As any U.S. builder knows, housing is a competitive business. But imagine for a moment if it wasn’t.
Think about Google. Google is a monopoly because it has no real competition. No other search engines—not even those from Microsoft or Yahoo—can come close to its level of popularity. PayPal cofounder Peter Thiel told Business Insider magazine that Google is a monopoly because it’s “a kind of company that’s so good at what it does that no other firm can offer a close substitute,” a company that’s “10x” better at what it does than anybody else.
Google has no competition and thus does not compete with any other companies and needs no advertising or salespeople for its distribution. Sounds nice, right?
Now, back to reality. In an uber-competitive marketplace like home building, other builders are constantly breathing down your neck. Of course, ideas like sales processes, advertising, and model homes are important but in our industry price is king. A competitive building company must sell its homes at a market price and–like it or not– you don’t get to decide the price.
Price should be determined by comparable values, which can be accessed through MLS. The market dictates the price, and to disregard the market with prices that are higher than what the market will bear, you will swim upstream into futility.
One more thing: Because housing is so competitive, successful companies must differentiate themselves from the crowd in order to make the sale. And it takes more than just building a “quality” house to differentiate.
As you already know, the home building industry is not like Google. It is market driven, so pick your market carefully and have a solid strategy in place to stand out from the competition. In my next blog I’ll address the four pillars of successful sales and marketing.
Myers Barnes is America’s favorite new home sales trainer, author, speaker and consultant. For more information, please visit www.myersbarnes.com.