Are you curious about what the current residential construction industry looks like in terms of sales and marketing?

With the profoundly changing market conditions, it’s more important than ever for home remodeling & custom homes companies to capitalize on existing opportunities to gain a competitive edge.

In this blog post, Russ Stephens from the Association of Professional Builders joined us to reveal some of the highlights from their annual State of the Residential Construction Industry survey.

Read/Watch/Listen now if you’re wanting your project or product details to get noticed by potential customers!

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Transcript:

Rick:  Today on Conversations That Convert, we will be answering the question, what is the state of the residential construction industry as it relates to advertising, marketing, and sales? Let’s get started.

Welcome to conversations that convert every week, we’ll spend about 10 to 15 minutes tackling relevant lead generation, marketing, and sales topics for remodelers home improvement companies, and home builders, Conversions that convert are brought to you by builder lead converter, perfect sales assistant.

And now here’s Rick and Daiana. 

Rick: Welcome everyone. Daiana is off today, but welcome to Conversations That Convert. My name is Rick, and the question we’re answering today is what is the state of the residential construction industry for sales, marketing, and advertising? We have a special guest with us today and that is Russ Stephens from the Association of Professional Builders. Welcome, Russ. 

Russ: Hey Rick, how are you doing? Thanks for having me. 

Rick: Thank you for being here. We really appreciate it. You have been on the program once before and we love having you on you have a wealth of knowledge. And the neat thing is we just got to meet face-to-face for the first time in Las Vegas at the Builders Show.

So that was a lot of fun. But I know that there’s something big, bigger that’s been going on, with you guys, and that is your annual state of residential construction industry survey. So tell us a little bit more about the Association of Professional Builders and the survey, Russ. 

Russ: Yeah, this survey is now in its third year and yeah, it just keeps getting bigger year on year, thanks to the industry partners that have helped us get this survey out to so many residential home builders and really take a, a snapshot and a, and a pulse of the industry on what’s really happening within those residential building companies.

So this year’s survey was completed by over a thousand residential home builders who each answered over a hundred questions, which is you know, quite an incredible feat really, cuz that does take a lot of time. And those builders did go very in-depth with the answers to the questions which covered marketing sales, operations, construction, financials, the team, and training and planning.

So it’s a very, very comprehensive survey that pulls out a lot of very comprehensive data that yeah, the industry has been finding very useful. 

Rick: You know, it’s surprising. You know, you guys have been doing it all for three years, but when I, what are such a great idea this is, is, you know because as a, we always wanna look at our peers in the industry and going well how am I doing compared to my peers? Or what are they doing compared to what I’m doing?

And so I’ve been able to take a look at the preliminary data that you gathered, and it is really interesting to see. how many builders are operating the same way, and also how few builders are really going to the next step to grow there, grow their revenue, grow there, grow their margins. And so I’m excited to hear some of the highlights today.

Russ: We will focus on sales, marketing, and advertising. We won’t get into the rest of this, but I know that you will be releasing the survey, later this year is that right?

Rick: Yes, in March, the survey gets published and that will be available for all builders too, to download as a PDF version.

Russ: And we will give you information on how to get that survey here at the end of the program. But without further ado, I would love to jump into the survey. We’re gonna start with marketing and a few questions too, to go with that is, first of all, you saw the result. What jumped out at you? You know, I think both good and bad as it relates to how builders are, are marketing or maybe not marketing their companies.

Rick: Yeah, I think the big thing that really jumped out to us in terms of marketing was that the number one challenge for residential home builders, something like 40% of builders had this challenge and it was generating quality leads. Yet what was really interesting was that 64% of builders did not produce a single blog article in 2022 and 60% never emailed their database.

And even more surprising social media activity was actually down in 2022 when compared to 2021. Now I think all of these things are, are understandable because, given the challenges that builders had during 2022, they were busy rescheduling, constantly rescheduling, trying to get materials on site, trying to get subcontractors on site, and their time was, was simply destroyed.

And then I guess on the other end of the scale leads were flowing in, and there was unprecedented demand from consumers. So I guess that kind of meaning in the mind of, of builders, the, the priority went down for marketing. But it was surprising to see that it was such a big challenge given that these fundamentals weren’t being done.

Russ: I remember in 2022, just talking with some clients and just remarking on I, I, I can never remember a market where you had so much demand on one hand and it was so hard to make money on the other just because of supply chain issues, volatility, and pricing. You couldn’t find labor construction schedules getting stretched out. It was really such a unique year. 

Rick: Yeah. Yeah. It’s a profitless boom isn’t it, this is what we’ve experienced. And I think the worst thing of all is the perception by the media and the public that builders are making a fortune. They, don’t realize and understand just how hard and long builders are working for actually less, less profit. And yeah, they’re not getting the recognition they deserve for overcoming some incredible challenges over the past two years.

Russ: You mentioned a lot of, I call in the report, I call them never. You know, I never do this. I’ve never posted a blog, and I’ve never done social media. I’ve never, you know, done some advertising things.

Rick: So I see a lot of nerves there. But do you think, do you think are, are, are builders struggling to understand what sort of content they should publish? 

Russ: Yeah, this is always a big challenge for a lot of builders, what do I actually write about? And I think yeah, we all suffer from this to a certain degree. It’s the curse of knowledge. Yeah. We make an assumption. All the stuff we know, we make an assumption that maybe it’s not that valuable to other people.

And maybe they already, they already know it. But, the fact is they don’t, builders have an incredible wealth of knowledge and you’ve only gotta think about the frequently asked questions you get asked in your sales process. You know, what are those questions right at the beginning?

What are those questions that come up through the sales process? And that’s what you wanna be writing about. You wanna be addressing those because when you do, you become the authority in the industry. You become trusted and you are providing great quality content to the public as well. 

Rick: Absolutely. So we’ve seen a shift in the market, obviously, and I think this is globally from what I can understand in that the market’s becoming more balanced. Demand has come down a little bit as its interest rates have gone up. So now you may have builders out there that say, okay, I’m one of the never, right? I’m guilty as charged.  Where do you suggest, they go or, you know, what, what can you advise, can you give them, just to get started and take that leap of faith? 

Russ: Yeah. Well, the most important thing I believe, for any business, not just builders, is to have a content marketing strategy, because that is what will generate quality leads. And although it may seem quite daunting when you look at it from the outset or from the outside as to just what you’ve gotta do and how much work that is, it’s actually quite a leverage because simply writing one script for a video say a three or four-minute video, which might take an hour or so just to put the structure in place. You can then adapt that script to be a blog article.

You know, in literally a few minutes, you can adapt that to be a blog article. You can then slice that up into an email campaign. And then you can slice it even further to create multiple social media posts. And then, of course, you can even slice the video up as well, for social media as well. So it may appear quite daunting, but when you sit down, with a plan, you’ll find that you can create a lot of this content once and then just use it in multiple different ways.

And it probably is a lot easier than a lot of people think. I think the hard part is, is just thinking, well, what am I gonna write about? And, like I say, it’s, it’s really the questions you’re being asked sit down with your team, brainstorm a dozen ideas, and get started on that content marketing strategy. 

Rick: Ironically, you just described what I do with this podcast, I’m like, check, check, check, check. Yeah. The last thing that we did was we created shorts, you know, so we have a 15, 20, 30-minute podcast and we create short videos out of that and use that for social media. So let’s, let’s move into advertising as we get, as we get outta marketing. So, what was the percentage of builders that you found invested in advertising in 2022? 

Russ: Well, in the US it was around about two-thirds of all builders invested in paid advertising. Interestingly, in Canada, that figure is about 80%, and Canadian builders also do a lot more marketing than builders in Australia, New Zealand, or the US. So, Canada is really leading the way, in this respect. So yeah, go Canada. 

Rick: You know, they have a geographic challenge as well, right? They have such a huge country and, you know, not a lot of huge population centers. So they might be a little bit more spread out than what other builders are, are, are their norm is.

Russ: It does drive innovation, doesn’t it? These, these challenges. Yeah. We see it all the time. It’s fantastic. 

Rick: Yeah. So where do you find they are spending advertising dollars? 

Russ: Well, the most popular place to spend advertising dollars is still Facebook. It’s closely followed by Google Ads, which covers both search and display campaigns, and then even Instagram. And I would imagine that’s so easy to advertise on Instagram when you are advertising on Facebook.

Not much advertising going on on YouTube at the moment, only around about one in 50 builders are utilizing YouTube, which is a great channel. Yeah, that is a fantastic opportunity for builders. You can get some very, very high-quality leads through YouTube. Good to see, not many are spending money on advertisers on tv. We’ve not seen a good ROI from TV for a long, long time now, but yeah, it’s the, it’s old favorites that still lead the way. 

Rick: The age-old question is normally, Rick, how, what percentage of my revenue should I be spending on advertising? And I know you asked that question. So two part question here is, what did you find builders? You know, the majority were spending on ads from a percentage of revenue. And what do you recommend? 

Russ: Yeah, it is still disappointing to see the low percentage that is being spent on advertising around about 40% of builders spent 1% or less, which is simply not enough. , we recommend between three and 5%, which may sound like a huge number and a huge investment, but the fact is, the data does reveal that the builders that spend more on marketing and advertising have higher net margins, so not just gross margins.

Even when you take into account how much they’re spending on advertising, they still produce higher net margins. And the fact is around about 75% of builders are operating on 3% or less net profit. And it’s the ones that are above that, Always advertising. And the fact is the more they spend, the higher their net margins. 

Rick: I, you know, I know you just did a podcast on marketing and margins, and I’m sure you discussed this, this, this very thing, but we were in Las Vegas and I gave a presentation there and, and you know, I, I said the, the goal of any builder is to say no and have the opportunity to say no when it’s the wrong fit, wrong project, wrong place, wrong personality, maybe with the client or, or, or perhaps the wrong, I can’t remember the fourth one, but you wanna be able to say no.

So from that perspective, do you equate that if I invest money in marketing, I have more opportunities, and I can then pick and choose the best jobs for me, and be able to get my markups where I want them? And if somebody, if it’s the wrong fit for me or somebody, says no, I have more opportunities to draw from in order to fill my pipeline.

Russ: Yeah, look, that’s exactly it. And by the way, what a great presentation that was that you did in Vegas. I, I attended that and I, I, I loved it. So yeah, I highly, highly recommend getting to see Rick next year if you, if you didn’t catch it this year, but yeah, that’s, that’s exactly right.

Margins are linked to marketing, and the reason for that is supply and demand. So, when you have more demand than you can supply, that’s when margins go up. And it also gives you the ability, like you say,o, to then disqualify more people because when we don’t have enough opportunity, we become more desperate and we try to fit a round peg in a square hole. And, and we all know how that ends up, especially in this industry where the relationship with, a prospect and a client is a lot longer than a fair amount of marriages these days.

So yeah, we have to be careful about who we are taking on as clients in this industry, but that is a very good way to put yourself in, a strong position to disqualify those people that are not a good fit for you, but also establish yourself as a, as a leader because you become more confident when you have these opportunities.

You become less emotionally attached to the outcome of each sales meeting and with each opportunity, you become a little bit more detached and able to follow your own pro-process. And you’re also seen as a strong leader by those clients who will be more compliant through the build process as well, which is something I’m sure every builder would like.

Rick: Absolutely. Yeah. Good. Very good points there. Wise, wise is wisdom. So I was, I was talking to a prospective client yesterday and he brought up SEO or search engine optimization and he attached, the definition of it as a black hole.

And so I know a lot of builders feel that way, where you’ve got, everyone’s gotten the call, Hey, I can get you on page one of Google. All you have to do is pay me some money and let me work my black magic. But you did ask the question, what percentage of builders invested in SEO? So, what were the results for 2022? 

Russ: Yeah, only about a third of builders actually invest in a search engine optimization strategy which was a little surprising. And when we dug deeper into those numbers, we can see about a third of builders that do invest in SEO spend less than $350 a month. Another third spend 750 or below, with about a third, which is what we would recommend spending over 750.

Now I do say that with a caveat because SEO Is just like any other advertising strategy, you’ve got to measure the results and see an ROI. Cuz like you say, all these companies, will promise you the earth in terms of getting you on page one of Google. And let’s be honest, that’s not hard to do, is it?

You you create a long tail keyword that no one’s searching on, get the client on page one, and it looks like you’ve done your job. But the only way to measure these guys when you, take on an agency, is to look at their results. And by that I mean, look at how many new marketing qualified leads, not leads, but marketing qualified leads were generated organically and you wanna divide what you are spending with that company by that number of leads to give you your cost of acquisition.

And does that fit in with your budget for acquiring new marketing qualified leads mid typically? These, these leads are of a higher quality. So you can even go a step further and look at the cost per sales qualified because that is, you know, a higher percentage tends to go from marketing qualified to sales qualified. But you’ve got to be measuring those numbers to know if you’re getting a return.

And, I would suggest that if you are spending. If you’re on the lowest end of the scale in terms of what you’re spending on search engine optimization, then you could be dealing with a company that might be doing more harm than good. We see this with a lot of overseas companies. They actually do more damage than benefits. So yeah, you gotta monitor those results in order to see that you’re getting an ROI. 

Rick: Yeah. Good, good, good point there. I’ve always found too, are we’ve tracked lead conversions to, as you, you know, I call it, you wanna get into a conversation and then a contract. So it’s an opportunity conversation contract. And I’ve always found that those organic leads that come from an organic search, always convert much, much higher than paid ads.

So, and you mentioned it as well as you, you, you need to measure by your leads that are captured. And so, you know, the, the first thing I usually tell builders when it gets into this is like, well, what should I do? I said, well, the first thing you wanna do is plug the leaks, you know, if you have a leaky website, if it’s not designed to capture leads, don’t start throwing money at it.

Plug the leaks first, set it up so it does capture leads, and then you invest and then you, you measure and, and manage from there. So that’s very very, very important. I think everyone understands that. This leads us to our next question, which is lead generation. How many leads per year are most builders, generally? 

Russ: Yeah. Very few. In all honesty, the data reveals that builders are way too reliant on referrals, which kind of puts them into this difficult situation where they become dependent on too few leads. And, and then end up dropping their margin in, you know, as times get tougher in order to make sure they convert those leads. In terms of, you know, the lead conversion, as you say, those organic leads, they do convert way higher in terms of Well, yeah, especially when you compare it to paid advertising where we, we suggest the ratio that builders need to be prepared for is around about a hundred to one.

Now, that is leads generated, not marketing-qualified leads or sales-qualified leads. It is led, but it’s about a hundred to one on paid. And a lot of people will look at that and think, no way am I spending all that money to generate a hundred leads just to get one contract. And it does vary.

And obviously over the last two years that that ratio’s been smashed because it’s been a lot easier. But this is more of a typical ratio that you’d see for a typical building company. But the important thing is the numbers still work. You know, you can generate just one contract out of a hundred paid leads and that is still profitable. So, that’s the only thing that matters at the end of the day. 

Rick: And, absolutely. Absolutely. And that, that was one of the things that I saw that was quite concerning is when I’m only relying on word of mouth really what I’m an assuming is that the very good nature of my client, they are gonna go out of their way to think of me and tell their friends, family, coworkers or, or neighbors that they should use me as their, as their builder of, of choice.

But, and you and you touched on this as well, we all know that that client referral lead converts the very, very high. It’s the best type of lead we can get. We all know that conversion is so high because the trust that was established between you and your client was then transferred over to the new lead and it’s a much quicker sale.

But at the same time and I’m, and I’m assuming you talked about this in, your marketing and margins podcast, I’m, because I’m only generating a handful of leads, even though they’re high-quality leads and they might convert well. I’m still somewhat at the mercy of these leads. Right. So I can get a bad referral lead too, just like I can get a bad organic lead or, or paid lead.

Russ: Yeah. I mean, like you say, generally referrals are fantastic leads. You can even typically get a higher margin out of those referred leads because they there’s so much trust and authority already there. But like you say, you don’t want to be relying on them. They should be the cream on the top.

They shouldn’t form the basis of your business. And, and again, that all comes back to supply and demand, which is key in business. And, and that links us into a strategy that I know you speak to your builders a lot about Rick and that is construction slots and, and construction slots is the strategy of mapping out your availability for the year ahead and limiting actually capping your supply in line with that plan.

And then of course the goal is to generate more demand than you can supply because that helps you to increase margins. When you got, your margins, at the correct level, that’s when you can then scale up the next year. But I think it’s very important that you, you don’t increase your supply to meet the demand because you, you just end up on the, on the treadmill then and, and, and the guys that aren’t doing these are the ones that are in a vicious cycle.

They’re, they’re not spending money on advertising or they’re not spending enough, so they’re not generating enough leads, which means they are working on lower margins. They’re getting lower lead flow, so fewer opportunities. And in their mind, they then can’t afford to spend money on advertising. So they’re trapped in this vicious cycle that they can’t seem to break out of and, and you have to be bold. Yeah.

You, as you say, you gotta plug those leaks first. Yeah. You don’t wanna be spending money ramping up advertising when your website’s got leaks, but you also wanna fix up your margins. And you, you do those basics first. And then you, you have to be bold. You have to invest in yourself and invest in your business, and you’ll, you’ll reap the reward. 

Rick: We used to, when I was a sales training we learned a technique called controlled release of information. It’s where you would provide just enough information to the lead to make them want to come back to you and, and get more information. And I, I think if you, it’s a great analogy looking at production selling is that I’m gonna control the release of slots.

And so therefore, I have fewer slots and more opportunities, and then I can pick and choose the best people for those slots. So two things that have come up that I, that I’ve heard one is, well, I don’t want to take on too much business, to which I, I, I say you know, I don’t understand this myself. I’m not a psychologist but, for some reason, the bigger backlog you have, the more desirable you are.

So talking to a client who said, I’ve got a, you know, 12, 15-month backlog. I’m telling people I can’t get to their job until 16 months. And usually, their answer is, we’ll wait, you know, they, they, it’s like, if everyone else wants you, I want you too.

Russ: It’s how we’re wired, isn’t it? We’ve been wired to desire scarce resources and you know, it’s kind of so obvious it sits in front. It’s why we have two restaurants. One’s empty, the other has a queue, and people would rather wait in line too, especially if you’re new in town. You know, which restaurant should I go to? Well, I’ll, I’ll queue up for this one. 

Rick: Absolutely. Well, so let’s switch over to. And you know, so we talked about all the hard work that’s going into marketing and generating leads. But, I really want to ask you, what is the impact that you see of a scripted sales process? And, then the follow-up question to that is, what percentage of builders? Do you have a documented sales process with scripts? 

Russ: Yeah, the sales process is absolutely massive in a building company and, I think probably even more important than a lot of other industries because our sales cycle is so long and it’s interesting, it’s how the association, Association of Professional Builders came into being in, because we started out as a marketing agency for residential home builders, and we were generating quality leads through Facebook and Google, and building websites.

And when we spoke to our clients, half of them were saying, this is great, sold them a problem. I’m sorted. They were happy, but the other half was saying the leads are rubbish. Yeah, they’re, they’re not as warm as the leads I normally get. They’re not converting. So when we dug deeper, we found a difference between these two sets of builders.

The ones that were struggling did not have a documented, repeatable sales process. And that is why in 2014, we launched accurate sales training. Which then became the Association of Professional Builders. But it all started by mapping out this sales process because the builders, although they were getting the same quality leads generated, they weren’t able to convert them simply because they didn’t have a repeatable process.

And, even now, it’s while it’s disappointing that only around half of building companies do have a documented sales process in place. It still is an improvement in 2021 when only 45% had one in place. So this is all about progress, not perfection. I guess.

We are seeing the industry get more and more professional what is significant however, Are that companies that do have a documented sales process in place are approximately four times more likely to achieve industry-standard gross margins of 25% and above, and which equates to a 33.3% markup. So the proof is in the data. If you put a sales process in place, you will be able to increase your margins.

Rick: Very interesting, very interesting. You know, you go onto a lot of builder’s websites, and one of the things you see that’s probably most common is it’ll say free estimate. You know, ask me for a free estimate or click here to get a free estimate.

And it takes you to a form and you know, you fill it out and I guess you get a free estimate from that. So that’s, that’s often used to entice that lead inquiry. But of course, that goes into your sales process as well. So what are your feelings on offering these as part of your sales process versus charging for an estimate?

Russ: Look, I, I think free estimates are fine and in all, all honesty, they probably should be free because they’re pretty much worthless now, quotes, however, that is a very different matter and they must be part of a pre-construction contract, which means a plan for the quote.

I think when you go out and you actually say to them, the prospect, I’m gonna charge you to quote your job, they can’t correlate that because they don’t understand the difference between a quote. So if you try charging for a quote, they’re never gonna understand the value. So you’ve gotta make that quote part of a pre-construction contract where you deliver other value apart from the quote, and then you, you get paid to quote, but not in the same way.

But education is required for the consumer to actually understand this because they have no idea how much work goes into producing these fixed price quotes that form a contract. It’s literally, it’s weeks of work and it’s not viable for a builder, to do that amount of work for free. And again, once again, the data proves that the builders that charge for quotes, close a higher percentage of opportunities and earn higher margins. The proof is there. 

Rick: And let’s talk a little bit about sales training including how to deal with objections, you know, what do you see as the impact of this investment or lack thereof? How does that affect the end result? 

Russ: Well, again, very, very few builders are investing in sales training or conducting sales training. So it’s, it’s, it’s about 20%. One in five builders actually invests time or money. And that could be a consequence of the market conditions where, again, sales have been relatively easy over the last couple of years, and I guess they’ve been too busy actually selling, or their sales team has been too busy selling without the need to, to learn why they’re, why they’re not selling. 

Rick: I remember I was at the International Builder Show in the speaker-ready room. I think he might have been there too. And I was talking to some sales trainers that were there and they said all of a sudden about October of last year, their phone started to ringing again.

And builders said, you know, I think it’d be a good idea if I start training my salespeople. And the reply was, do you think, you know. So, and by the way, going back to answer the question, the percentage of builders, if you average it across the four countries, it’s 52% that do charge for, a quote. So a little over 50% are, are doing it right. And the other 48% or 47%, are still giving it away.

Russ: Yeah. And I’m pretty certain that is a growing figure year on year. 

Rick: Mm-hmm. Absolutely. And, and, and as I like to tell you to know, then, my clients I’m talking to and I’m trying to say, Hey, you should be doing this. And I, I said, if you, if you position yourself as you are a builder or a, you know, I think the worst terminology we give ourselves is the general contractor.

I actually came up with this quote. I thought it was quite catchy that you.  position yourself as a general contractor. You generally attract people interested in the lowest price because you know, you’re, there’s no niche, there’s no specialty to it, it’s just you’re just a generalist. Whereas when you ask for a quote, instead of positioning yourself as a builder, position yourself as a consultant or an advisor. I said because of your client or prospect.

They understand if they want to go to their attorney, they have to pay to get information. If they go to their accountant, they pay, if they go to their doctor, their pain, and those are all advisors in their life. So if you become their new home advisor or their remodeling advisor and say, I am going to go through this process in order to provide you with good, accurate information, you can make a well-informed choice. It clicks with a lot of people.

And they said, the key is very simple, is that as long as the client or the prospective client feels like they’re getting more in return than you’re asking for in payment, they will always say yes. Do you know? And so that’s just a matter of telling the right story and the right positioning. And if they feel like, yeah, you know what? You’re gonna charge me $5,000, I’m gonna get a $10,000 in return sale. It’s the sale is made and they move forward. 

Russ: I saw, yeah, I saw an interest in the study and it was a tire shop where the guy behind the counter actually come out in a white overall clean. Overall just like, a surgeon or a doctor. And it led to a measurable decrease in people querying the price. So I think that that backed up everything you’re saying there, Rick. It’s all about the presentation, the communication, and the perception. Yeah. You can command these professional fees, but yeah, you have to act the part as well. 

Rick: And sometimes separate yourself, I mean, you talk about design-build. Let’s separate ourselves as part of the design/quotation process versus the building process. And you know, as we talked about in Las Vegas, let’s position ourselves as, hire me to do this first part, if you like me.

In other words, let’s date before we get married. If you like me, if you trust me, if you see the value of what I’m providing, you’re happy with the results. The expectations are, then you’ll, you’ll have the same part when we actually get married and you and you sign the contract and we actually, you know, do the work and build the home or, or remodel the home.

Russ: Spot on. That’s where the margins are. It’s why we always coach our members to transition from being builders to being design and construction companies. 

Rick: Absolutely. Absolutely. So last question, so your summary, biggest marketing, advertising, and sales challenges builders are facing as they enter 2023? 

Russ: I think the biggest challenge is forgotten knowledge. All those skills that have been built up pre covid and I’m alluding here to marketing and sales skills, all need to be dusted down and put back into play because advertising has got harder in the background. You may not have needed too much advertising lately, and you may not have noticed that it’s got harder with Facebook, it still works very well with content but it has changed.

And in terms of sales, one alarming fact that come out of our survey was the objections manual. The number of builders that have an objections manual actually declined, and I think that highlights as well that builders have not been having too many objections when they’ve been trying to sign contracts over the last two years.

People just wanted those contracts signed. But the danger is when we don’t document this knowledge and document our processes, it gets forgotten. So, yeah. If I had to summarize, the biggest challenge that builders are, are facing in 2023, it’s that the market is gonna soften. And the forgotten knowledge is, is gonna bite in terms of marketing and sales. 

Rick: That’s very, very wise advice and, and I’m, I’m so glad you, you, you mentioned that just from a perspective of marketing, you know, and, and, and was talking to some, some builders who said, you know, what do you think your product is? I think. New home or remodeled home, I said, that’s not your product.

I said that that is not why your clients are hiring you. I said they have, hope for a lifestyle that they wanna be able to enjoy in their home. They’re looking for somebody to help them achieve that. So if you can, you know, create the perception that you are the best one to help them perceive or excuse, excuse me, achieved that hope for lifestyle, you get the job. But if you think you’re throwing sticks and bricks up and they, they’re, you’re gonna lose the sale every single time.

You have to understand what are their underlying motivations. And, you know, everything starts from fear. You know, and we and we dealt this a little bit and we talked in Las Vegas too, is that you have to understand the fears of your, of your clients and be able to show them that you are the best one to be able to solve their problems and deliver there, their hope for lifestyle.

And so, you know, great builders, you could be great at throwing the sticks and bricks. Greater running jobs and processes. But if you’re not great at, marketing, advertising, and sales you will never achieve your potential. At least in my humble opinion. 

Russ: Absolutely. As a species, we buy on emotion. We make the buying decision on emotion, but we justify with logic and that in itself is a, is a clear explanation as to why it is not all about price. Price is simply what they tell you when they go with another builder. 

Rick: Yep. Absolutely. Great stuff, Russ. So anyone watching this, how did they get a copy of the report?

Russ: Well, we will be publishing the report in March and it will be available as, a PDF to download completely free of charge. We’ll provide a link that can be added to the show notes so that anyone listening to the show can download that PDF free of charge.

We do publish it as a hard copy report, and we do have a limited number of those hard copies to give away. All we ask is that you cover postage and packing. So yeah, if you click on that link, you’ll be able to download the report for free, and you’ll also be able to obtain, a hard copy if you desire that. 

Rick: And I, after reviewing the information, it was just a wealth of knowledge for me and really some stuff that I absolutely didn’t expect and, and, and some things that you know, you would expect that it just wasn’t there. So, it’s humbling to look at this and just really understand what is going on in the industry right now.

But I think that the take, the biggest takeaway from me was if I am a builder out there and, and I wanna grow my business and I want to grow my margins and I want to do things right, there is so much opportunity in the marketplace cuz so many of my peers are not really operating at their full potential.

So I can go to an organization like the Association Professional Builders, and I can get that coaching and training and mentoring that I need that accountability, which I think is a huge part of what you guys do as well with through your coaching programs and be able to systematically, you know, work my way up the, the ladder.

And it’s not all about, you know, revenue, but it’s the margins that follow, which is the really cool part about what you guys are doing. So absolutely encourage people to download a copy and, check you guys out as well. Any final words, Russ? 

Russ: Yeah, the, there is a blueprint for success margins. Attainable margins are probably way higher, than you may realize. So looking at the data and seeing what the benchmarks are for the industry, will help open the mind, hopefully, and then follow the blueprint so that you can achieve far more from running a residential building company.

Rick: And if there’s one thing builders should be able to do is follow the blueprint. Yeah, absolutely. Hey, thanks so much for joining us, Russ. We really appreciate, your insight, your wisdom, and getting the results, of the survey. Until next time, we’ll see you on Conversations That Convert.