When Choosing a Home Builder, Consumers 'Trust Thy Neighbor'

How to leverage happy customers to sell more homes
Tim Trull is Managing Director, Strategy | Stephen Heitz is Chief Innovation Officer

This article is a brief abstract of our exclusive study that takes the guesswork
out of marketing residential developments.

Download the complete 2018 Residential Development Marketing Report 


People have obtained important or interesting information by word of mouth since, well, forever. And, when shopping for a new home, it’s still the most preferred method of receiving communication.

In fact, 68.5% of respondents who participated in the LAVIDGE-commissioned research study ranked personal references (word of mouth) No. 1.

“Nothing is better than a referral from friends, whether it's [recommemnding] a vehicle, service provider or home builder,” one participant explained.

Another respondent put it this way: “It really is important to me that I get as much information as possible. After all, this is a lifetime commitment. It also indicates to me it would come from someone I know personally, and whose opinion I value.”

Respondents who favored word of mouth said:

  • “Relationships make me feel more comfortable that it won't be a fraud.”
  • “I can ask all the questions I want.”
  • “If friends and family are happy with the outcome, odds are, you will be too.”
  • “When a company is referred by a friend or co-worker, I am more likely to feel confident in the work that is going to be done." 

Word of mouth is not limited to face-to-face conversations or even those that take place naturally. Loyalty programs, which offer referral incentives and testimonials, can also be considered word of mouth.

68.5% of respondents ranked personal referrals No. 1 when purchasing a new home.A great way to spark discussion is to reach out to your customers in the midst of “magic moments,” when they are most likely to feel a strong brand connection. Invite new homeowners to fill out a customer satisfaction survey shortly after they receive their keys. Partner with an organization to handle the process with everything from postcards to a phone app or email survey, and you’ll likely receive many encouraging comments you can use in your marketing efforts.

One could also create opportunities for prospects to meet happy homeowners. In neighborhoods where homes are partially built, consider inviting residents to weekend barbecues or other socials near the sales office on days when heavy foot traffic might be expected. Your community will organically become more neighborly and your home buyers will have access to hear from those who have already settled in.

Traditional media came in second and third with television preferred by 63.8% of the study sample and direct mail earning thumbs up from 61.4% of respondents.

Respondents who favored television said:

  • “You can actually show the homes and the communities in a way that you can't on the radio or in a magazine.”
  • “I don't watch too much TV, mostly news, but advertising and visuals stick with me—especially [because] it is usually after dinner and my mood is more relaxed and receptive.”
  • “Because I'm relaxing and have time to process the ad.”
  • “I watch a lot of television and see most of my advertisements there.”

Respondents who favored direct mail said:

  • “If I get it in the mail I will at least look at it.”
  • “I can look at it on my own time without any pressure.”
  • “It would draw my attention more than an Internet ad, and be easier to review than an audio ad.”
  • “Because it will include pictures and prices and floor plans. That is how I bought my last house. I got a brochure from [a home builder] and went online after seeing it."

In some circles, social media is considered a form of “word of mouth.” And it’s definitely a method of providing a personal reference—be it in person or via a social media platform.

Which brings us back to the beginning: new home buyers want to learn about home builders from someone they know and trust. No matter how many traditional or digital touchpoints customers encounter along their journey, it’s imperative at least one contact comes from a genuine brand advocate.

Savvy new home builders will keep this in mind—and treat each existing client accordingly.

2018 Southwest Residential Development Marketing Report

This article is a brief abstract of our exclusive study about home buyers and their preferences for advertising and marketing tactics used by new home builders.


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