10/10/2008
By Nigel Hunter, Managing Director
The current financial climate is particularly turbulent for homebuilders, but deep brand insight and razor sharp market research can help to ride out the economic storm.
It’s not a particularly pleasant time to be involved in homebuilding. Many of us will remember the recession of 15 years ago, but today’s problems are harder to bear because they’ve been created by the global economy.
Changing Times
Eighteen months ago, no one in homebuilding had heard of the credit crunch. You would have been laughed at if you suggested someone taking out a quick and easy mortgage in Florida would contribute to the creation of economic uncertainty in the UK.
The rules governing the way our economy operates have been changed irrevocably and this means that homebuilders must reassess the way that they market and sell their properties. Location and price will remain the key drivers for purchasers, but today throwing in extras like carpets and curtains is no longer going to seal the deal. This has been particularly resonant since September this year, with the introduction of the Council of Mortgage Lenders Disclosure of Incentives Form, in which any sales incentives or discounts have to be thoroughly detailed, to ensure that a mortgage offer is given based on the true value of the property.
Act on insight
Enlightened homebuilders utilise research to ensure they provide potential homebuyers with properties and developments that will excite and inspire them. They know this because they base their product and development designs on deep market insight.
By acting upon these insights, developers can alter the DNA of their offer to ensure that it is attractive to the increasingly well-informed consumer. And that means, despite current market conditions, the potential new homebuyer is actively seeking out developers that offer much more than just a house to live in.
What's the big idea?
At fuse8, we have developed a proprietary methodology that allows our homebuilding clients to discover the insights that can help them unlock the potential of their existing and future developments. Called the Brand Insight Generation (BIG) process, this has been successfully deployed to deliver competitive advantage for clients. It also forces a profound appraisal of a homebuilder’s brand by asking homebuyers how they perceive it and what they believe its market proposition is.
The BIG process has helped determine the way buildings are designed, their layout, specification and pricing. It has also helped identify which incentives will actually work for first time buyers and downsizers – you may be interested to know that, in both cases, it’s not carpets and curtains.
This process of discovery will also determine the best way to communicate your compelling messages to your potential purchasers. By undertaking research you give your marketing communications the accuracy of a laser-guided missile. Put simply, the process minimises the risk and maximises your return on marketing investment.
When acted upon, brand insights and market research create genuine, tangible results that drive sales. In today’s market, it is essential for developers to evolve the way in which they approach the positioning and promotion of every development that they have. Those that embrace this methodology immediately will find they are best able to weather this current storm, and ideally placed to capitalise when the market finishes correcting itself.