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Spending Less on Advertising Can Mean More Profits

By Steve Hoffacker, MIRM

 When traffic is slow or when you are in a very competitive market, it might be tempting to think that you need to spend more money on advertising - maybe take out a larger ad in the newspaper or run more ads.
 
However, it's not always the builder with the biggest, boldest, or most expensive ad in the newspaper that attracts the attention of potential homebuyers. Rather it's the quality of the message and how it resonates with those who are looking for a new home.
 
Just as is often true with the home itself, it's not always how much the ad costs (per square inch) or how big it is but how well it meets the needs of those who notice it.
 
So is advertising unimportant? No, but you definitely want to be more selective in where you run your ads and how large they are ? and how you manage your money.

Newspaper Advertising Is Giving Way to the Internet

Newspaper advertising may not be the darling for you that it once was. Just because other builders seem to be trying to outdo or outspend one another or be more noticeable with larger, flashier newspaper ads, you don't have to go along. Again it's the message and not just the size or amount that matters.
 
Readership of newspapers is down, and people are using other resources for locating new and resale homes to evaluate, most noticeably the internet. Having a web presence is no longer a nicety, it is required to be a player. If your potential customers can't find you on the internet, they may not ever know about you or what you are offering.
 
But utilize a little restraint here as well. Just because the internet is virtually limitless in what you can put on it, your customers' attention spans aren't.
 
Make your message succinct. Keep it simple. Save some of your information - in fact, the most important part of your sales presentation - until your customers actually visit you.
 
Your website, and the search engines that drive people to your website, should provide enough information so that people will want to know more about you and contact you or get in their car and drive to visit you.
 
So the adage, "less is more" applies equally well to your website as it does to the amount and frequency of your print advertising.

Direct Mail Is Not a Good Alternative

Speaking of print advertising, many people think that direct mail is an effective traffic generating tool. However, direct mail can be very expensive with very little to show for it.
 
In the first place, direct mail is similar to newspaper advertising in that there is no way to gauge the interest level of the people to whom you are sending your postcard, flyer or brochure. You might reach several interested people or hardly anyone.

 Sure, you can address your mailings to people and neighborhoods that you feel might have an interest in what you are building, but many of those people will discard your mailing as junk mail or toss it because they have no interest in a new home. Also, be prepared to do several mailings to the same people to increase your limited chances of having something to show for your efforts.

Back to Good Old-Fashioned Prospecting

Looking for even more ways to market your property and drive more customers to your location? Take matters into your own hands.
 
You need to supplement any newspaper advertising or website presence that you have with good old-fashioned prospecting. Talk to people everywhere you go - places where you trade frequently, the gas station, the home improvements store, the hair salon, the bakery, the grocery store, restaurants, the mall, the ballpark, and professional offices. Some of the people that you'll meet or talk to will have a need for a new home themselves. Others can point you in the right direction to someone they know.
 
So before you go out and buy more ad space or run larger ads or run them more frequently, consider some of the alternatives that may be considerably more effective and save you money at the same time.
 
And we didn't even talk about the most effective form of marketing that costs you absolutely nothing - referrals and word-of-mouth advertising from people who were impressed enough with what you offer to share your message or tell you about people they think might be interested.

Steve Hoffacker, MIRM,  a home builder sales and marketing consultant, has been focusing on strategies and solutions for builders and salespeople for more than 25 years. For more information,
 e-mail Hoffacker, visit the Hoffacker Associates Web site, or call him at 561-685-5555.