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Jack R. Shoptaw, Senior Brand Consultant at The Brand Consultancy, believes that home builders have an incredible marketing tool at their disposal that is hardly ever used to its full advantage. It isn't their brochure, logo or a promotional program -- it is a brand that is well researched, well communicated, and well positioned.

Brand strategy is a basic business tool, one that savvy business people take control of to gain a competitive advantage. Companies that don't manage their brands proactively, on the other hand, put themselves at risk and leave an open door for their competitors.

Shoptaw says that some home builders "reactively" use advertising and marketing to try to get the attention of target buyers. While this seems logical on the surface, it leaves out an all-too-important step that should be the foundation for all communications: brand strategy.

According to Shoptaw, there are five common mistakes that companies make:

• Mistake #1: "Advertising and branding are the same thing"

  For example, he says, "One of my clients had grown tremendously and had become the second largest builder in their market; however, they weren't making any money. Why? They were known as the "let's-make-a-deal" company, the price slasher in town. What they didn't realize was that this image had become their brand. So what they needed was total repositioning--but what they kept asking for was `better ads`."

  "One way we've dealt with this problem in the past is to take a roundabout approach by developing marketing collateral that talks about the company from a branding perspective. But it's far better -- and more proactive -- to develop a strategy first, then create marketing and advertising communications that are aligned with this strategy."

• Mistake #2: "I'll do brand strategy when everybody else does"

  By and large, builders go up through the ranks. Real-world experience and a measurable return on investment are what count. As a result, it can be difficult to understand the abstract need among consumers to work with a company that "represents something" beyond the obvious.

  Ten years ago a builder may have been able to say to a buyer, "You need a house. I am a builder; hand over the check." But these days, the picture is quite different. Whatever you offer, there are others who can do the same thing-and people know it. Therefore, the message has to be, "Anyone can build a box. We offer you ______." Whatever word goes into that blank, be it "stability," "independence," "partnership," or whatever you choose, is your brand. It's a concept, not a product, that makes you stand out from the pack.

  Shoptaw admits that It is hard to find a lot of builders who have fully engaged in a branding process currently but he says the tide is starting to turn. By 2003, he foresees a handful of national leaders in this space, with well-defined brands that define and own it.

• Mistake #3: "The economy is bad; I don't have the money"

  Shoptaw reports that although the Maryland/Virginia real estate market is still hot, much of the country, particularly California, is in a down spin. Builders may find it tempting to feel that they cannot afford to take a chance on advertising but the reality is that a failing business is a very clear sign of improper branding. He says, "A company that hasn't taken the time to be strategic, that hasn't gone through the process of thinking about who they are, what they want to achieve, and how they are communicating these messages to their market is inevitably going to face a crisis. And, although it's not ideal (or fun, honestly), to do a brand strategy when you're in a crisis, it's one case where you are definitely better off late than never."

• Mistake #4: "I know who my target customer is, so we don't need focus groups"

  Knowing where your customers are coming from is critical, according to Shoptaw. He contends that 90 percent of the time customers will tell you that "signs" are the reason they visited a new model home or a community and that is because it's the last thing they saw. They don't really remember if it was something they saw on the Internet and they then found the community that way or if they learned of the community through the Washington Post or the Houston Chronicle, etc.

  The bottom line is that no matter how good your intuition is or how good business has been, do market research to find out who will buy the kind of home you are building in the location you are building in.

• Mistake #5: "Employees are irrelevant to brand strategy"

  Employee retention is one of the major problems that builders face today, in Shoptaw's experience. When employees know what the builder stands for, they tell other people about it and become loyal brand messengers -- the most effective kind of salesperson. Builders who invest in their employees reflect a kind of long-term thinking that spills over into the rest of their operations. They become more responsible about how they pay for the land they buy, the communities they plan, and which prospective buyers are actually qualified. Ultimately, Wall Street will respects them for it.

The Brand Consultancy, based in Washington, DC, is a comprehensive brand assessment, strategy, communications and management services firm. With more than a decade of experience in the real estate industry, Mr. Jack Shoptaw develops, directs and implements custom brand management strategies for a range of clients, including a number of high-end, sophisticated production builders.

Pat Rioux

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