110 New Home Pricing Made Easy - Betsy Feldmann Apr 27 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 today we are excited to welcome to the show, Betsy Feldmann. Betsy is the President at First Story Marketing and the co-founder of Price Builder. Welcome, Betsy. Thanks for joining us today.

Betsy Feldmann: Thanks so much for having me love doing this.

Greg Bray: Well, Betsy, let's start off and help people get to know you a little bit better. Tell us just a little bit about yourself.

Betsy Feldmann: Okay, great. I've spent the past 17 years running First Story Marketing, which is a new [00:01:00] home marketing agency in Denver, Colorado, with my husband Mark. In 2020, we created the Price Builder platform, actually with my brother and his business partner who are in California. They have a couple of other subscription software platforms, so we partnered with them on this new business.

Kevin Weitzel: All right. That's the business side though. Now we need to know something personal, something that people will only learn about you on this podcast.

Betsy Feldmann: Well, I'm a mom, so I don't really get to do anything for myself, right, like a drive around. No, let me think. You know, I don't think that everyone knows about my faith and how important that is to me, and I guess, you know, that translates to business even though it's personal too, that translates to business cause it just, for us business is really about relationships and helping the people around us to be successful more so than anything else. Does that work?

Kevin Weitzel: Absolutely.

Betsy Feldmann: Is that personal enough?

Kevin Weitzel: It's your podcast. Everything works.

Betsy Feldmann: Okay.

Greg Bray: Oh, it doesn't get [00:02:00] more personal than faith, right?

Betsy Feldmann: Exactly.

Greg Bray: For sure. Well, Betsy, tell us a little bit more about your journey into what got you to work in marketing with home builders, and then how did that lead into Price Builder?

Betsy Feldmann: Yeah. Perfect. So, I actually got a degree in public relations. Didn't know what it was, sounded fun, and then when I got out, I got a job. I actually started a nonprofit marketing. My dad was a builder and developer, so I grew up around new homes, you know, visiting models on vacation, that kind of thing, and so at some point he said, you know, you should really consider getting into new home marketing.

 I got a job with Dave Miles at Miles Brand, was there for several years. Learned a ton. It was a great introduction, and then, in 2005, I started really seeing a need for a smaller, kind of more hands-on marketing agency and so I started First Story at that point in time.

Obviously, what we're going to talk about is Price Builder. We created that. It's kind of our COVID project. We started sort of doing [00:03:00] some research into some things ahead of COVID, but at that point, we found ourselves with more time and so we created something new.

Greg Bray: All right. Well, we can't just say you created something new without, what is it? Okay, so tell us what is Price Builder? What is it doing in the world and what challenges is it addressing?

Betsy Feldmann: Yeah, no problem. So, simply, Price Builder, it's a subscription platform. It deploys from anywhere on a builder's website. It is super mobile-friendly, and what it does is it allows home shoppers to virtually build and price a new home online. So, the shopper can start with a builder's plan. They can add different plan options. They can choose a home site. They can choose an exterior elevation, a finish level, even landscaping if a builder wants to set it up that way.

As the user is selecting different components, the overall price of the home is updating in real-time, along with [00:04:00] monthly payment. One of the things that's really cool about the payment side of things is that it includes not only principal and interest, but also tax, insurance, and HOA.

So, as the shopper's going through the selections, they have a really good understanding of what that home is actually going to cost them, and then once they get to the end and they have, you know, the home configured, they can choose to have a summary of that configured home emailed to them.

At that point, that same summary goes to the builder's sales representative. So, at that point the shopper is qualified, they're through the shopping funnel really quickly, and the sales staff knows exactly what that buyer is looking for. So, it's a much more qualified buyer. It's faster and easier for both the sales team and for the home shopper.

Kevin Weitzel: Now, do you ever let the builder decide that they can start with the like landscaping package? Cause I highly recommend don't doing that because that will literally knock me out of the running for buying any [00:05:00] home if I have to select the landscape ahead of time. The budget for landscaping is insane. It's crazy.

Betsy Feldmann: Yes, it is. So, really the system is pretty customizable to what builders want to allow people to select from. So, I mean, yeah, theoretically, could they do landscaping first? Yes. Would we suggest it? Definitely not.

Kevin Weitzel: Definitely wouldn't. Definitely wouldn't.

Betsy Feldmann: But yeah, one of the builders that's using the system is pretty high end, semi-custom, and so, you know, they have outdoor living options and different garage size options, and so the system, you know, a lot of different kinds of ways that builders would approach that process.

Greg Bray: So, when you guys were envisioning this before you actually started putting it together, what made you decide that focusing on that pricing piece of the whole buyer experience was something that was missing out there in the market?

Betsy Feldmann: Yeah. So, it's interesting because the question started lingering in our minds. We [00:06:00] had a builder who their base prices were, I think they were advertising from the maybe mid-four hundreds and their completed homes were in the low six hundreds. It was a new community and we didn't know yet what the completed home prices were.

They did, we didn't, and so we're sitting in a meeting and they're talking about, we're getting a lot of traffic to our sales office, but we're just not converting that traffic to sales, and so that's when we started, you know, asking questions and realized that there was such a big gap between the from pricing and the actual price. So, what was happening is that the traffic wasn't qualified traffic. They weren't getting the right people.

So, around the same time, the Zillow new construction housing report came out. It was the 2019 version that came out, I think maybe early 2020. One of the statistics in that report, which wass fairly stunning to us, was that 64% of home shoppers go into the shopping process open to both new and resale [00:07:00] homes, but only 9% of buyers actually are choosing new. So, for us, we really were like, okay, you know, initially for our own clients, we were trying to figure out where the shoppers were getting lost and how to reduce that loss of buyers.

We honestly just started like a kind of massive new home online shop, where we sort of put ourselves into the place of home shoppers and literally went through the entire process from Zillow all the way through, and what we found was really that buying a new home and shopping for one, especially when you're talking about like a build from scratch versus a spec home, is immensely difficult. We did, you know, additional research, secondary and primary, and it all confirmed the same thing that this whole thing is really difficult, and for shoppers to not be able to know what the price of the home is.

I mean, budget is a big deal for people, [00:08:00] and so to assume that somebody is going to get in their car or get on the phone and go through that much effort to try to figure out just the basic information about a new home, we just realized wasn't realistic. So, we really knew that what Price Builder did would solve the problem that the home shopper was having, but really initially what it would do for a builder's business was sort of a theory.

Now, we've got about a year of statistics from builders using the system, and what we've seen, honestly, is more than what we even thought we would see. So, of the builders using the system, when a web user or web visitor's given the opportunity to build in price at home, 30% of them are doing it which is pretty high. Once those web visitors are into the Price Builder system, over 5% are converting to sales leads. So, I mean, that's a pretty high conversion ratio, and when you take all of those leads that are [00:09:00] coming in from Price Builder, it increased the builder's overall website conversion by 46%, which is pretty stunning actually. It's a huge increase in conversion.

Builders right now, I mean, you know, the cost issues are really important with costs going up. Trying to protect their bottom line and their profitability, everything that a builder can do to help protect their spend is important. So, if you can you know, increase your conversion, that allows you to potentially reduce some of your marketing budget. The other thing that was really interesting to us over that first year is that 25% of all the builders' buyers, and this is on average, we're sourced to Price Builder leads. So, one out of every four had configured a home online before they purchased.

Greg Bray: That was a lot of numbers, Betsy.

Betsy Feldmann: I know, I'm sorry.

Greg Bray: No. No. It's good

Betsy Feldmann: I love the stats. I'm a nerd.

Greg Bray: It's good because they all sound like they're going in the right direction, right, but if I had to take the core [00:10:00] of what I'm hearing you say is that buyers want the data. Buyers want to know what the thing's going to cost. Why is this shocking to us that buyers want to know what it's going to cost? You know, I don't know. Sometimes we seem scared of that in this industry.

Kevin Weitzel: Then also on top of that, just to kind of, build on that it's that when you're buying a home, what is one of the first steps in addition to looking for, you know, the community and the area that you want to live in? It's getting pre-qualified. So, if you're getting pre-qualified, you know that you can shop a 400, 450, $500,000 home, and that other build with you mentioned is typically hitting that 600 plus mark. You just eliminated them mid-process, even after they've chosen to buy from you. So, that transparency can get rid of that problematic aspect of a disqualification, midstream disqualification.

Betsy Feldmann: Yeah, exactly. You want to make sure that your salespeople, the builder salespeople, are getting the best, truly qualified, close to [00:11:00] purchase, ready leads. I think most salespeople would say they'd rather have five fantastic leads than 40 that they're trying to sift through and figure out who can really buy the house and who can't.

Kevin Weitzel: Totally curious and off the wall question here, but have you noticed any correlation from builder to builder of your Price Builder clients in their starting price point versus finished price point, if there's a ratio of what that average number is, or where's the sweet spot that you're finding, or is that even something you guys are keeping track of?

Betsy Feldmann: The ones that are using it are all very different, so there isn't a common theme. What we have heard from several is that the price that the shoppers are getting with Price Builder is super close to what they're contracting at, which is pretty cool cause it's very high level. We're not giving people, you know, the choice of picking specific countertops and where the light switches are going to go, and not that level of detail. The goal is really [00:12:00] to give people a simple way to pre-qualify themselves.

So, for instance, that one real high end, it's semi-custom but it's close to custom builder that's using it, they had somebody that did the Price Builder system and it was probably a one and a half million dollar home, and they were within $30,000 of their contract price. So, that's pretty cool. It's pretty accurate. So, people are getting a really good idea of what they're going to get.

Greg Bray: So, I think that ties into kind of the next question that came to mind for me is how detailed does the pricing get because I think one of the pushbacks that, at least I hear from builders about putting pricing on there, is the pricing is complicated. There's so many choices. There's so many different directions. We can't just put that on a website because there's too many questions to ask to get there from that starting price to that finished price. So, what you guys are doing is not trying to answer every single little choice. So, how do you kind of balance that [00:13:00] in what you present versus what could happen in the actual design center process and the final contract process?

Betsy Feldmann: Right. So, each builder, they can set up the system how they want to. It's pretty flexible, but the way that we really recommend doing it is if you're talking about floor plan options, for instance, instead of doing every fireplace and art niche and, you know, those kinds of details that wouldn't be big expenses, we suggest doing the things that are going to change how that home lives.

So, if it's adding a sunroom that would change how the home lives. If It's, you know, switching a study to a bedroom, adding a bathroom, those kinds of things. So, keeping it high level on the items that would actually, you know, add significant cost and also change the way the house lives.

As far as interior finishes, you know, some builders are doing packages and I guess that makes it fairly easy cause they can say, these are the four packages available. The builders that aren't doing that, what we have found works really well is to [00:14:00] do the highest level package. So, that would be like, what they see in the model home.

If you went to the design center and you upgraded everything, that's what it would be, and then what the lowest level would be. So, if that/s standard and it's, you know, $0, then that's what somebody could do, and then give a couple of levels in between with some photos to give people an idea because I think most people know, I want over the top finishes or I just really want base because I want to just get into the house, or I'm somewhere in between. We really suggest, you know, giving people a quick way to say, okay, here's probably where I would be in order to get the price, and then they go, you know, and do the design center and all that stuff face-to-face, person-to-person.

Greg Bray: So, this is really about helping somebody walk in with an accurate idea, but not with them being done, having picked everything they need to pick.

Betsy Feldmann: This is a very complicated process, right, like, new homes, and when somebody is designing one and doing one from [00:15:00] scratch with the builder, even if that builder offers very minimal options, there's still a lot of pieces and components to it.

You know, obviously, there's a lot of talk around buy now, which Greg you've had a lot of conversations around buy now, but we feel like there's a step before that and that's arming people with the information that they need, and the detail that it takes to get to a presale home purchase, we just feel like it's too much online and maybe some people will do that, and maybe it'll get simpler, but we feel like that's really a place where the salesperson is important to walk someone through what all of that actually is.

Greg Bray: So, do you find that there are some builders who are interested, but just can't get the data together to kind of make something like this work, that it's too scattered as far as where their information comes from?

Betsy Feldmann: Yes, but once we talk through it and we, you know, we really will work with builders. I mean, we have a lot of [00:16:00] experience with just working with builders. I mean, we can talk them through here's the best way to set up the platform for you, and here's the data that's really important, and here's the things that you could eliminate.

So, a lot of it's, just content development really, and we can provide some of those services if there's builders that don't have the ability to do some of the components. We can connect them to an outhouse to help them develop renderings or whatever else they need. For some, it's stuff they already have, for some, it takes some time to pull it together, but if you're going to increase your online conversion by 42%, it's probably worth putting some time and effort into generating that content.

Kevin Weitzel: With the Price Builder platform, are you tying to their ERP or you having manual input or both?

Betsy Feldmann: So, right now it's been mostly manual. We haven't had somebody come to us that wants to connect to their ERP. If we did, we would look at doing that. One of [00:17:00] the things that we've been looking at is taking a Zillow feed because a lot of that content, you know, maybe I think we looked at it, it's probably 65 to 70% of the content could be pulled right out of their Zillow feed.

Greg Bray: So, Betsy, as you are seeing buyers react positively to this based on the numbers that you're sharing with us it sounds like increase conversions, increase engagement with the website. Are the builders recognizing that or are you having to kind of say, hey, no, this is because you're doing this, or are they easily seeing the connection between those numbers and the source?

Betsy Feldmann: The builders that are using it, love it. In fact, one of them has changed a lot of their processes. They're trying to get everybody to go through the Price Builder system right off the bat. It's interesting because a couple of the builders were like, we're not sure about our salespeople, how they're going to feel about it, and at first, you know, the salespeople are a little, I don't know, maybe hesitant. Not all, some, but the salespeople are the ones that are the biggest fans [00:18:00] because they know when they get that Price Builder lead, it's an actual strong potential to buy versus somebody who's just asking a question online or filling out a form, doing a chat, whatever. So, yeah, the salespeople are the biggest fans, and so we're hearing that same anecdotal feedback from the builders that we're seeing from the statistics.

Greg Bray: How does it tie into kind of an online sales counselor's role? Do you have the ability for them to guide somebody through the process if they have questions midstream or where do they fit?

Betsy Feldmann: No, that's a great question. So, one of the things that we would like to add to the platform, or we're looking to add, you know, we're always looking at modifications and additions but is if a builder has the chat functionality, adding that into the platforms so they can ask questions real-time, as they're working through their pricing.

Right now, most builders that are using it, if they have an online salesperson, it sorta depends. Some of them have that lead sent to the online salesperson. Some of them have that lead sent directly to [00:19:00] the community salesperson because at that point they're pretty far down the funnel, but we haven't had any issues with online salespeople feeling like it's infringing on their territory, so to speak. So, it seems to us like the OSCs are enjoying it and using it as much as anybody else.

Kevin Weitzel: You would almost think that it OSC would drive traffic to it for people that maybe don't find it right away.

Betsy Feldmann: The OSCs that we've talked to, a lot of the questions they get are, you know, what's the tax rate, what's the HOA, how much is it going to cost If I want to switch out that study to a bedroom and add a bathroom? I mean, those are a lot of the questions that they get initially, and so, yeah, I'm sure that some of them are. It's actually an interesting question that we'll have to reach out and find out if that's what they're doing because it would make a lot of sense.

Greg Bray: So, as you look at tools like this, and you alluded to the buy online where what you're doing is not trying to push to finish the purchase. It's more about educating the buyer in a whole nother level of what drives some of the [00:20:00] costs. Do you have any concerns or fears about this process just becoming too transactional and we lose some of that human touch or guidance that people need as these tools evolve into the future?

Betsy Feldmann: Yeah. So, I mean, honestly, that is kind of our concern about the buy online. It's a complicated process. We really see in the future, the sales role transitioning somewhat from selling to really becoming a concierge or a guide to the new home process where that person is really walking with you through the whole process of selections, and the contract, and the build, and the closing and the warranty.

We feel strongly that it's a big product. It's a complex product. It's the most important purchase that people will make and that still requires a human to human interaction. There's just a lot of things that can't be easily [00:21:00] explained through technology that can be easily explained face-to-face. That's our position.

I know everybody thinks about that differently and maybe at some point, it will become more, new homes especially, build from scratch. That's really easy to do online, but it's hard for me to get my head around that. You know, we understand it, right? Like, I understand new homes. I understand the process and I would have a hard time doing it all online.

Greg Bray: And I think I agree with you. I think there's a place for putting parts of the transaction and letting people do them at home on their computer, but the idea that it's all unassisted and I've never had any type of human interaction, I don't see that anytime in the near future either.

I love Betsy, though, the idea that you are actually creating data that shows that buyers want this information, and really showing that they're engaging with it and reacting to it, and it's not so complicated that we can't give it to [00:22:00] them. Again, this idea that there's just too much. I can't put it out there. You know, there is a way to get them closer if you're getting them within, you know, 10% of what the final contract price ends up being, that's pretty good.

Betsy Feldmann: You know, everything within the system is designed to say and show this is a price estimate. This is a way to get information. You know, it's not designed to where you walk in with your summary and you buy that house like that. There's a lot of conversation that will happen around it, but it gets people much faster through the funnel and it keeps them. I mean, what we really saw is resale homes are easy, right? You can see the photos. There's some virtual tour. You know exactly how much it's going to cost. At least you used to. Now, you have no idea how high the price is going to go, but that's a simple process.

When you go to a builder's website and there's all these plans and there's, you know, an interactive lot map. So, you could see the lots, but you can't tell how much that's going to be, and it's like a from price. It's just very complex, [00:23:00] and so, yeah, just simplifying it for people we really think will help. Not even competing builder against builder, but I mean really every builder is competing against resale homes and whether they acknowledge that or not, that's just the truth, and so if we can convert one more percent of that huge percentage we're losing. That's a big deal. So, that's what we're looking at, is solving that problem and making it simple.

Greg Bray: I agree that idea that the resales are the top competitor changes a lot about how you look at some of the things we do in this industry, as opposed to the builder down the street being my top competitor.

Kevin Weitzel: It's crazy that existing homes are the major competitor to new builds. I mean, there's no meter out there that you can buy that measures how much dead skin is in this used home. Not to get disgusting, or just the amounts of just funk that's in the carpet or the cigarette smoke that's in the paint. Ew, gross. [00:24:00]

Betsy Feldmann: So, the saddest story that we heard as we were researching before we created Price Builder was a couple that we talked to and they had found a new home that they loved. They had gone through the whole process. They had a contract price, but they had not yet gone into selections, and the husband just said, I was so worried that I was going to have to let my wife down because I didn't know how much this house was actually going to cost and we're contracting and I still don't know how much I'm actually going to spend and I just felt so uncomfortable with it that we ended up buying a resale. It was a house we didn't want. We wanted the new home.

That was for us when the light really went on and was like, this is a huge problem and who would choose a resale over a new home? I mean, really. I think most people would really like to have the new home that they can pick everything. They can have the plan be exactly what they want versus trying to reconfigure things. So. [00:25:00] Yeah, I agree with you. I mean, I think there's so many advantages to new and so we're just trying to make that easy.

Greg Bray: Well, Betsy, we appreciate your sharing with us today. Just a couple more questions. What are some places that you recommend builders go to to get new information about what's coming and new ideas to help them?

Betsy Feldmann: You know, one of the funny things that we learned when we were researching again, is that, and probably not many people know this, but our industry or kind of construction as a whole, is only ahead of government and hunting and fishing as far as adoption of new technologies.

Kevin Weitzel: No.

Betsy Feldmann: It's true.

Greg Bray: Are you sure we're ahead of government?

Betsy Feldmann: Some days maybe not. So, anyway, I think all that is to say, we can learn from every industry. We can learn a lot from the auto industry. We can learn from retail and how they're connecting you know, their brick and mortar to their online experience.

Honestly, I think we can learn a ton from our own behavior online. You know, how we research when we're [00:26:00] looking to buy a product, you know, what that whole process looks like. We encourage people to shop themselves. Pretend that you know nothing and go to Zillow and walk through that experience and just see what it's like.

Customer experience is really just about removing the friction points, saving people time, making things easy. The way to do that is really just to experience it yourself. My husband and I talk a lot about how marketing really isn't rocket science, and it really isn't. A lot of it's just putting yourself in the shoes of your shopper. What is that like for them? How do we make it better? How do we make it easier?

Greg Bray: Great insight. Any last pieces of advice, Betsy, that you didn't get a chance to touch on that you wanted to share today?

Betsy Feldmann: Just look at all your processes and think about how time for most people, it's their most important asset. So, how do you save them time? How do you make it easy? I think the builders that are doing that are gonna really win a lot of market share in the coming years.

Kevin Weitzel: For somebody wanting to find [00:27:00] out more about Price Builder, do they need to know how to spell the word builder?

Betsy Feldmann: No we've used the abbreviation.

Kevin Weitzel: Oh. Oh.

Betsy Feldmann: So, it's Price B L D R.com is the website

Greg Bray: We'll definitely put a link to that in the show notes for everybody.

Betsy Feldmann: Awesome. Thanks, and then you could connect with me to Betsy Feldman on LinkedIn. Love to do that.

Greg Bray: And that's Feldmann with two N's on the end of it.

Betsy Feldmann: It is. It's two N's.

Kevin Weitzel: You went more N's, but less letters in builder?

Betsy Feldmann: Yes. I know. See. We had to save somewhere for the extra

Greg Bray: N.

It's all about finding the domain names these days, right?

Betsy Feldmann: It is.

Greg Bray: We name our companies based on what domain names are available, so.

Betsy Feldmann: It's true. It's a whole new world.

Greg Bray: That's right. Well, Betsy, thank you so much for joining us today, 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.