Are you currently debating the importance of marketing for home builders? Does the industry outlook have you considering a cutback on advertising? Before you do anything, know that marketing should be a constant no matter the home-building industry outlook. As Henry Ford wisely compared, "Stopping advertising to save money is like stopping your watch to save time."
With consistent marketing, you're still top of mind with a solid marketing strategy, even when things are challenging. Take, for instance, Citibank. According to HubSpot, Citibank is the only bank that experienced growth after the 2008 recession because the company actively worked on its branding and marketing while others in the industry cut back. The same lesson can be learned in the home building industry.
Here's why marketing for the home building industry is essential, not only because of the current outlook but always
The Home Building Industry Outlook
If you're not yet familiar with what many experts are predicting for the future of home building, here's what you need to know:
Challenges
DAT highlights the following challenges for home builders:
- A combination of higher rates and soaring home prices are deterring homebuyers
- Wood product demand
- Rising cycle times
- Affordability concerns
Demands
Although the demand for home building services has slowed compared to the past two years, recent reports suggest that construction industries will need approximately 650,000 more workers than usual to meet the demands of consumers in the coming year.
Real estate predictions
Fannie Mae reports a change from the initial forecast of a 15.6% drop in total home sales by the end of 2022 to 16.2%. Fannie Mae's Senior Vice President and Chief Economist, Doug Duncan, explains the circumstances further by adding, "Housing remains clearly on the downtrend – and has been for several months now – due to the combined effects of outsized home price increases and the significant and rapid run-up in mortgage rates."
Pandemic effects
Due to the aftermath of the pandemic, the home building industry experienced, and is still experiencing, the following effects:
- Inflation. The cost of building a single-family home spiked by 42% in 2021, costing companies and customers thousands more than just the year before.
- Labor shortages. According to the HBI Construction Labor Market Report, more than half (55%) of single-family builders say they are experiencing 'some' kind of labor shortage or 'serious' shortages.
- Supply chain issues and delays in obtaining materials. The pandemic, war in Ukraine, and increased tariffs have all affected the supply of construction materials.
Outlook
According to IBISWorld, despite the growth experienced over the last five years, the home builders industry in the U.S. Market declined by 4.6% in 2022. The next five years aren't looking much brighter, as another complete industry analysis reports a continued decline. The news isn't all bad, however. DAT added in their report that the outlook is 'generally positive' as the demand for housing is still there. In fact, they note a shift towards constructing more multifamily homes now that rent prices have skyrocketed.
Why Marketing is So Important to Home Builders
Despite good and bad news regarding the future of home builders, marketing remains an essential component of your business. Without it, your home-building business doesn't have a way to communicate new offers or deals to current customers and its existence to the rest of the market. After all, consumers can’t utilize the great home-building products/services your company offers if they don't know about them.
Here are more reasons why marketing is so vital for your company.
Strengthen Your Brand
Demand for home building may still be good, but it is easing up in the market as interest and mortgage rates stay high. Strengthening your brand with marketing can help in several ways: it boosts brand recall and recognition, improves consistency, builds trust and credibility, and inspires customer loyalty and repeat purchases.
Boost Sales and Brand Awareness
Marketing gets your brand out there and highlights what differentiates you from the competition. This is important because the home building industry is saturated with companies with similar products/services as your own. By setting yourself apart, you make your brand more memorable among consumers, boosting sales. Reports have found that marketing accounts for 10-35% of a brand's equity.
Remain Relevant in the Longterm
Although marketing has many short-term gains for your home building company, thinking in the long term will allow your company to remain relevant in today's market. Long-term thinking creates a vision for your company's future, allowing every team member to work towards a common business goal your marketing team can help achieve.
Marketing Essentials for Home Builders
To help you make the most of your marketing, here are our top marketing ideas for home builders:
- Know your audience, so your marketing speaks to them directly and evokes an emotional response
- Buyer personas are crucial, but you should avoid having too many. Having about 3-8 to start is recommended, with room to add on as your company scales.
- Consistency is key. Most (69%) customers prefer to shop with brands offering consistent experiences in-store and online.
- Leverage multiple marketing channels. On average, today's consumers interact and communicate with brands on 20+ channels.
Take advantage of a mix of digital solutions that drive results in home-building marketing:
Better yet, execute top digital solutions with a reliable partner like McClatchy, who has full-service marketing strategies and leading experts on how to best leverage them in your home-building advertising.
