, a technical services company that has been specializing since 1999 in Internet business development for the home building, as well as other industries. "For the custom builders, it is important to recognize that the Web is now the tool that people will go to first to check out a company," she says.

The evidence is undeniable: people are using the Internet for the home-buying process. Statistics abound.

According to a survey commissioned in 2006 by the NAHB's Institute of Residential Marketing (IRM) and Move.com, 27 percent of consumers responding to the survey visit builder Web sites when searching for new homes, and 26 percent use Internet listing services when looking for new homes. Consumers rated these Web resources, along with contacting Realtors, as "the most useful and important information sources in finding and evaluating new-home opportunities," according to the survey. Consumers looking for newly constructed homes are spending half their time online, according to the survey. In addition, 20 percent of online home buyers said if they could only recommend one source to a fellow home buyer, it would be Internet listing services, while 17 percent said they would recommend builder Web sites.

"There is an enormous opportunity and upside for builders to produce more effective and integrated online marketing programs, thus reaching a wider range of home buyers and providing them with a more satisfying home search experience," said the survey authors.

Builders that were included in this survey said that the highest quality leads they receive were generated through online resources. And even though builders acknowledged that many more quality leads come from the Web, they reported that they spend less than one-fifth of their marketing budgets on Internet-based marketing.

In yet another recent survey, the National Association of Realtors found that the use of the Internet to search for a home is rising rapidly, increasing from only 2 percent of buyers in 1995 to 77 percent in 2005. When asked where they first learned about the home purchased, 24 percent of buyers identified the Internet, which is up from only 2 percent in 1997.

"The Internet is a great venue to reach and influence potential home buyers while they are still in the research phase," says Cindy Krum, senior search engine optimization analyst at Denver-based Blue Moon Works, a firm that provides analysis, consulting and search engine marketing services to national and international companies.

"The size of a purchase has a direct impact on the amount of time a consumer will spend researching it; since the purchase of a home is frequently one of the biggest purchases any of us will make, and the Internet has become our primary research tool, it is important that companies in the housing industry have as much information available online as possible," says Krum.

Because custom builders often depend upon the quality of their product and strength of their reputation to procure customers and drive sales, Internet marketing specialists say a well-presented Web site that reflects these characteristics can be a critical component in the sales process.

"The Web site is a key piece of the puzzle you use to establish the trust that prospective buyers want to feel with you," says Blue Tangerine's O'Brien. "Just having a professional-looking site goes a long way to establishing that trust factor. If you claim to build beautiful homes with attention to detail but your own company image does not reflect that same care, subconsciously the prospective buyer is going to wonder about your attention to detail for their project." O'Brien says that at a minimum, custom home builders should use their Web site to achieve these four goals:

• Showcase work (marketing)
• Provide examples of how well they work with their clients
• Offer multiple ways for prospective home buyers to reach them
• Include company background information to demonstrate their expertise and why they can be trusted.

A testimonial page is a great way to earn home buyer trust. Buyers often believe the opinions of other buyers.

"It means a lot more when these attributes are being promoted by one of your former clients," says O'Brien.

For the Dave Brewer Web site (www.davebrewer.com), Trask says their main objective is to share as much information as possible with potential customers to get them to a level where they feel comfortable making initial contact. Even though builders typically may not be willing to include certain details like prices in a public forum such as the Internet, Trask maintains that sharing as much information as possible, including prices, online can significantly contribute to increasing the comfort level of prospective home buyers.

Trask says they have been pleased with the sales lead results that their Web site has been delivering. On average, he says, they receive six to 10 e-mail inquiries per week that are generated directly from the site, with about one in every 50 resulting in a solid sale. While they have yet to have anyone purchase a home 100 percent over the Internet, he says "that's our goal."

Selling a home purely over the Internet isn't necessarily a lofty or unachievable goal. Home sales that have been signed, sealed and delivered over the Internet have happened. An article in USA Today in February chronicled a couple who were relocating from Scottsdale, Ariz., to Tulsa, Okla., where they ended up purchasing a $410,000 home without ever setting foot through the door until after the closing. A virtual tour of the home on a Web site was all they needed to make their final decision.

However, due to the nature of a custom home — something that is one-of-a-kind and often conceptualized and created to the exact specifications and needs of the individual customer — it may be more difficult for home sales directly over the Internet to occur with custom home builders, unless the custom builder has speculative or model homes in their portfolio ready to go.

Although a direct sale over the Internet may be a less practical reality for the custom builder, sales leads coming in from their Web site or other third-party referral site are more than likely to be a sure thing to occur. The important factor is how the builder reacts to leads generated from the Internet.

The sophisticated lead tracking system for the Simmons Homes Web site automatically generates responses to e-mail inquiries.

Lyon says that between the Simmons Homes Web site (www.simmonshomes.com) and other third-party referral sites like Move.com and NewHomeSources.com, they receive a substantial amount of  leads per month. Contracts resulting from their online sales program represent a very respectible portion of their total annual volume. Lyon says that the number one objective of their Web site is to convert visitors into active leads.

"Of our appointments that we set up with an Internet lead, 33 percent of them will write a contract," Lyon says. "These shoppers are well qualified and highly informed, and our sales executives know that. It makes the entire sales process much easier."

Simmons Homes uses Internet marketing firm Customer Velocity to assist them with their online efforts. Customer Velocity's sales lead management tool, known as Lead Velocity, recently won the 2007 Innovative Housing Technology Award for "Best Sales and Marketing Automation." The product was recognized for its ease of use, its ability to manage a large library of builder documents, and its capacity to help builders turn leads into sales.

"As an online sales counselor, I could not survive without Lead Velocity," says Lyon. "Customer conversion is based on a timely response and persuasive follow-up." Lyon says that they have had multiple customers purchase a home without ever setting foot on the site. "Many relocation buyers find us online, request pictures and complete the process completely by e-mail and phone," he says.

One of the keys to the success of the Simmons Homes Web site is having a dedicated online sales counselor. "Home shoppers see that we have someone available to answer questions on any community and respond quickly. It's a service they value," he says.

Online sales counselors are popping up on many home builder Web sites. A few examples include Carmel, Ind.-based Estridge Homes (www.estridge.com), Tampa, Fla.-based Smith Family Homes (www.smithfamilyhomes.com), and Atlanta-Ga.-based Bowen Family Homes (www.bowenfamilyhomes.com).

Custom builders who may not have the resources for a dedicated online sales counselor always have the option to include an autoresponder tool on their Web site, where Web leads can be contacted at preset intervals with controlled e-mail messages.

"I don't believe a custom home builder needs a large-scale lead management system since their target audience is small and their monthly sales leads will reflect that," says O'Brien. "They may benefit from something as simple as a spreadsheet that saves the leads with additional information to track the lead source, the date, the person's contact information and follow-up method," she says, adding that the important component is follow-up.

A dedicated customer service section allows builders to offer customized access to such features as construction progress photos.

A Tool for Customer Satisfaction

The importance of follow-up and the ability to utilize Internet tools for follow-up activities extends beyond sales leads. Home builders are also starting to provide features and tools designed to extend relationships far beyond the closing table.

Once the contract is signed and construction is underway, some builders are starting to use their Web sites as a communication tool by providing password-protected sections where customers can view construction progress photos of their home and access relevant documents and warranty information.

For example, housing giant KB Home recently launched a Web site dedicated to its customers, called kbhomeowner.com. And in what can probably be considered a savvy marketing move, they have made access to the site available to any homeowner, whether they are KB Home homeowners or not. The site includes features such as seasonal checklists and helpful tips for practical activities like organizing closets. There is also a password-protected area where homeowners can create a virtual filing cabinet where important homeowner documents, home photos and home maintenance information can be saved.

"Our relationship with our customers doesn't just end when they get the keys to their new home," says Larry Gelfond, senior director of e-marketing at KB Home in a release announcing the new Web site. "KBHomeowner.com is another tool we offer homeowners to help them settle into their home, preserve its quality and enjoy the comforts of owning it."

It's yet another idea that custom builders can take and weave into their own Web site. Indeed, the Internet is a level playing field where the same opportunities exist for everyone, be they giant production or modest custom home builder.