48 Willingness to Change Your Paradigm - Carl Baker Feb 17 2021

[00:00:00] Greg Bray: Welcome everybody to another episode of the Home Builder Digital Marketing Pgodcast. I'm Greg Bray with Blue Tangerine

Kevin Weitzel: I'm Kevin Weitzel with Outhouse.

Greg Bray: And we are excited today to welcome to the show. Carl Baker, the sales manager at Presidio Homes. Welcome Carl. Thanks for joining us.

Carl Baker: Hey, thanks for having me with you guys.

Greg Bray: We're really appreciative of your time today and look forward to getting to know you better and a little bit more about your city of home. So why don't you start off and just kind of give us that quick introduction and tell us a little bit more who's Carl.

Carl Baker: Yeah. So I've been in sales for almost 20 years.

It kind of pains me to say that out loud, I guess, and I've been in the home building industry for just over three years now. I'm married and have five kids. I live in Eagle, Idaho, and I love, love Idaho. I mean the skiing here is great. The rivers are great, the lakes are great, so we spend a lot of time outdoors.

Just trying to [00:01:00] enjoy everything that Idaho and Boise has to offer.

Kevin Weitzel: Awesome. Well, that's the business use. So how, what brought you to the home building industry? And before you answer that one, we have to know one secret about Carl, something that nobody else knows unless they listen to this podcast.

Carl Baker: So, the secret about Carl that the most people listening to this probably don't know is that I owned a trampoline park for about two and a half years prior to moving back to Boise to take this job really.

Greg Bray: Okay. I got a question about trampoline parks. What does the liability insurance bill look like?

Carl Baker: Yeah, that's a good question. That's a good question it was about 10,000 bucks a month.

Greg Bray: Yeah. I just always wondered about that.

Carl Baker: Just like, the annual [00:02:00] premium, and you look at it and you think, okay, I could pay for this or I could buy a really nice car.

Really, really nice car. Yeah. Really nice car.  

Greg Bray: I've just always wondered that, so now I got my chance.

Carl Baker:  So trampoline parks are an interesting industry because like, once you cover your fixed costs, like it's all gravy after that. And like the fixed costs are obviously the insurance is a big one.

Rent is normally pretty big and then personnel, but once you've covered that, like it it's a money printing machine, so it was fine. It was a lot of fun and we lived really close to it. Literally my kids went every day and, you know, I had a five-year-old at the time and you know, he's doing backflips and double front [00:03:00] flips.

So it was a lot of fun for them. They were really sad to move and when we moved, they asked me slash begged me if we would be doing another trampoline park.

Greg Bray:  So now when the wife says, honey, the kids are bouncing off the walls again, it just means something different for you, I guess.

Carl Baker: Yeah.

Kevin Weitzel: So what drug you over to the dark side of home building?

Carl Baker: So I've been in sales, like I said, my whole life. I've been an entrepreneur as well, so you know, a lot of entrepreneurial things after I graduated in 2007,  I got a degree from BYU in accounting, and there really wasn't a whole lot of jobs at the time.

So [00:04:00] I, during college, I had spent a couple summers selling home security systems. So I thought, Hey, you know what, not a whole lot of jobs available right now. I'll just go work and continue to do that. I mean, there was a lot of money in it. So, I did that. I moved to Arizona, spent some time there.

I ended up starting my own company and we did a lot of like B2B sales and then B2C sales. We kind of expanded outside of the home security stuff and did a lot of camera where access control, low-voltage you name it? We did that for about seven years, then got kind of tired of it.

We eventually sold that business in 2016. Part of getting tired of it, we started the trampoline park. So me and a couple of [00:05:00] friends in 2015 started the trampoline park. Then yeah, sold the security company in 2016. and in end of 2017 found out about this position that Tricity was hiring, I interviewed for it and got the job. So it was, it was a pretty big blessing. So I mentioned Arizona, we only spent a few years in Arizona. We moved to New Mexico, spent about eight or nine years there and it was a tough move. Like we had a lot of really good friends and all of our kids had really good friends.

Mexico is one of those places where nobody really has family. So like the people that you associate with are your neighbors and people you go to church with, so we had a lot of really good friends, so that was a tough move for us coming here. I feel, [00:06:00] we feel really blessed that we did that.

I mean, because of all the stuff that Boise has to offer, we had a lot of family here as well. So all in all, it's been a really good change for us.

Greg Bray: So Carl, tell us a little bit more about Tresidio Homes. What types of homes do you guys build? Who is your target market and kind of what area do you cover?

Carl Baker: Yeah, so, we build in the Treasure Valley, which is basically ADA County and Canyon County. Like I said, previously, we build a smaller, nicer home. Our target demographic is empty nesters, first time move up. So it's a smaller, nicer home. We're not building like the 4,000 square foot or even 3,500 square foot homes.

We're mostly single story or single with bonus. If I had to guess, I'd say 95% of our homes are in the single bonus category. [00:07:00] Last year we started 150 homes this year, we are tracking to do 180 starts on the single family side and then 50 multi-family. so kind of a big jump in production this year.

Kevin Weitzel: Multi-family like a connected townhouse or condos or...

Carl Baker: Yeah. Good, good question. So, yeah, townhomes not condos, we might get into condos someday. Condos are a little trickier because, as you guys know, they stack on top of each other, so the permitting is different.

Like, it's a totally different animal. It is a different beast. Yeah, so townhomes for now. We've got a project that's about 74 townhomes that we're going to be doing. We want to kind of learn with that one and then grow that side of the business.

Greg Bray: So Carl, tell us a [00:08:00] little bit about how you guys approach your marketing team and kind of how you've set that up. You know, do you have some geography assignments? Do you have different. tasks and are you doing it all by yourself? 

Carl Baker: That's a good question.

Yeah, so we have so for years we did it all in house. We had a marketing specialist that kind of just did everything for us, and recently we are having gauged, third-party ad agency. I'm sure you guys are familiar with Group Two, so we actually just had our kickoff call yesterday with them.

So, they're going to be doing a lot of stuff for us and we recently just hired a marketing coordinator. So the marketing coordinator is going to be handling kind of all the boots on the [00:09:00] ground stuff. You know, scheduling photos, scheduling, staging, updating the website, updating Zillow, updating third party websites and stuff like that.

So we've grown to the size that we are without really having to spend much money. Zillow's really the only paid advertising that we have done over the last five, 10 years. Now really we feel like we need somebody to teach us all the things that we don't know about marketing a home building company, which I feel like is probably pretty vast.

You know, just from being on that call yesterday with Group Two, it was pretty eyeopening, the stuff that they were talking about and what they're going to be doing. [00:10:00] So I I'm excited about that. Hopefully we can, you know, use that to our advantage,

Greg Bray: Well, they do great work.

We're good friends with them and I'm sure that you're going to learn a lot along the way. Tell me just a little bit about kind of the process you went through and evaluating agencies and how you kind of made that decision.

Carl Baker: Yeah. So there's two agencies that we evaluated, we kind of had a moment in time.

Our previous marketing specialist left in September, so we had kind of this moment in time where it's like, okay, what do we want our marketing department to look like in five years. Right. So we tried to project out into the future what we wanted that to look like, what we wanted our marketing in general to look like.

We decided [00:11:00] that it was probably time to bring on a third party ad agency. So we looked at a couple of them, and it was really interesting, kind of the philosophies that they were completely different between the ad agencies that we looked at. I guess I assumed that they would be the same when we engage both of them.

So we kind of had to sit down with them and were like, so I was talking to Matt Riley and I said, Hey, Matt, this is what we need. We need somebody super good at social media, super good cause we needed to a hire a new person. So I was trying to like get some ideas for what we were looking for.

We need somebody really good at social. When you find somebody really good at video that can take video, edit and post, we need somebody really good at Google analytics. We need somebody really good at SEO. There's a couple other things that I've mentioned and he's like, okay, that [00:12:00] sounds really great, Carl.

When you find that person, let me know, because that's a huge unicorn, and they don't exist. So I kind of had this moment in time where it was like, yeah, he's probably right. He's like, Carl, we have over 20 people at our company and six different departments. Each department specializes in one of those things that you just mentioned, and he's like, it's almost impossible for somebody to be really good at all those things.

So that was for me, like a moment in time where I was like, yeah, that's what we need. So like the other ad agency that we approached, they said, You know, we're going to train you to do all these things or train the person that you hired to do all those things.

 I think that's, you know, I think that could happen. but I think it [00:13:00] would take years and years and years and years. And I think you also have to find the right person. You know, kind of a sponge and has a very high aptitude for that kind of stuff. We didn't like the hiring process.

Like we didn't want to spend a ton of money on, getting that right person. and so we went with Group Two and they're going to handle all of that stuff. So the person that we hired, for our marketing positions, is very entry level. They're just going to be kind of boots on the ground. You know, we're going to meet with Group Two every two weeks, and they're just going to kind of line us out on all the things that we need to do and kind of give us a list.

I think over time, the marketing coordinator is going to be able to learn a lot of the stuff like, you know, a lot of the stuff that Group Two is telling them to do. I think it's going to become second nature. They're going to [00:14:00] learn, and I think eventually over time, we're going to be able to start maybe pulling some of that stuff back from Group Two.

Really that's kind of where we landed.

Kevin Weitzel: What's interesting is a couple of points. That the other company we'll just call it the other guys, right? They're not taking into account turnover. So what do you have to do? You have to start the whole process of training somebody all over again.

If that person doesn't work out a year and a half from now, when they move, decide to move to Mexico and open up a trampoline park.

Right. And that's the challenging thing too, right? Like you hire this person, you give them, the best training on the planet, and you know, maybe in 18 months or two years, they're like, wow, I've learned a lot and now I'm worth a lot.

So I'm going to go to builder XYZ and get paid a whole ton more, and I'm going to teach them all this stuff that I've learned. That's the scary thing, definitely, but that's a risk, no matter what you do. You want some that are talented to get the job done. but you also [00:15:00] have to treat them well enough to where they want to stay.

You know, I really think it's a balance.

The other guys, were they in the home building sector or were they out, did they cause the Group Two is exclusively in the home-building sector. So I'm curious if that other company was also in that sector because I see home builders do that a lot where they're like, well, let me go to this completely competent company that builds exclusively in the home building industry.

Then let me check these other two or three companies that are just toying around with this market and maybe don't even know the nuances and the problems that we have.

Carl Baker: Yeah, that's a good question. So the other company is in home building very well known. We, in fact did some training with them back in, I think October, our online sales consultant did training with them, like a big, huge workshop with them.

So I'm very impressed with their training. I've got nothing [00:16:00] but good things to say about them and their training. I think really what it came down to was, the difference of philosophies. I really feel like what we were looking for, kind of matched what Group Two was offering.

I think definitely what they have is a really good operation. I think that works for some builders that have kind of, you know, maybe your marketing manager position and maybe a marketing specialist and a couple people under the marketing manager. I think the other company would be a very good fit for that type of company where with us, you know, really we're kind of starting over again.

And so I think Group Two is just kind of a better fit.

Kevin Weitzel: That makes sense.

Greg Bray: Well, I, a couple of thoughts when I was listening to you, Carl, the first one, I heard this quote somewhere, I can't give proper attribution, but [00:17:00] some CEOs, talking about training and the people say, what if we train all our people?

And then they leave, right. The CEO's responses, what if we don't train them and they stay right. So there's always that right. I think you've hit on something, you called it kind of an aha moment for you. This idea that what you really need is not one person with 10 skills, but you need 10 people and you need 10% of each of them to be able to get everything done because there's so many specialties in marketing today. There's so many, you're talking about social media versus video and those are, you know different skill sets, different tasks.

It's not that somebody couldn't learn both, but there's only so many hours in the day to learn it, and the same thing kind of comes up when you get into all types of digital things. Whether that's paid search, SEO or web development, you know, even our development team back when I started, it was kind of one person could do it all. I [00:18:00] can't do it all. We got to have designers and database people and programmers, and it's all different skills.

So that really comes once you get to a certain size and it makes sense to have some of that in house.

Carl Baker: Yeah. I mean, they're definitely different sides of the brain like Google analytics versus being able to look at a piece of print. Like, okay, that looks good.

And knowing maybe that's a little off, let's tweak this to make the image look better. Comparing that to like somebody that's very analytical and understands the the side of marketing. It's two different people completely.

Greg Bray: Yeah, definitely. So Carl, I'm interested to get your thoughts on some of the things.

When you look at your pre homebuilding experience and some of the sales things that you did there, how does that compare with selling homes? Is it all just sales or are some key nuances that you've discovered in that are different?

Carl Baker: That's a really good [00:19:00] question. So, sales is sales first off.

I think I would say when I started with Tresidio one of my very first weeks, they took me to the International Builders Show and I spent basically three days in what they call Sales Central, listening to Myers Barnes. And I can't even remember the names of anybody else, but people that were really good, Quintin Lears and I'm trying to remember the other people, anyways, listening to these people cause I thought, selling homes, you know, there's probably going to be some differences. I guess what I was shocked about was that everything I learned that week in selling homes [00:20:00] was almost identical to selling the other things that I've sold in my life.

There was so much crossover, I mean, not so much like the one-liners, but the psychology of it and engaging the client and selling homes is a lot, is almost like a B2B sale. You know, you present the product and then they think about it and then like, they'll come back and it's not like a bartering, but it's a longer sales cycle, especially like if they're starting to make modifications to the home structurally and you got to engage your architect. It's just a little bit longer sales cycle than I was used to, but, from like a B2C sale, the B2B sales that I did prior to home building, [00:21:00] fell right in line. The sales cycle was about the same size, the modifications that people would make the customizability.

So, yeah, I think sales is sales. There's definitely differences with this, with selling homes than some of the other stuff I've sold. But, for the most part, I feel like the knowledge is very transferable.

Kevin Weitzel: You'd mentioned just the variation of different markets and stuff with the COVID fight is what some of the people are referring to it with people relocating from big metropolitans to smaller municipalities.

Are you seeing the direct result of people moving from like California or Washington over to Idaho? Or are you seeing that in your segment?

Carl Baker: Yeah, it's pretty nuts. so, I would say traditionally half of our buyers were from out of state, when [00:22:00] COVID hit. You know, sales dropped pretty dramatically.

We kind of knew it would, I wasn't very worried. Like this is going to go away and we'll return. Didn't anticipate was the sales would return, two to three times as many as we had previously done. Right now probably 80% of our buyers are from California. You know, I had three record breaking months of sales last year. In February we sold 21, in June we sold 24, in July we sold 26, and then in November we sold 30 homes. You talk about a builder that started 150 homes. We basically did, we way outsold. So right now, if somebody came to me was like, Hey, Carl, I want to build a home with you. I would say, okay, that's great.

I can't start your house until the [00:23:00] end of July. So, we're super far out, so it's a little scary. It's a good thing and a bad thing. We did a pretty good job of raising prices really quickly, because as you guys know lumber, tripled in price from May till September. Then came back down and was doubled, but everybody was cheering because it wasn't 950 bucks it was only 650. Well, normally it should be 350.

Anyways, lumber came back down, but people kept buying homes. So we kept having to raise prices. Well, now lumber is back up at an all time high again. So that's, what's scary, right? Like I've got all these people I'm not starting their house, their homes for another four or five, six months.

I don't really know what the house is going to cost to build and I don't have an escalation clause in my [00:24:00] contract. So fingers crossed, I think we're good. We did raise prices as quickly as we did. I think we could have raised them higher and still been okay from a sales standpoint for sure.

Yeah, like it was nuts. Every two weeks my purchasing manager comes to me and said, Hey, here's new pricing and I'd look at it and every floor plan was up 10 to 20 grand. That happened every two weeks from basically beginning of June all the way until end of September. and in, November, December, January, we've also done pretty massive price increases as well.

Just to kind of stave off, look like stop buying.

 

Kevin Weitzel:  It's a great thing that you recognize that because, you know, if you listen to experts, I've got a huge respect for Bob Whitman and Bob Whitton, you know, has counseled many, many home builders out there.

He and I can't even quote them exactly, but he says something along the lines of, one of the [00:25:00] worst mistakes, if not the worst mistake, a builder can make is not recognizing their potential for volume or how much they can sell. Because the first thing that they're going to do is just have nothing but customer service issues.

Carl Baker: If they try to outsell that window of homes that they can build.

Kevin Weitzel: I applaud you for recognizing that would be an issue.

Greg Bray: Yeah, it's an interesting sales challenge though. Right? As someone who's charged with keeping the pipeline full, but now the wait is so long.

Are you seeing people willing to wait still or are they kind of moving on and looking for something else?

Carl Baker: Yeah. Good question. They are willing to wait because every builder in the Valley is the same. So we're all kind of sold out. Boise is an interesting market because we were really constrained to the amount of building lots that the cities are able to kind of not the [00:26:00] cities don't produce the building lots.

That's going to sound wrong, but the cities bring the utilities. So the cities are limited. So like here in the Treasure Valley, we can only build like 85 homes a year because the cities can't don't have the infrastructure to do more than that. So our biggest problem right now is a lack of supply.

There's just an infinite amount of building lots, and it's not like we can go from 8,500 building lots last year to two 20,000 building lots of this year, it's not going to happen. So that right now is what's driving price up, just the lack of supply.

Interesting. Now, that's not something we've really talked to anybody about that you're kind of constrained in that way and, and all of you together, right.

You and all the other builders kind of in the same boat there, can only do so much.

Kevin Weitzel: Civil and electrical engineers, listening to the podcast just went home. [00:27:00] They were highly likely to relocate.

Greg Bray: Do we have civil engineers listening to this podcast? I didn't know that. Well, Carl, we want to be mindful of your time.

You shared a lot of interesting stuff, but you know, kind of a few more questions. As we wrap up, what are some of the things that you're seeing your buyers expecting, differently now over the last year, kind of in that process? Just from a digital standpoint and from doing more shopping at home and some of those types of things.

Are you seeing any commonalities and trends?

Carl Baker: Sure. Yeah. so really, I mean, obviously we're in the information age. People want to know everything now one of our core values of our company is to, embrace continuous improvement. I mean we're [00:28:00] trying to implement new things all the time.

You know, we've engaged without having to have all of our floor plans on our website to be customizable and pre-determined customizations that buyers can do and just do it right from their home. Our design studio is now online. so once a buyer goes under contract, before they even come into the design studio, they can start picking everything out. You know, kind of seeing what color combinations they like.

We added a plat widget a couple of years ago that basically lets buyers know, Hey, these are the lots that are available. These are the lots that have some spec homes on them that are available. So, I feel like the more information that you can get to your buyer the better, so I mentioned Outhouse.

That was the first step kind of getting [00:29:00] the plans on there with the customizations. The second step to that is, we're going to be adding a feature on there with Outhouse where as the buyers make those customizations to the home, they can see in real time what those modifications are doing to the price, what the total price will be of that home on that lot.

So I, you know, really, we want to make it as easy for the buyer to customize the home. And by the home as we can, because I feel like going forward, that's going to really be what differentiates and differentiates us from our competition.

Greg Bray: I love that feature in the house plan. So give Kevin a plug on that cause it's good stuff.

You know, being able to tweak those options and see the pricing in real time. That's powerful to help me understand what I'm getting when I'm buying when you're trying to stay current and [00:30:00] see, what's out there.  Well, Carl, do you have any last thoughts or advice you want to leave with our listeners today?

Carl Baker: Yeah. I mean, We learned this year that you've gotta be nimble. You've got to learn to adjust, quickly and be willing to change.

Even to change our paradigm really is kind of what it came down to and that I know can be really hard for people. Seeing things from a completely different angle, you know, our mission statement, part of our mission statement is to, allow buyers to have the highest level of personalization in our price range of any other builder.

You know, one of the things that we did, I talked about the amount of sales that we're getting and just trying to keep people trying to, not so much keep the sales away, but we were [00:31:00] willing to modify people's homes to their heart's content. Our architect was working 80 to a hundred hours a week trying to keep up with all of these people's changes.

He did that for probably three months and finally, I went to my boss and I was like, we've just got to stop changes. Like we're going to kill the architect. It was a really, for me, like I've really bought into the customizability of the floor plans. my boss, who's the owner of the company.

Like, that's what he founded the company on, was being able to customize your floor plan, make it your dream home. You know, he's been drawing floor plans since he was 10 years old and so like, it was a really hard conversation for us to have, but we really felt like it was necessary in order to be able to get all the [00:32:00] buyers through the system that we needed to not kill the architect. As a result of that, we engaged out house to be able to do the pre-planned options. I guess what I'm trying to say is be willing to change your paradigm, be willing to approach a problem from a different angle in order to solve it.

I guess the last thing I'll say is, watch your numbers. I can't tell you how many builders that I talked to, between the months of May and September, and I would mention to them in passing, like man lumber is going crazy and they would look at me and say, what are you talking about?

So like I would just look at them and be like, you've got to be kidding me, you don't know what it costs to [00:33:00] build your home. Like, I can go to my person manager say, Hey man, I need to know what it costs to build this home today, with today's numbers and 15 minutes later, he can spit it out for me and say, this is exactly to the penny, what it would cost us to build this home today.

So for any of you smaller builders, listening, like watch the numbers, be aware of the numbers. Be aware of your costs, because I know for a fact during the months of June to December, a lot of smaller builders that weren't watching the numbers got caught with their pants down. 

Greg Bray: Great advice. Well, Carl, if anybody, you know, wants to reach out, connect with you, what's the best way for them to get in touch?

Carl Baker: Email is probably the best. It's just carl@tresidio.com. Terrific. And that's yeah. T as in Tom, R E S I D I O. [00:34:00] For studio with T it's not. Yeah.

Greg Bray: We'll put a link in the show notes to the website too.

So folks can find you there. Well, thanks again for your time today. We really appreciate it. And thank you everybody for listening.

Carl Baker: Yeah, it was my pleasure.

Greg Bray: Thank you 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.