CHALLENGE


How can you sell something that doesn't exist yet? Most new home developers build a sample home on the planned community so consumers can tour something tangible before making a $100,000-$500,000 decision.

Up until three years ago, that's exactly what Florida-based Transeastern Homes did as well.

But the company's principals began to wonder if they could steal ideas from the vacation home industry to presell entire developments even before they were built. So, they convinced resort marketing expert Joel Lazar to move down from Vancouver to conduct an experimental Priority Launch Program selling out all homes before a single day of construction in a new development.

"It had never been done in the new home industry before," Lazar notes. "The buzz was it would never work. People want to touch and see a new home before they buy it."

CAMPAIGN


The executive team decided to limit Priority Launch Program marketing expenditures to less than 3% of a planned development's estimated revenues.

"If you had to do sales and marketing costs at 10%, it would be too much [if the launch failed]," says Lazar. "If I've got a $750 million community, I dedicate one million to the Priority Launch. If there's no response, it's not too catastrophic in the long term because we already conducted expert feasibility research studies in that marketplace." So, all the homes should sell ... eventually.

Lazar and his team created a seven-step process for the campaigns.

Step #1: Brand logo

"In a lot of these markets, Transeastern hadn't been a household name. We hadn't done aggressive corporate branding. So the community brand would be primary," notes Lazar.

Each community was branded with a unique name, chosen to resonate with the target marketplace, such as "Victoria Preserve" or "The Hammocks." Then the design department mocked up five 10-sample logos for Lazar's marketing team to choose from.

Ultimately the chosen logos often look quite dissimilar from one another. The goal is to entice the marketplace to that particular location, not express corporate branding. (Link below to samples of logos.)

Step #2: Development microsite

The Web department created in-house templates in order to kick out new eight-page microsites on a dime. Each microsite was specific to the community it promoted, including a unique URL such as VictoriaLandings.com.

The microsites were sub-branded Transeastern Homes by placing the company logo in the upper right corner (far less viewed than the upper left corner where the community logo appeared).

The sites included basic homebuyer info including an FAQ on how the Priority Event Selection process works, a "helicopter tour" of the undeveloped land (a series of photos taken from above), an artist's rendition of the site plan, and PDF blueprint-style model plan drawings.

However, there were no actual home photos because none had been built yet, and there was no pricing so folks had to contact Transeastern to learn more. Calls to action and multiple contact methods were scattered liberally all over the site, including:

o A priority event selection countdown clock on the home page ticking off the days, hours, minutes, and seconds until the event would begin.

o Contact us info clearly above the fold on every page, including toll-free phone, email, and street address.

o Livechat offer on the home page with the photo of a friendly operator wearing a headset who was standing by.

o An online "request info" form to generate leads that prequalified prospects by asking a series of basic homebuyer questions.

o A downloadable online version of the Priority Position Contract (when available) so prospects could review the legalese and even purchase their refundable position for the event online.

Prices ranged from $500-$2,500, depending on the event. The ticket was much like a number ticket for lines at the baker or butcher. You were buying the refundable right to stand in line to pick your house on the day of the event itself. The earlier you got your ticket, the more choice you'd have for home location in the development.

By buying the ticket you contractually said that not only were you ready and willing to buy one of the homes on that day, but you were also able to have a mortgage lined up by then.

Step #3: Outdoor signage

As soon as the Web site went up, so did signage at the location itself. "Outdoor signage is critical in the early process," notes Lazar.

If it was predicted to be an extremely popular development, Transeastern might place a sales rep out on location for the purposes of greeting people. However, this wasn't normal practice (unlike most every other development on the planet).

Step #4: Marketing blitzkrieg

Before any advertising started, Lazar's team contacted their database of past prospects for other development projects in the region to see if these consumers were interested. Lazar felt it was important to let these most likely to convert prospects know about the offering first so they'd feel special and part of the family.

Then the team let loose a veritable blitzkrieg of marketing efforts that might include paid search ads, local billboards, public relations newspaper ads, radio, and even TV. Lazar explains, "You want to dominate the market for that type of product for the period. Response ramps up early in the process and peaks out maybe 30 days to two weeks before the event, even starting to come down just before we execute the event itself."

The team managed and tracked all efforts through one marketing operations software package so they could compare and contrast costs and results. Lazar gets a daily leads-generated report and makes media spend adjustments based on it. "I see the flow and I match to flow."

Step #5: Continual prospect follow-up

The goal of all these marketing campaigns was to generate hundreds, even thousands of leads for the sales team to follow up on. Each incoming lead was immediately added to the main database, no matter what media it came through (phone, email, Web form, live chat, walk-in, etc.).

Next the sales team stepped in, nurturing, educating, and relentlessly following up with every single lead until it converted or not. Leads were contacted, generally weekly, via the medium they'd first contacted the company in. So a lead who emailed their info in would receive mostly email in return. A lead who called in would get phone calls. Lazar says it's important to talk to prospects via their preferred mode of communication.

Step #6: The event itself

"It's not a sales event," says Lazar. "They have to have been sold and made a buying decision before they ever arrive at the event." The event itself becomes a combination of legal formality and celebration.

The event was usually held in a nearby hotel ballroom or conference facility, with complimentary snacks for prospects waiting in line to pick their home. Each prospect had 30 minutes to choose their home and sign the final paperwork for it.

If they didn't select a home at the event, they were warned the prices would be going up. Also they'd not get choicer locations, or perhaps no home in the development at all. Plus the contract had a clause with financial disincentives if you sold your new home before three years were up. This meant few, if any, homes would come available in the near future.

Step #7: Start building homes

"We begin vertical construction in the new community as soon as possible after the event because people want to move in right away."

Here's the crazy part -- the entire seven-step process generally took place in three-to-six months. "My preference is a year," says Lazar, "but because we're growing so fast we don't have that luxury."



RESULTS


"When I was recruited in 2002, we were the 156th-largest home builder in the country. In 2004 we were 38th. I can't see any way we won't move up to the 20s this year," says Lazar proudly. This is an especially remarkable accomplishment given that the company only builds homes in a single state.

The team has launched 16 communities in the past two and a half years, and only one wasn't a success for pre-build sales. "The location was ahead of demand," explains Lazar.

"We're generating thousands of leads per week for all of our communities combined together. A typical community gets 100-200 leads per week. This isn't just people generally interested in real estate, these are qualified leads."

Roughly 50%-60% of leads come via phone, 30%-40% via email or Web form, and 10% or less are walk-ins. Lazar notes, the media doesn't dictate quality, "They convert about equally."

The Live Chat feature is "extremely popular" with site visitors, but Lazar says it's hard to get enough of a detailed dialog through it to qualify and gain a prospect. "We attempt to get converted to phone or email as soon as possible in the chat conversation. We only use the initial chat capability to pique curiosity."

How can you launch execute 16 of these launches in under three years? Lazar admits, "It's not for the faint of heart. It took me a while to get the corporate culture educated and my staff built. We went through a lot of people at first. My marketing coordinator now is a ten on a scale of one to ten."

The staff that didn't work out were mainly those from traditional real estate selling jobs. They couldn't hack the heavy incoming lead flow and often stank at email communications.

Email is now so critical to the process that Lazar doesn't accept sales job applications via any medium except for email. "They can't view email as a necessary evil. They have to embrace it and love working with email. A lot of people screen themselves out."

Step two is the first job interview in person, but that's only 15 minutes tops. "We go through large numbers of applicants. We rapid fire them questions in the interview process, putting them in a highly pressurized environment to see how they respond."

Then, "The ones who survive that take more intensive interviews and personality and skills assessment tests."

As Lazar said, it's not for the faint of heart.

Useful links related to this article:

Creative samples including screenshots of various Transeastern sites: http://www.marketingsherpa.com/trans/study.html

MarketingPilot: the campaign management software Transeastern's marketing operations team uses to track and manage costs and results of all offline and online campaigns: http://www.marketingpilot.com/

Transeastern Homes: http://www.transeasternhomes.com/