109 Providing a Service, Not Just Selling a Product - Darryl Stevenson Apr 20 2022

Greg Bray: [00:00:00] Hello everybody, and welcome to today's episode of The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine,

Kevin Weitzel: and I'm Kevin Weitzel with OutHouse.

Greg Bray: And we are excited today to welcome to the show, Darryl Stevenson. Darryl is the VP of Sales and Marketing with Arbor Homes and Elite Homes Louisville Division. Welcome, Darryl. Thanks for joining us.

Darryl Stevenson: Thanks, Greg. Thanks, Kevin. Happy to be on.

Greg Bray: So Darryl, why don't we start off by getting to know you a little bit and help us understand who is Darryl?

Darryl Stevenson: Yeah, sure. So, I'm with Arbor Homes and Elite Homes. You [00:01:00] know, I have the honor of, you know, serving our sales and marketing team in our Louisville division. So, been working in that function. I'm a midwestern guy, you know, from Indiana, now working with our Louisville folks. From a career perspective, have a background in kind of finance and accounting, and then went into sales and now have in the management perspective of the home building industry.

Kevin Weitzel: What drives somebody from finance to sales?

Darryl Stevenson: Yeah. Hey, great question, and often one I get a lot. No offense to anyone out there in the finance and accounting realm, right. An extremely important function of the business, but numbers were always my thing. I'm a pretty analytical person, but got into the business and really was, by all means, I guess, on paper successful, but really found myself retroactively reporting on a business, right, and I really wanted to help get involved in driving the business kind of on the front end, and so I hit a point in my career where I said, if I don't make this change, now I may not. So, jumped ship, and years later, I'm glad I made the move. [00:02:00]

Kevin Weitzel: So, in addition to that move, you have a personal side of you. Can you let us know one personal tidbit that we'll learn about you that we'll only learn on this podcast?

Darryl Stevenson: Maybe some of those close to me know this, but nothing crazy. I was an athlete in college. Athletics were a big part of my upbringing and my childhood. It's relevant now. I see the fruits of it later in my life and how important that's been and just the skillsets you learn and how much you learn about everything and how much really that applies to business just from a work ethic of, you know, accountability, and so it was a big part of my life and hopefully seeing some fruits of it carry over from a personal and professional aspect later.

Kevin Weitzel: What sports are you still in today?

Darryl Stevenson: So, today that's a different story. So, I was actually a cross-country and track runner in college at Indiana University, and then all through high school I did that and basketball, but people always ask me now, so you used to run? You run now? I'm like, no, I'm retired.

Kevin Weitzel: So, on track 5K or 1K? What were you running?

Darryl Stevenson: Yeah, I ran anything from, you know, a little bit 800, but I was [00:03:00] primarily a mile, 1500, up to 3K, 5K, 3K indoors, and then 5000 outdoor.

Kevin Weitzel: Eight hundred is grueling compared to those other races. The other reasons you learn how to set a pace, you just have to learn the pain, but 800 it's painful from the start to the finish.

Darryl Stevenson: That's right. That's right.

Kevin Weitzel: Wow. That's impressive.

Greg Bray: Now, Darryl, I have a really important question. Why is it not Louisville?

Darryl Stevenson: Hey. I would ask the same thing. So, I'm an Indie guy. I'm in Indianapolis. I was sitting down. I'm like someone explain this to me.

Kevin Weitzel: So, not only are you in the Louisville market now, but you used to live right next door to Illinois.

Darryl Stevenson: That's right.

Kevin Weitzel: Right?

Greg Bray: I lived in Kentucky when I was a kid and I remember telling my family, no, it's not Louisville. It's Louisville. You know, chew on it a little bit, right, to get that. All right. We've now insulted our listeners, so I apologize, so. Tell us a little bit more about Arbor Homes and Elite Homes, kind of where you guys build, the markets, and who you're trying to [00:04:00] serve as buyers?

Darryl Stevenson: Yeah. Fantastic. Thanks. We started out as a single market builder. So, Arbor was a private builder, started in the mid-nineties, focused on just the Indianapolis market. Our founder, and still our president right, of Arbor, it all rolls up to today. He wanted to really start a builder that was focused on the entry-tier market. If you hear Curtis Rector is his name. If he tells the story, he had a business plan that he put together that said, you know, he never wanted to do, I can't remember the number, more than, I want to say it was a hundred or 150 homes a year max, ever, and I think in year two or something, he did 200 homes. So, there was a good niche. That's how they started. That was the origin.

Flash forward. Clayton Properties Group acquired a handful of private builders across the country. Arbor was fortunate enough to be one of those in 2018, and really a different approach. It wasn't a national and a public acquiring a public. They were primarily focused on the mobile and modular space and was looking for site builders and privately ran and owner-operated.

We were [00:05:00] fortunate enough to be part of that acquisition, and really from there, it became, okay, now what? We want to really help you guys scale the business. Flash forward now, Arbor Homes made an acquisition of Elite Homes in Louisville, Kentucky. We're one and it was a really great ancillary build-on. It wasn't a replacement of product. It was really a great culture fit for the organization as well as from a product fit.

So, that took us to our second market, and then organically Arbor has now started two more divisions launched in 2021 in Columbus, Ohio, Cincinnati, Ohio, and then Dayton rolls into one of those markets. So, we're a total of four divisions of the business. Now as you look at our portfolio, you've got the Arbor product line and so we're really targeting that first-time buyer, and in many instances, the second-time buyer because of where pricing and everything has gone.

And then we have a Silverthorne lineup of homes, which is really targeting a second and sometimes a third [00:06:00] buyer. We've got the Elite Homes that was purchased and that's really more of a luxury production build. So, we're production in every lineup of what we do. They're really targeting a second, many times, third-time, move-up buyer. And then we do have a couple of other product lines that are low maintenance. You know, your exterior is going to be included.

So, from the residential single-family home builder aspect, which is what we are, we really can cover everything from an entry tier up to a third-time luxury production, and then in many instances, the low maintenance, which that can be everything from a young family or single mom to young professional, who doesn't want to do yard work to, you know, your retiree.

Kevin Weitzel: So, you said something that's kind of intriguing. You said that or interesting, I should say. You said something along the lines of that Arbor was acquired by Clayton Properties Group, but then you're acquiring other builders. How's that functioning?

Darryl Stevenson: Yeah. It's been successful in many regards and challenging in many other regards. It's [00:07:00] great from the culture aspect. So, that's one of Arbors was one of their key targets in terms of the acquisition, as well as from Elite when those discussions started, but also for Clayton. It's gotta make sense from a cultural perspective. Culturally, it couldn't have been more of a home run. That has been fantastic.

The scale of now for Louisville, as an example, where you are just the market we're in, they were scaling their operations already without, and then you launch an Arbor product line in one, and then you merge and mesh. It creates its own set of operational challenges. It's went very well, but it's something that we, you know, have had to pay close attention to and monitor how you scale without, you know, losing some quality aspects and staying true to who you are at the core of the business.

Kevin Weitzel: And you're still keeping the names of the builders? You're not acquiring and then turning into Elite, but now it's Arbor Toledo or whatever?

Darryl Stevenson: Yeah, that's right. It's still Elite Homes. You can go to elitebuilthome.com. We're keeping the branding. It was not a [00:08:00] purchase and replace. We're not here to change your business. You've had success and this is a good fit, both from a cultural perspective, as well as from a product perspective.

Kevin Weitzel: So, from a digital aspect, how do you differentiate, is each company's marketing expertise and outreach, are all those campaigns siloed, or are you cross-referencing product with each other?

Darryl Stevenson: Yeah. So, you've got Arbor Homes. You've got Silverthorne Homes, which is a separate entity, but that was organically started by Arbor for that specific product. Now you have Elite Homes. So, they're all branded a little differently. We are looking now into the future, more towards a merged, you know, we are one company with these product lines is as opposed to brand, but they do offer their own expertise and own value add to those customer segments.

So, that's something that we're working with of not trying to change too much, especially on the Elite side. They've had success, especially that third-time luxury buyer when you're trying to market can [00:09:00] sometimes be different. We're trying not to change too much, but also at the same time, get more sophisticated in our marketing efforts.

Greg Bray: It's an interesting discussion when to single brand and have product lines versus multiple brands, and I don't know there's a right or wrong, There's pros and cons and you kind of got to pick one and go with it, but it's always an interesting balancing act. You know, sometimes you could save a little bit here if you could combine resources, but then do confuse the buyer with cause they only see one or not and don't think you do the other and some of those things. So, it's a tough decision.

Darryl Stevenson: Yeah. It's a tough decision and something that we grapple with. I mean, from a structure perspective, you know, there was some outsourcing done in terms of the acquisition on the Elite line that now we were able to bring in-house. You know, I'm focused on the Louisville division, but we do have the national marketing team in-house, so we get a lot of assistance where they're supporting divisions and product lines.

So, as an example, creative. You go back two years ago, we didn't have creative in-house, so [00:10:00] we've scaled and we're trying to build out to support markets, we now have some creative resources in-house, full-time that are supporting all divisions and all product lines. At the same time, we get now support from the Clayton team now, and we can get into what they really do, but we have more at our disposal, but it is a constant juggle of how much do you consolidate and streamline versus how much do you really need to be specific to that product and brand?

Greg Bray: So, tell us, then Darryl a little bit more about how your team is structured. What is in-house, what is outsourced How do you guys work together across divisions and some of those ideas?

Darryl Stevenson: Yeah, so we, like I mentioned just a second ago, we do have a national team that's mainly focused on the digital and creative side. That's at the national level supporting all of the divisions and all the product lines, and then the way we're structured now is we do have marketing managers, marketing coordinators in the divisions themselves. That's your boots on the ground, right? Those are going to be more of your product expert, your region experts on the ground. They'll report up, and obviously like every business, a lot of times, you know, [00:11:00] sales and marketing are together. My title, for example, I'm focused on Louisville, but we still do have, you know, a national team of marketing that's responsible for it all. A lot of that is in-house. We get some support from Clayton.

We do a lot in-house today, but what do we outsource as an example? We work with an organization that does our renderings, our interactive portions of our website, and things that we do there. We work with a company that's going to do a lot with our architectural integrations and that aspect of when buyers want more information at their disposal without having to come into a model home. You know, we're going to give a little bit of that info. We do some things from a customer portal perspective that we can talk about to give buyers more information at their fingertips than they may have historically gotten in the home building industry, and so we do outsource the build of that information and integration with our ERP, but a lot of the other stuff is kept in-house as we try to scale the business.

Kevin Weitzel: Do all the divisions utilize the same ERP? Just out of curiosity.

Darryl Stevenson: Great question. So, because [00:12:00] really now we're four divisions. All of them are organic except for the Louisville division, which it was a mix. It was a mesh of Elite and an organic Arbor. So, they had their own ERP system, Elite did, at purchase and we are in the process now of migrating into our ERP system, and we're about 65% of the way there, and the other 35%, which is a product line, should be done here in Q2.

Kevin Weitzel: It's not just a switch? There's no easy button?

Darryl Stevenson: Yeah. The stuff takes a little time, right?

Kevin Weitzel: What?

Darryl Stevenson: Two years.

Kevin Weitzel: Darryl, that's crazy talk.

Greg Bray: With being a company that's got a parent company of Clayton Properties, do you guys get an opportunity to share kind of ideas and best practices and what's working and what's not with some of their other builders, or are you guys pretty independent there from them?

Darryl Stevenson: It's good, bad, or indifferent depending on what your opinion is. Right? So, Clayton is extremely hands-off in that regard. So, if you are more of the mindset of, you know, I don't need to be told. That's great, but it is very much an info share. So, [00:13:00] everyone on the company that's strongly encouraged between other builders in the portfolio and there is a lot of that going on, in particular from the marketing realm and our national team does a lot of that.

The ERP that we use, as an example, some of the Clayton builders did use and many are moving to it. Not out of mandate, but because they see the benefit of operationally how to run the business and so there's a lot of knowledge share there. Our national marketing director, he's went around a lot and done discovery with experiences with other third parties, some of the toolsets we're using. In particular, we're doing a lot of marketing operations within the business right now, and integrations from system to system and that comes with its own hiccups, but when it's refined and done well, it leads to a lot of efficiencies, and so there's been a lot of knowledge share in that regard between the builder segments.

Greg Bray: So, when you look at the differences between kind of your divisions, especially your different buyer demographics that you're targeting, do you see differences in how digital reaches out or impacts different [00:14:00] segments as far as what they react to or what their engagement is?

Darryl Stevenson: Absolutely. Traditionally, that has not been a focus for many builders, right? That's an ancillary add-on expense, you know, viewed as overhead and we want to, minimize because it's tough to hit margin in home building. Now, fortunately for us, we are really leaning into that. So, we are a HubSpot business in the Arbor segment. We are migrating a lead-in and I know you're familiar with HubSpot and just the toolsets, just the visibility, and the data that, that shows you.

We weren't always in HubSpot, and we're trying to utilize that more and more because to your point Greg, different buyer segments are coming in through different avenues. Using the toolset correctly, where are you meeting that buyer? Where are they meeting you? Where can you double down and focus on your spend to not only drive lead gen and conversion, but Let the data tell you where you're having success and not having success, and that's something that we're really also trying to work through on our paid side, as well is [00:15:00] really refining those dollars.

Greg Bray: So, as you're looking at that data, have there been any surprises that just like oh, I never would have thought that this channel would have connected with this particular demographic?

Darryl Stevenson: Yeah, and it's something we're trying to get better at. I think some of the surprising things, you know, at least for us is early on in our company, a lot of builders they, not that they want to, but let's just throttle up. Let's just throw more budget at it and not, that's not always a bad thing, but when you really start to throw in, for example, let's go paid. Let's double our paid and see how it goes. If you utilize it correctly and you analyze the data, you may find that throwing money at it.

It's where you're putting money in the right place as opposed to just generally throwing money out there. So, so we've done a lot of things. We're getting a lot of returns on the paid side. Social, right, driving SEO content as well, and trying to drive up that organic side without necessarily having a spend, but really trying to scrutinize the spend side to make sure we're putting it in and we're allocating it [00:16:00] appropriately.

Greg Bray: So, tell us a little bit more then about how you see some of your buyers' expectations evolving over the last few years, especially as things have gone more digital?

Kevin Weitzel: Can I ask just a little subset on that same question? In your Louisville market, are you seeing the same sell-through growth as others in the country? Are you moving to, hey, it's not available to sell until it's completely constructed?

Darryl Stevenson: Yeah. That's a great question. So, I'll go Kevin, and then Greg. We are, and that's something we toyed with as a business as well. You know, especially when you're scaling out. You know, when you run a business a certain way in the market, even though it's only two hours away when you're starting up and there are differences market to market, both from operationally, especially trade base, right. Especially when you're trying to scale that out. So, we traditionally have been a to be built, sprinkled in with some specs and we still are.

Yes. [00:17:00] Expectations have now changed where it is a lot of education at the moment, and we're still seeing that, and I know that's been going on now for, a year and a half across the country in the builder segment. What we have found is it is really an expectation and education conversation with your buyers along the way because of what's going on in the world. You know, whether that's cycle times, you know, labor.

If you've been in the building industry, right, especially in the sales lens of, well, you know, it takes roughly this long to build a house. Here's a window of what to expect. Fifty percent of the time, that's not good enough anymore. Buyers expect more and some people, well, what do you mean? You just told them. No, they want education. Let's go online. You can get information at your fingertips in almost any industry. Why is home building any different?

We're seeing a lot of customers, more so than ever, the expectations are higher. In my opinion, the customer expectations being higher than ever aren't going down. It's only going to get higher and as an industry, we need to lean into that and embrace that.

In my opinion, it's not just the times. I think [00:18:00] there's some urgency behind it that's making that drive such as things going on internationally or a rising interest rate environment with what the Fed's doing to battle inflation or not buying as much mortgage-backed securities, but those things are all driving up urgency even faster. That urgency can come through the expectation side too, and they want to be more precise so they can make better decisions financially, even in the build process, right, with interest rates, and so, absolutely customer expectations are higher than ever. We're trying to be more sophisticated and there's a long way to go with that. We need to lean in.

Greg Bray: So, if you had one thing that you would want to do better in that area what would be top of your list that you wish, gosh, I wish I already had this blank available to me to help with that?

Darryl Stevenson: Yeah. A couple of segments. I think that one we're making progress in. So, one of the things that we do is a customer portal and so anyone who's going to listen to this at the company in Louisville is going to say, what customer portal? We haven't rolled it out in [00:19:00] Louisville yet.

Kevin Weitzel: Surprise.

Darryl Stevenson: Surprise, right, and it's not out yet. That's right. So, we have a customer portal in our Indianapolis division that it's milestones, you know, to make it simple, and this isn't anything revolutionary. Many builders have this, but many still don't. I always equate it to the Papa John's pizza tracker. When you order your pizza or a loan originator who has a portal, and it's kind of walking you through those milestones and letting you know where you want are. You know, at a high level, essentially, that's what it is, and so it's integrated with our ERP and it's going to give you some information.

I would like for that to become more sophisticated, be more accurate and there's some challenges there operationally why we can or can't do that, and so we really got to make sure that is teed up and functioning correctly well before you give a toolset such as that, but that's kind of during the build.

I kind of break it into three segments. So, you've got technology during the build and what's next. The second thing is education in terms of content before the build, and so, educating customers about the process we take for granted, right? We tell the sales team all the time, you walk in the [00:20:00] door, you do this every day. You think you know what the customer wants to know, but you don't. Don't assume they know the answer or they assume they know what's the next step in the process because while it's obvious to you, it may not always be obvious to them. Whether this is their first house or their fifth house, building is the same, but they have their tweaks.

So, content upfront prepares them for what to expect from the moment they hit our website before they even step foot in a model if they have to, or talk to an online sales counselor, and then the third piece is more back to the internal. So, we got technology early on during the build process from an operational perspective. Content from our digital on the front end, before they ever step in and engage, and then the third piece is really just more internal communication. Builders, especially as they scale, as we are seeing, you become more segmented. Sales getting good information from design, from the lenders, from operations in terms of where are we cycle timing on average, and so the better we can all mesh and [00:21:00] provide accurate information to our departments internally, the better we can lead to a great customer experience.

Greg Bray: I love that you mentioned the portal because we've been having some conversations with clients that. The sales are just falling in people's laps right now, or you can't meet the demand, and so there's this marketing department of, well, should we really be driving more leads to just queue things up even worse? So, there's been this kind of shift of how can marketing help manage expectations and communication during the building process, after the sale. You know, customer portal being an example of that. I think it's interesting to see marketing departments getting more involved in that area where I don't think they've always been, you know, included or focused. Is that a new focus for you guys or is that something you've been doing for a long time?

Darryl Stevenson: Yeah, no, it is a new focus. Customer portal on the operational front we started two to three years ago. Depending upon your business model as a builder, there's the spec build focus, and then with what's going on and [00:22:00] supply chain, when you're listing that house for sale, all the way to your traditional to be built, or picking a lot, and some builders go into even the to be built presale, right?

Depending on what your businesses KPIs are and operations, and so that's where we saw a big need is because when we were getting out and selling houses is really, hey, we may not be putting a shovel in the ground, you know, there's some stuff that has to be done. Well, what does that look like? What's next? You bring up a great point, Greg. Really that portal for us is fantastic from the contract signing through the process, in particular, it's the most effective from digging the house forward. We still now are refining our process twofold of what about contracted dig? How can we do better there because that's the black hole if you will?

Greg Bray: I signed the paper. Why isn't there a dirt flying?

Darryl Stevenson: That's right. And you can see it in your customer service, right? Depending upon how often your business does surveys with [00:23:00] customers. Whether you just do a traditional post-close, but you can see it if you survey your buyers, which we have at different phases of the build. You will see that it goes up here at contract signing and then there's this gap to construction of, I didn't really know what was going on. I don't understand. That's where we are focused on bettering that experience with toolsets.

And then to your point, Greg, in addition, it's what about buyers even when they can't sign prospects? They're coming to your website, and you can't sell today. Whatever system you have, whether that's a VIP interest list, lottery system, general marketing, how do we better educate and put in a better process to lead to a better customer experience, even presale.

Greg Bray: Well, Darryl, we appreciate how much time you spent with us and some great ideas and insights. Just a few more questions. What are you looking ahead to? You know, what's coming next that you guys are getting ready for now?

Darryl Stevenson: So, I'll answer this kind of two-fold and I love that question. [00:24:00] So, you guys, I believe know Chad Sanschagrin on Cannonball Moments. We are a customer, in our Louisville division, of Cannonball Moments and Chad and his team, and I love working with Chad. From the minute I got down here, we've been extremely happy. We use him on the customer service and some sales training with our sales reps, and he's launched a pilot program of construction as well from a customer service and we're happy. We were one of the first signups there with our construction team.

From the sales front, for me, it is making a better sales professional and one of Chad's things is the person, the individual. Let's focus on the individual person. Working outside of work. He correlates the two and he's right, strongly together that if they're happier outside of work, they're being better, they're probably gonna be a better employee. So, we're really focused on that.

On the sales side, it's really, especially as some of your members of the team and employees come into the market wherein, some bad habits can get created just out of the market, the [00:25:00] nature, and so we're really trying to focus on when the market softens, and it always does. It's cyclical in real estate, and so really being ready to focus on the customer that's across from you.

It's not so easy to just jump to the next one, and I'm not saying we are, but we're really trying to continue to refine that skill set of our sales team to really, it sounds cheesy, but you're an advisor. You're an advisor to the person across from you. You are not selling a product. You are selling yourself and you're selling a service and really home builders, I think if they would embrace that aspect. You don't manufacture anything you make for the majority of your production-built single-family residential home builders. You are a service of consolidating that together for a customer and you are creating an experience. So, really getting our team to lean into that and embrace that aspect of what we do. You're an advisor you're providing a service. You are not just selling the product.

Greg Bray: I love that. We're providing a service, not selling a product. That's great. Any last words of advice, Darryl, to our [00:26:00] audience today?

Darryl Stevenson: The marketing operations of what we've done and our team has done. That's not me. That is our national team with our boots on the ground folks. Marketing operations and integrations from system to system, everything from website to CRM to ERP to your digital spin, I would encourage everybody to explore that option if you haven't already. Not only if your business is scaling or not. Just the data insights and efficiencies that you can lead to for that has really been a great toolset for us. As you mentioned earlier, Greg, know your buyer segments and where they're coming from. That has allowed us to continue to focus of providing that great service that we just alluded to, to try to meet the customer where they want to be met.

Greg Bray: Well, Daryl, if people want to reach out and get in touch and connect with you, what's the best way for them to do so?

Darryl Stevenson: Yeah, email is probably the best way and I have a really fun name to spell, so it's always great giving out my email. My email address is Darryl, D A R R Y L first initial of my last name [00:27:00] S, darryls@yourarborhome, Y O U R A R B O R H O M E no s.com or yourarborhome.com.

Greg Bray: We'll put that in the show notes folks, so you can find it on the website, so.

Darryl Stevenson: That is great, and then also just LinkedIn, Darryl Stevenson, another great way to find me.

Greg Bray: Well, thanks Darryl so much for joining us today. We really appreciate you sharing and thank you everybody for listening to The Home Builder Digital Marketing Podcast.

I'm Greg Bray with Blue Tangerine

Kevin Weitzel: and I'm Kevin Weitzel with OutHouse. Thank you.