Author Archives: Paul Salmonson

Fly Fishing & Selling Homes

Plans

First There’s Strategy -

When you first think about building a new community, what are some of the thoughts that come to mind? Customer? Area? Product? When an angler begins a trip to his or her favorite fishing destination, they need to think along the same lines of strategy. In fact these are some of the key areas of concern before they even drop that first line into the water:

  • Type of fish
  • Geographic Area
  • Time of Year
  • Rig Presentation

Isn’t this similar to what an executive team thinks about too when planning a new community? Who’s going to be my customer? What area? Type of product offering?

Fly Fishing

Choosing The Flies – Product Selection

When choosing trout flies, the relative importance of fly characteristics in your selection, in order, should be: size, shape, color, and action (for stripped flies). In saltwater, action is often more important than exact size and shape. Don’t you need to make sure that your home offering selections are enticing to the target demographic too? If technology is a key feature for a Gen X buyer, then one must make sure that there’s key technological features available in the community.

Fly Fishing Cast

Presentation – Creating The Right Sales Environment

Trust me on this one, you can be casting into a certain section of water and not even get one bite if you don’t have the right presentation. Two thirds of the time, trout are biting on submersible midges and nymphs. The other times, they are striking a dry fly on the surface that represents an insect that’s hatching that time of year.

If you don’t have the right type of web site presentation using up to date technology such as Interactive Floor Plans, then chances are the prospect will pass you on for better presentations. Not only is presentation important, but a builder will need engaging content to attract potential home owners. (see 2012 Home Buyer Conversion Report)

Interactive Floor Plans

These are but a few direct correlations of fly fishing and selling homes. I trust that we can all learn new ways to go to market by observing other endeavors of life…………………

Happy Fishing!!!

Interactive Floor Plans

“Big Data” Shifts Business Trends

The New Information Age

We are just beginning to wrap our heads around the vast amounts of information available to us in this new information age. With computer processor speed doubling every 18 months along with increasing storage capacity, we can afford the means to assess data in its entirety. This phenomena is known as “Big Data” which refers to our new found ability to crunch a vast quantity of information, analyze it instantly, and draw some astonishing conclusions.

Collecting information is just the beginning of creating the ability of artificial intelligence as we saw way back in Stanley Kubrick’s 2001 Space Odyssey
 

HAL 9000 (a computer) decides what’s best…………….

Gone Are The Days Of Traditional Statistical Analysis

In the old days, statisticians would have a hypothesis and test it with a random sample of a population. The greater the size sample of the population being measured, the more accuracy of the sample being a representation of the entire populace. This would reinforce the notion of “causality”, that being, we as humans have a yearning desire to try to understand the world around us. What causes things to happen? For example, say we have a theory that someone buys a home because they eat eggs in the morning. ¬†As you can imagine, there’s a fair amount of people who get up in the morning, fix themselves some eggs for breakfast and go off into their day. And, of people who purchase homes, it can be said that there may be a high degree that they also had eggs for breakfast. Thus, eating eggs causes home sales? So, is it realistic to prove this¬†preposterous¬†hypothesis¬†with a statistical analysis? However, if one was to gather a random sample of new homeowners, there would be proof that would suggest that egg consumption yields new home buying behavior. This type analysis is known as causality as opposed to correlation and takes the form of trying to understand a phenomena, coming up with a hypothesis, and proving it through statistic analysis.

Causality vs. Correlation Analysis

Statistical Analysis vs Causality

Some things are best left to try not to understand

 

 

 

 

 

 

 

 

 

 

 

Within a correlation model of understanding, we are able to assess just pure raw data and observe correlations without trying to understand the cause of an event. What this enables businesses to do, is to view highly correlated events and capitalize from their relatedness. In other words, if a given situation yields outcomes with a high degree of correlation, then why bother trying to understand why?

In the book, Big Data РA Revolution That Will Transform How We Live, Work, and Think the author explains how retailers are just beginning to understand their abilities to assess data for what its worth and understand the correlations of relationships. An illustration of this is how Walmart now sells Pop Tarts during times that precede a natural disaster. They observed that during times where people are preparing for hurricanes and/or a natural disaster, that not only did typical disaster items such as batteries, flash lights, and water sales spike but so did Pop Tarts sales. They then began to merchandise disaster related items and Pop Tarts in stores in order to make it easier for their customers to shop. Now who would have hypothesized that Pop Tarts would be a necessary item for preparing for a Tornado or Hurricane? In hind sight, it maybe easy to explain because of the product ease of use for their customers. However, if one removes the urge to try to understand what causes certain correlated events and just accepts the raw data and that these correlations exist, then a new era of marketing has begun using this strategy.

However, there are many ways to view the world, and one must be cautious as they develop ways to assess given circumstances of events. “Big Data” as some may have us to believe is not the cure all, but can be used in significant ways to observe the patterns of our society. This can be another great tool in ones tool box to be able to predict market trends, product sales, and any other activities if the right data is obtainable and accurate.(Read More – Big Data News Roundup: Correlation vs. Causation)

New HTML5 Interactive Floor Plans

We are very pleased to be getting the notoriety of our new HTML5 Interactive Floor plans! As we approach the International Builders’ Show this month, it’s nice to be able to have articles such the one written by ConstrucTECH (click on picture below for full article):

HTML5 Interactive Floor Plan Article

Start The Dialogue With Future Customers

Engaging At A Prospective Level – Creating Dialogue

Dialogue marketing is a term that has emerged in recent years to describe companies’ efforts to engage willing consumers in an ongoing dialogue to create lasting relationships. For example, based on data, marketers target groups of consumers who exhibit a propensity to buy and invite them to connect with the company in a variety of ways. The engagement process provides value to both the consumer and the company. Marketers use these opportunities as automated data collection points. The companies use the data to further customize their marketing messages and personalize the experience for their consumers and market segments. In exchange for sharing opinions, buying patterns, product preferences, etc., consumers receive perks such as discounts, tips, and free trials as well as appropriate and valuable messaging from the company.

History of Dialogue Marketing

Dialogue marketing can track its roots to permission marketing and relationship marketing, and is similar to engagement marketing and double-loop marketing. A direct reaction to traditional push marketing, the goal of dialogue marketing is to develop ongoing and long-lasting relationships with the right consumers.

Dialogue marketing is based on the premise that engaging consumers in relevant and personal conversations is more important than ever. As technology arms consumers with new ways to ignore messaging, disconnect from branding and disengage from the marketplace altogether; marketers believe that connecting on a personal level with consumers who do or will buy because the company resonates with them helps companies differentiate themselves and stand out as leaders in the marketplace.

Gone Are The Days Of Push Marketing

Online Engagement

When one can provide content online that is of value to a prospective client, they tend to be more inclined to be willing to exchange more information about themselves and their interests. Now more than ever, we have to differentiate ourselves from the sea of information that is online. For example, in order to capture any interest at all, a website must be able to convey the message of a company’s product or services with in six seconds of viewing. On top of that, there needs to be interactive triggers that will engage the viewer. This can as simple as more detailed product information as a link, or as complex as using an interactive floor planning tool.

Interactive Space Planner

Click On Image To Go To Space Planner

We have witnessed but a vast many changes in the way we go to market, from the push marketing styles of the 1950′s to one of engagement through the use of many forms of today’s media. The key to reaching today’s consumer is to first have a product that is right for the targeted demographics. However, this is only the first step of a well thought out market strategy. Part of any successful marketing plan is to be able to have an engaging process that begins the critical first steps of building the initial relationship. This means a marketing plan that has key ingredients which will provide value-based online content to begin the all important beginning steps of the customer relationship – the dialogue.

Hybrid Marketing For Home Builders

Combine Traditional Media with an Interactive Digital Experience

Today we’re seeing a combination of forces merging into a singular platform that allows for a prospective homeowner to be more informed, engaged, and excited about their new home ¬†even before they set foot in the community. With the varied tools available online from social media to interactive floor plans, one can easily get a fairly good grasp of a the type of home they are interested in purchasing. What can trigger this interest is the use of traditional media formats such as T.V., Radio, Print, and Outdoor. However traditional campaigns can be tricky in measuring the return on investment.

With a Hybrid Marketing approach, greater emphasis is placed on the reliance of a prospect seeking key informational components of the buying process. These components can be related to the geographical area, community, plat map, floor plans, and other critical areas to be considered when making a home purchase decision. One of these areas would be the actual floor plan selection and the associative options with that plan. Interactive Floor Plans (IFP) is a perfect way to engage a prospective homeowner online to make various option selections at their leisure.  In making these selections, the prospective client can save their favorite floor plans to their e-mail address which in turn begins the Hybrid Marketing Cycle from a Pull Marketing style approach.

As the saved floor plan is sent to the prospect’s email address, a copy of the saved floor plan is sent to the builder for future reference. Not only does this allow for a better prepared sales agent, but a builder can begin to assess through¬†analytics¬†which types of floor plans and options are right for a given community. With this data, a builder can optimize the right floor plan / option mix in a community and cut costly plan maintenance for under performing floor plans.

Customer Discovery Center – The Meeting of Two Worlds (Digital / Print)

Here’s where the magic takes place! Instead of being handed a registration card as way to gain access into the model park, and agent is already prepared with the floor plans that a prospect has saved. If this is not the case, then an agent can walk the future homeowner through the Customer Discover Center. This is a large format presentation (1080p) on a wide screen of the community, site plan, interactive floor plans, key builder information, and more.

 

The prospect will be given the opportunity to view various floor plans and options. Upon various selections, the agent will then be able to print a customized eBrochure for the client to place into the Hybrid Kit. Of course, before the customized floor plan is printed, the agent asks if the prospetive homeowner would like to have the floor plan saved to their email address. In which case, an eLead has been entered into the sales agent’s system. This same saved floor plan can be forwarded by the prospective homeowner to family and friends which in turn can create referral sales.

With the Customer Discovery Center, Interactive Floor Plans, and Print On Demand, home builders can provide a very engaging platform for prospective home owners that allow for them to control the buying process. Gone are the days of push marketing that relies on factoring a small percentage of success of a massive expensive ad campaign. Now we can rely on solid data of our target market, and focus our valuable marketing resource dollars upon those who are truly interested in purchasing our products.

Bounty Towels & Building Homes

What can we learn from the retail industry and apply to building homes?

What’s in a bar code?

We may not wonder any more why bar codes are on packaging as we shop at a store, but in reality this way of information tracking is relatively new. ¬†In June of 1974, the first U.P.C. scanner was installed at a Marsh’s supermarket in Troy, Ohio. The first product to have a bar code included was a packet of Wrigley’s gum.

The process is relatively simple, in that an optical reader device scans an item and the associative data is then pass onto the logistical parties in order to keep the store shelves filled. However, having proper formatting of data and agreed upon industry standards took some 20+ years. What retailers soon discovered, is that the more integrated their supply chains were with information, the less errors were experienced, quicker fulfillment times of orders occurred, and less man-hours incurred per dollar of revenue was achieved. In other words, they developed a very highly efficient supply chain model with a single pull-through triggering mechanism, that being the bar code.

 

Single Trigger Event Pull-Through Model for Retailers

Consolidation of Retailers In The 1980′s

As we entered the second decade of bar code scanning and single trigger envent tracking, Walmart had revenues of 1 billion, and 276 outlets in 11 states. Today, Walmart has sales of $421 billion and 8,970 locations worldwide. This type of unprecidented growth came from geographical expansion, and at the expense of smaller retailers that were not able to track their sales as efficiently. Mass retailers such as Walgreens and Target, realized the power of information tracking and automating their processes with Electronic Data Exchanges (EDI) in order to conduct more transactions with less resources. ¬†In fact, the reality is that we are able to sustain a standard of living much higher than pre-1980′s due to a highly mechanized means of¬†delivering¬†products to market.

Measuring Productivity of the Construction Industry*

The productivity of the construction industry, as measured by constant contract dollars of new construction work per hourly work hour, has gradually declined (with some modest exceptions) over the past 40 years at an average compound rate of -0.59%/year (see Figure 1). This is particularly alarming when compared to the increasing labor productivity in all non-farm industries, which have experienced an increasing productivity of 1.77%/year over the same time period. Over the past decade, this trend has slightly improved but the decline in construction labor productivity relative to the rest of the industry has continued.

This is a serious problem which indicates that over the past 40 years, construction projects have required significantly more field work hours per dollar of contract. In other words, the¬†construction industry seriously lags other industries in developing and applying labor saving ideas and in finding ways to substitute equipment for labor. While there are a number of construction tasks that have been made more productive through the use of labor saving equipment, it is clear that, looking at the whole industry, there is a significant productivity problem. Why is this the case and what can be done about it? First, let’s review the productivity data shown in Figure 1. ¬† (read more)

Figure 1. Labor productivity index for US construction industry and all non-farm industries from 1964 through 2003.

*From: Labor Productivity Declines in the Construction Industry: Causes and Remedies, Paul Teicholz, Ph.D. Professor (Research) Emeritus, Dept. of Civil and Environmental Engineering, Stanford University

Where is The Single Trigger Event (Bar Codes) for Home Building?

Now, the next question is where is my bar code for building the home? If that’s your question, then we’re beginning to make great strides into the next evolution of building homes. This would not have been possible if it were not for the advent of just a few key ingrediants:

  • Internet
  • Building Information Modeling (BIM)
  • Application Programming Interface (API)
  • Web Based Store Front

The model is relatively simple, in that all information for building the home must be linked to any and all retail areas for a home builder. This means that data that is incurred in the design process must be associated with the builder’s marketing materials on the web (ie store front). Think of it if you will, the home builder’s web site is their retail store and that any purchasing activities will need to be done in their store. Once a customer buys the product, then the needed data is then exported through API’s into the appropriate areas to fulfill the transaction.

This model does not mean that builders are  going to do away with sales agents, models, and other traditional areas of home building. What is does mean, is that the information that is developed from Building Information Modeling (BIM), can now be linked to web-based interfaces such as floor plan options, Sales CRM, builders suppliers, and others. The single trigger event pull-through strategy (ie bar code), allows for all transactions to be interconnected with each other only if the event occurs. So in doing so, information flows according to Figure 2.

ÔĽŅFigure 2 – Purchase of a home and affiliated options triggered by customer, allows for pulling through of labor and materials with information created up stream in the design stage with BIM through the supply chain network.

In summary, we are in the midst of the most exciting times for home building in the ¬†history of the United States. We are being confronted with razor thin¬†profit margins in a time that productivity is at rock bottom. In order to deal with single digit profit margins and high Sales General and Administration (S G & A) costs, we must automate our processes. This can be done with coordination of both design and material specifications through BIM. Once the data is formatted, it can then be passed to a builder’s admin system for both material and labor pricing and scheduling to construct a home. Of course, this transaction gets triggered by the online selection process by a home owner either with a designer and/or sales agent. Once we begin to emulate other industry’s ways to improve productivity, then we’ll see better profit margins in the future of home building. The future is bright!

 

 

 

 

 

 

 

What’s Your Collaboration Quotient?

Collaboration is key
Hiring a key staff member with an impressive IQ is undoubtedly a benefit to achieving your company’s goals, and even better if they possess a high EQ/Emotional Quotient to help manage team members effectively.¬† But, what is your company’s CQ/Collaboration Quotient?

Many business leaders today are increasing their quotient level by identifying the tremendous opportunities available to them through enterprise collaborations – all parties working towards a common goal.¬† Before you jump on board; however, you’ll want to assess the types of problems your business wants to solve.¬† Here are a few examples of how multi-party collaborations can help solve a business problem, address an immediate crisis or set loftier milestones:

  • Draw more innovation opportunities
  • Advance effectiveness & efficiencies
  • Decrease time-to-market cycle
  • Joint ¬†”strategy focus” and desire for same end result
  • Avoid duplication of efforts
  • Streamline the information flow which decreases errors
  • Reduce overhead, improve profits
Clearly, we’ve all conducted in-house collaborations with project teams for years.¬† Adopting multi-party collaborations adds that next level by integrating your in-house team with outside specialists who possess the necessary tools and technologies for bringing about the improvements essential to reaching your goals.¬† The biggest roadblock to teaming with outside experts can be the push-back from your current in-house team.¬† To build confidence, it’s important that they understand how the tools and share of information processes can best be integrated, the value the partners bring to your company’s bottom line, and how the integration process will ultimately make your company increasingly more competitive.¬† The overall collaboration effort brings everyone onboard and driving for the defined common goal of the company, which drastically raises your CQ/Collaboration Quotient.
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