Many home builders readily invest in employing architectural services or building model homes of their product to help drive sales. They know these types of expenditures are essential to selling their homes. But for some reason when it comes to investing in marketing, many builders see it as a “nice to have” part of their business rather than a “must have” for achieving their business goals.
I often ask home builders if they employ trained and certified architects, lawyers and CPAs to handle important aspects of their business. They typically nod their heads in agreement. But when I ask who is leading their marketing efforts, I’m often met with blank stares or answers such as “an intern” or “a not-too-busy salesperson.”
For those taking this kind of marketing strategy, it comes at great risk. It’s not just important to work with a trained and experienced marketing professional, it’s imperative for home builders to understand the importance of marketing, set clear priorities and establish a solid go-to-market strategy.
Marketing Budgets: How Much to Spend
Many business owners are salespeople at heart. As a result, a consistent theme across many companies in many different industries is a lack of understanding around how to properly allocate a marketing budget that produces measurable results.
Business owners often say they want to spend as little as possible, but still get great results. Unfortunately, that’s not realistic. At minimum a line item dedicated to marketing should be included in the budget with a specific, consistent amount designated to it.
For home builder marketing, industry standards state that a sound marketing budget should be around 5 percent of your gross projected revenue to maintain current awareness and visibility (NAHB and SBA). On the other hand, the marketing budget should be around 10 percent to grow and gain market share. Breaking it down even further, about 1 to 2 percent of that gross revenue should go toward advertising efforts alone.
How To Allocate Your Established Marketing Budget
How much you are willing to spend on marketing is only half the equation — it’s then time to begin allocating the marketing budget. Allocation can be different depending on where you are in the country. While traditional media like a newspaper advertisement or direct mailer might work wonders in one market, it might not make sense in another. Likewise, a paid digital or social media advertising strategy could work well for many, while some may thrive on organic content marketing. The best strategy is to employ the full marketing mix and test along the way to see what’s working best. Do more of what works and less of what doesn’t. This may sound easy, but it requires persistent effort.
When it comes to home builders establishing a marketing plan, it’s about consistently planning to have financial resources available in good times and bad, and then allocating those resources in the most productive way possible. It takes discipline to maintain that line item percentage, and expertise to continuously work to measure and improve your results over time.
In Good Times and Bad
The home building market in the United States is experiencing significant growth. According to the National Association of Home Builders, single-family housing starts nationwide are forecast to increase 4.7% in 2024 and another 4.2% in 2025, reaching a pace of 1.3 million units.
In this optimistic market, builders may even have more business than they can handle and think it’s a good idea to stop paying for marketing and advertising altogether. This is actually the time to take those efforts to the next level and invest for the future. Redirecting your budget towards marketing infrastructure, such as digital assets and resources like virtual tours, professional photography or technology platforms, rather than solely focusing on lead generation, can better equip you for potential slowdowns in the future.
Consistency is key for home builders when it comes to their marketing efforts, in good and bad times. You need a comprehensive strategy that reaches across multiple channels because each asset influences a buyer’s decision in different ways. Throughout it all, having the right team in place ensures your money is being invested wisely.
Help is Available
Epcon Franchising provides marketing support for home builders and immediate access to a vast library of marketing assets: 3D renderings, virtual tours, floor plan brochures, full campaigns and much more. More importantly, you get access to our strategic marketing blueprint — a roadmap for putting all the materials we use to promote ourselves in our corporate markets into practice.
Testing different marketing tactics across multiple channels and using that data to drive decisions is when the magic starts to happen. Marketing isn’t rocket science, but it’s getting closer to it.