In our discussion about leaking profits we’ve already examined why you are in business, and the four ways to increase your profits. Now we must examine the leaks one by one to understand where we may be losing profits. The first leak we must look at is marketing.
Twentieth century retailing mogul John Wanamaker once claimed, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
Many business owners share this problem. Let’s see if we can pinpoint the wasted half.
Our constantly advancing technology has changed the way new homes are built and sold today. If you’re not technologically savvy, you’re sinking into the murky waters of your marketing profit leak.
Look back to 1922, when radio provided a new advertising platform for businesses to market their products and build meaningful customer relationships.
A little more than two decades later, television launched the next great marketing innovation.
Then it took 40 more years of slow but steady progress for the big boom in digital technology—the Internet and the World Wide Web. Since the advent of the online world, we’ve seen more and faster changes in technology than ever before. The iPhone, for example, revolutionized cell phones in 2007, and the iPad did the same for mobile computing in 2010. According to Pew Marketing Research, 56 percent of adults in the U.S. owned a smartphone in 2013 , a 10 percent increase from 2011; and 22 percent owned tablets (numbering more than 47.5 million), which was up from 11 percent the year before.
People are getting their news on mobile devices, putting a major crimp in print advertising that used to be so critical to a homebuilder’s marketing plan. For the first time ever, Americans now spend more time consuming digital media than watching television—an average of four hours and 40 minutes online versus four hours and 31 minutes watching television. And if you figure that they record their TV programs and fast-forward through the commercials, there goes your broadcast media value.
Oh, and radio? Sorry, but with satellite radio and mp3 players, traditional radio advertising is circling the drain.
Next, look at social media—please! I know it can be confounding to many business owners, but the reality is, it works. That is, when done correctly. Facebook, Twitter, and even YouTube, plus blogging, are essential tools for today’s homebuilder. Social media is keyed into building relationships, which is ideal for your customer-centric approach!
In our next part on marketing leaks we will look at the information sources that homebuyers use for their search.