Builders get advice on wartime selling
By LEW SICHELMAN
© St. Petersburg Times
published February 22, 2003
WASHINGTON -- It's common for lenders to go to a would-be home buyer's residence to get a loan application filled out and signed. If the United States goes to war with Iraq, the builder of your home might do the same thing with his product.
Builders can't take their model homes to your door. But they can take their floor plans and contracts. They also can take carpet and tile squares, and samples of all their other options and upgrades so you can make your choices in the comfort of your home.
And they should, says Richard Laermer, a New York public relations executive and author of the bestselling book TrendSpotting. He says that in time of war, builders are wise to rise to a new level of hand-holding.
"If you think your buyers were high-maintenance before, that was nothing," Laermer said at the recent National Association of Home Builders convention in Las Vegas.
Laermer, whose firm, RLM PR, was named one of the fastest-growing agencies in America by PR Week magazine last year, offered this advice during a convention session titled "Are You Ready for Wartime?"
The room was packed with builders worried about what they should change about their products and marketing efforts if hostilities break out.
Laermer told them to dramatically increase their coddling. "People stay home during times of stress, so go there. Go to the place where they feel most comfortable," he said.
History suggests that builders won't go away if a war breaks out, and neither will real estate brokers and lenders. Nor should they, said Franz Gregory, a Seattle communications and marketing executive whose firm, Sgwcreative, works with real estate clients nationwide.
"An understanding of the historical context of advertising and marketing during times of conflict and crisis helps us gain the confidence not only to deal with doom and gloom, but to actually achieve breakthroughs in entirely new creative ideas," he told the builders.
A native of Germany who was born in 1945, Gregory showed dozens of World War II-era ads by well-known companies, including Coca-Cola and Amana. German companies continued to advertise, too, he said, even during the war's final days, when hope of victory had vanished.
"Even during the darkest days, marketers did not appear to lose sight of the fact that there could be a better future," Gregory said. "In the midst of desperation, as their world literally collapsed around them, German consumers caught a glimpse of a peaceful, prosperous life."
Builders and brokers may want to shut down at certain times, such as the anniversary of the Sept. 11, 2001, terror attacks, to let employees spend time with their families, Gregory said. But otherwise, they should keep their model homes and sales offices open and remind everyone that visitors are welcome.
"It's smart business to keep advertising in uncertain times," Gregory said.
He told the builders that if any of them have doubts about keeping their company name before the public while Americans are doing battle overseas, they should opt out. But he also said that 86 percent of those who advertise during unsettled times "stay more top-of-mind than their competitors."
"There is a universal human spirit that longs for peace and normalcy, for the familiar, for the trusted brands and images that help define our daily lives," Gregory said.
But, he said, the message should be different during wartime.
Instead of pretty pictures of houses or young families romping through the community park, use American flags or the new icon of antiterrorism, the photo of the firefighters raising the flag in the midst of the rubble that was the World Trade Center, he said. Or instead of a commercial, how about a sponsorship? Or a memorial?
"Think community, not project," agreed John Schleimer, a marketing consultant in Roseville, Calif. "Give your subdivision a heartbeat."
Laermer, the PR executive, concurred. "Wartime brings out a whole different type of flag-waving," he told the builders. "People tend to dote on the bad, so you must accentuate the positive. Be there with them."
The idea is to stress patriotic or nationalistic themes, not next week's price increase or final closeout. Gregory showed one ad with a floor plan that replaced the names of the rooms with such words as "hope," "freedom" and "security." Instead of "kitchen," for example, the room was labeled "dignity."
At the same time, though, Gregory told builders not to get too cute. Reminding them that they are talking to a generation of potential buyers that hasn't lived through a major conflict and may be far more skeptical than its predecessors, he said they must be careful with the tone and content of their ads. Otherwise, the backlash could be furious.
"Consumers can tell the sincere from the inappropriate, the insensitive or phony," Gregory said. "But they will support a spirit that moves us toward normal lifetime activities, even in the context of caution and wariness of what is going on."
Advertising and marketing aren't the only things builders will adjust if the United States goes to war. They also will fine-tune their products.
Nothing radical should be in the offing, said Schleimer, who was a helicopter pilot in Vietnam. A little tinkering should do the trick.
For example, houses now more than ever need adequate space for gathering, if not in a great room, then certainly the kitchen. A wall for a big-screen TV should be a focal point, not a fireplace. "When we go to war, we go to Fox and CNN," he said.
Whether upstairs or down, master bedrooms should be shown as retreats, not just someone's sleeping quarters. Flex space that can be used in a number of ways is paramount, especially if a war becomes protracted, as people stick closer to home and want space for activities around the house.
If a war is brief, builders may want to do nothing more than sit tight. But if it looks as if it will be waged for some time, they would be wise to rein in their list of extras, at least for a while, Schleimer said.
"Don't overspec your houses," he said. 'It's better to put your money into the front end of the community and have a realistic options and upgrades program."
He also advised those who have "value-engineered products" (stripped-down, modestly priced homes and options) to dust them off and those who don't to start creating them, just in case. And he told builders of more expensive houses that they might want to hold off moving ahead with new projects, at least for the time being.
"I'd be a little less aggressive with my land or lot buys if I was a high-end builder," Schleimer said. "That market will be hit the hardest because it's discretionary. When there's no urgency, the tendency is to pull back. I'd also develop a basic product with a great cost per square foot as a hedge."
Short or long, though, a war is likely to affect the housing sector no more than a typical economic cycle, Schleimer said. He provided a historical perspective showing that during conflicts dating to the Korean War in the 1950s, the two key indicators, housing starts and employment rates, were up and down.
"It's not all doom and gloom," he told the builders. "We've had peaks and valleys during previous conflicts, and you should expect that again. We're going to see some stress; it's unavoidable. But even during a war, there's still houses to be sold."
-- Lew Sichelman is a syndicated housing columnist who lives in Maryland.
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