Strategies and Tactics for a Competitive Market
A Special Program Designed for Builder 20 Clubs
- Start with a strong clear message and positioning statement that creates a difference in the minds of your customers
- Example: Walmart – We Sell for Less
- Understand the importance of the web. You will not succeed without a first class website, social media presence and ability to communicate with your customers electronically.
- Create superior point-of-sale materials. Demonstrate your excellence with a professional presentation of the product you’re selling.
- Your pricing must be market based, which dictates the need for accurate and current local market data.
- Customer centric pricing means ensuring that the buyers feel good about their biggest buying decision, a new home.
- Don’t price in a vacuum. You must be externally competitive and externally logical by understanding the fundamental pricing truisms.
- Learn the importance of “pricing variation” and “anchoring”
- Deny your competitors full or partial access to the following assets and you will be the preeminent game in town: the best locations, best products, best craftsmen (your subs) and best professional services.
- Protect your intellectual property with trademarks and copyrights.
- Understand why to avoid “open subdivisions”, and how to most effectively compete if you cannot.
Overhead Reduction Strategies
- Do you have the right mix of people and the right people in the mix?
- Conduct a comprehensive review of salaries, benefits and bonuses. However, don’t overlook the fact that money is low on the list of satisfiers. Create a better working environment to retain and attract key employees.
- Understand and attack even the “minor” overhead categories such as health insurance, telephones and auto expenses.
Product Cost Reduction Strategies
- These strategies are at the core of your homebuilding business and require your constant attention.
- Value engineer your plans and specifications.
- Institute better purchasing practices and systems with your subcontractors and suppliers. Learn from other builders.
Value Optimization Strategies
- Value is in the eyes of the beholder, your customer, not you. The customer’s optimum value system is a balance between functionality, price and emotion.
- Optimization requires difficult decisions and trade offs striving to increase utility, physical attributes, functionality and emotional attachment, while maintaining the desired price point.
- Learn the 10 Tactics of Value Creation.
- Understand how to calculate and use “flash value”