By Lianne McOuat
McOuat Partnership
Our agency currently represents 35 active new home sites, 25 about to open sites and another 35 in the pipeline, which will open later this year or early next year. Being a part of so many teams, something we hear every day is, “Should we open, or should we wait?”
Many of our “about to open” sites have had a sign up for a few months and some have been building up their registrant list for a number of years. We have one “coming soon” site with a database of over 9,000, but yet, as a team, we are hesitant to open the sales office in these current market conditions.
Even when we have a confidence level that our list is great, we still wonder: what is the right price to ask in order to make sales in today’s market?
One strategy many of our clients are employing right now is test marketing. What we are trying to do is gauge the market sensitivity and use this data to inform our next steps. Test marketing can be done in many ways, but the key is that the wider market should not know that you are test marketing. This should be done behind the scenes and without a large splash so as to not affect your overall program. Here are some ways to test the market:
One-on-one personal appointments with your prospects: You don’t need a full marketing package, complete features list or even a sales office. All you need is a healthy database and a dedicated sales team willing to spend their time presenting the opportunity to prospects and getting their honest feedback.
Focus groups: Use your existing database or advertising on social media to recruit a group with similar demographics of your target market, bring in groups of 10 to 15 buyers, showcase your site plan and home/suite designs, ask about features and finishes, building amenities desired and test the price sensitivity using both qualitative and quantitative research methods. Ideally you use a third-party research firm, as you do not want prospects to feel they are being “sold” to.
Online surveys: Survey programs are inexpensive and can be totally interactive and interesting for your prospects to participate in. Consider sending a survey to your database offering a taste of your project. Most importantly, be sure to ask the right questions to get true insightful answers, not just support company preconceptions.
The major benefit of test marketing is that it allows you to move forward with your project with a better degree of confidence, rather than risking failure or standing still. Perhaps you have designed your project for a 2016 market and need to take a step back, red line your plan for another product or go back to the drawing board. Perhaps you need to wait it out until market conditions return to normal. Or perhaps what we have all seen as normal was actually not a sustainable model and we need to take a deep breath and adjust our expectations for pricing and sales absorptions.
Today’s market calls for new strategies, and doing what we have done in the past may not convert to sales the way it did in the past. Now is the time to dig deep into our experience and push ourselves as an industry to ensure we are offering the right product, at the right price and at the right time.
Lianne McOuat is the vice president, strategy at McOuat Partnership. http://www.mcouatpartnership.com/