Everyone involved in the housebuilding industry appreciates how much effort it takes to identify and secure development land. It can take years to put a land deal together, and that is just for starters. Proposed layouts, planning applications and build costing exercises require input from a host of individuals, often from a number of different departments, and often resulting in revision after revision before a successful planning application is achieved - occasionally for no return.
The investment, both in time and money, can be significant, and for those smaller housebuilders who have limited resources, can be all consuming.
Now, far be it from me to suggest that sales and marketing strategies and final sales prices are sometimes treated as an afterthought, or, worse still, a variable that can be tweaked to make a dodgy deal stack up, but last minute pricing requests are par for the course for hard-pressed sales directors. Even with a generous three-day deadline for completion, it can be hard to devote the time required for this mission-critical process, given the everyday pressures a typical sales and marketing department faces in a normal working week. Land introduced via agents often sees the agent pricing the units and handling the sales, but rarely involves the provision of a full marketing strategy weighted entirely in favour of the developer.
It is at this pivotal moment that the exciting new development, the one you’re investing your heart and soul into, can lose potential income, or, worse still, become an albatross around the neck of the business.
I’ve never understood why the vital part of the process that will dictate income stream and volume, has the least amount of time and resource invested in it. Major housebuilders utilise sophisticated systems to track sales rates, build costs, sales prices, £ psqft returns and individual house type profitability across their sites. Land deals are calculated based on this intelligence and tweaked on a plot by plot basis to arrive at an overall sales income. The most profitable house types are designed into new developments in order to maximise potential margin; however, unless the marketing process has been started at the point of land acquisition, there is little opportunity, other than a positive shift in the market, to further add value.
I have lost count of the number of developments that have been launched with a show home, but where little or no marketing activity has taken place prior to (and for those of you in any doubt – listing your new releases on property portals does not constitute marketing activity), consequently, the sales rate is deemed as ‘disappointing’. No shit, Sherlock.
Listing new homes is not marketing new homes. Simply listing does not add value over and above the resale market. Launching a new site without a robust, qualified and motivated database will cost you in terms of deals, incentives and post-launch marketing costs and then, when the target has been missed and the next land deal cannot be completed because the revenue is not available, the pressure is on and that’s when we tend to get the call.
Why not invest in identifying your target market audience at the point of land acquisition and start communicating with your likely buyers from day one? Establish where they live, what they love, their affordability and motivation, and start to build a relationship with each and every one of them. Build their trust in you and your brand, hold their hand and go with them on their new home journey. Use all the tools you have available to you to add value and then, when you launch, you will have less need to deal or offer incentives, and a much better chance of smashing your targets, rather than just achieving them.
The cost of getting it right at the start, is a fraction of the cost of putting it right at the end.
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