U.S. Homebuilder Confidence Surges to Six-Year High

Confidence among U.S. homebuilders rose this month to its highest level in six years, and many expect the housing recovery will strengthen in the next six months. 

The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday increased to 40 in September. That's up from 37 in August and the highest reading since June 2006, just before the housing bubble burst.

Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached that level since April 2006, the peak of the housing boom.

Still, a measure of builders' outlook for sales in the next six months rose to 51. That's up from 43 in August and also the highest level since June 2006.

Builders also reported seeing the best sales level since July 2006. And turnout by prospective buyers returned to levels not seen since May 2006.

The positive trends have helped bolster optimism that the U.S. housing recovery will endure.

"We think things have turned around and this recovery is sustainable," said Patrick Newport, an economist with IHS Global Insight. The rise in builder confidence means that new-home construction is likely to increase over the next six months, Newport said.

The survey, which is based on responses from 445 builders, has been trending higher since October. After a dismal 2011, homebuilders have seen their fortunes begin to turn around this year as the housing recovery has steadily gained momentum.

Sales of both new and previously occupied homes are running ahead of last year. Home prices are increasing more consistently, in part because the supply of homes has shrunk and foreclosures have eased. And mortgage rates remain near record lows, beckoning potential buyers with good credit.

Still, the housing market remains depressed. While the turnaround will continue next year, a complete recovery in home construction isn't expected before 2016, Newport said.

The housing market isn't expected to recover fully until job growth improves and the unemployment rate, now at 8.1 percent, declines further.

Still, sales remain on the upswing at Taylor Morrison, which builds homes in five U.S. states and caters to entry-level and move-up buyers, as well as seniors.

The Scottsdale, Ariz.-based company's sales are up 40 percent from last year, said Graham Hughes, the builder's vice president of sales and marketing.

Hughes says the lower inventory of previously occupied homes for sale has helped drive stronger demand for new homes. Demand has been especially strong in markets like Phoenix, where the builder's sales are up 80 percent. That's made it possible for Taylor Morrison to hike prices there by an average of 15 percent.

Taylor Morrison expects to close out 2012 with 15 percent more employees than last year. It also anticipates boosting payrolls by another 10 percent next year.

"I'm definitely optimistic now," Hughes said. "We've turned the corner and we're at the bottom and starting to look up."

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the NAHB's data.

(Source: The Associated Press, 09/19/12) 

Drivers Want -- And Will Pay -- For More Efficient Cars

A growing number of Americans are demanding not only more fuel-efficient cars, but those that run on cleaner alternatives to gasoline -- and they're willing to pay, according to a pair of new studies. 

That could be good news for manufacturers fretting about the cost of meeting the government's strict new Corporate Average Fuel Economy, or CAFE, mandates requiring an average 34.5 mpg by 2016 and 54.5 mpg by 2025.

"Cost is a key issue," especially with more radical alternatives such as electric propulsion, said Phil Murtaugh, the head of California-based Coda, a start-up in the emerging market for electric vehicles.

A study conducted for Ford Motor Co. by Penn Schoen Berland found that seven in 10 drivers are taking steps to reduce gas consumption, most reporting they are driving less and nearly half saying they've slowed down on the highway. Others have adopted somewhat more extreme steps, such as drafting behind larger vehicles.

Meanwhile, 21% said they have purchased a newer vehicle that is more fuel efficient.

And 25% told researchers that if they had an extra $1,000 available at the time they made their next vehicle purchase they would opt for a hybrid rather than a conventionally powered vehicle. That could signify a notable shift in consumer sentiment. Conventional wisdom has suggested motorists want greener, more fuel-efficient products but weren't willing to pay for the necessary features to get there.

Ford is one of a growing number of manufacturers offering steadily more hybrid technology options, such as the gas-electric version of the 2013 Fusion sedan and the hybrid and plug-in versions of the new C-Max model. Toyota has promised to introduce hybrid versions of virtually every model in its lineup over the next few years and its Lexus luxury brand hints that it could have several more dedicated hybrid models coming.

A separate study by Phoenix Marketing International finds that a solid majority of American motorists are now willing to consider some form of alternative propulsion, whether hybrid, pure battery-electric or something even more radical. In fact, the vast majority of buyers under 40 see that as a real-world choice to consider, the study indicates.

Surprisingly, perhaps, the study found those in the luxury market more open to alternative propulsion, by a margin of three-to-one. In more mainstream product segments it's still two-to-one willing to consider alternatives.

The younger the motorist the more open they are, with only 10% of those under 40 not open to cleaner or more fuel-efficient powertrain technology, reports Phoenix, which polled in July 1,800 consumers who were either just in the market or were still looking for a new vehicle.

"For automotive marketers that means there is immense opportunity for developing and delivering alternative fuel messaging around their brand," said Phoenix Senior Research Analyst Kevin Severance, especially in marketing aimed at younger buyers. "As alternative fuel vehicles continue gaining popularity, cultivating and communicating an alternative fuel image will be critical. Honing related messaging will be step one in persuading consumers who are unsure about the technology to consider their products."

Among non-luxury brands, Toyota had the most buyers inclined to consider alternative fuel vehicles, the survey revealed, followed by Ford, Honda and Chevrolet. Among luxury brands, BMW led the way, followed by Lexus, Mercedes-Benz and Audi.

The biggest challenge for the auto industry is to translate purchase interest into an actual purchase. Recent studies have repeatedly shown that shoppers will at least look at hybrids and alternatives but when it comes time to buy they largely return to conventional alternatives.

But while hybrids and other battery-based vehicles currently account for barely 3% of total new vehicle sales, the total number of those vehicles registered during the first half of the year rose by roughly two-thirds compared to a year earlier, according to another new study by Experian Automotive.

And those who market diesels, another fuel-efficient alternative, are also reporting strong results. Volkswagen has seen demand for the diesel-powered version of its Passat sedan climb to 26% and now believes it will nudge beyond 30% once it expands capacity.

As for battery-electric vehicles, Murtaugh told TheDetroitBureau.com he expects that as consumers become more comfortable with cost and range issues he expects demand to rise, although it could take years before that technology moves into the mainstream, he acknowledged.

(Source: The Detroit Bureau, 09/13/12) 

Sales Tip: The No. 1 Factor in Customer Loyalty -- You!

It is devastating when you lose a long-term customer to a competitor. It's even worse when you have been there for them, consistently providing top-notch service for years. You feel betrayed by their lack of loyalty.

Plus, you're ticked off at your company. You did everything possible, but they didn't give you a good enough price to compete effectively. Or, your offering just wasn't quite as good as your competitors.

Here's the deal. You may be seriously deluding yourself about the reasons you lost the business. Recently the Corporate Executive Board did an in-depth analysis of customer loyalty drivers. Here are the primary factors they uncovered and the percentage of their contribution to loyalty.

19% -– Company/brand impact
19% -– Product and service delivery
9% -– Value-to-price ratio
53% -– Sales experience

Stunning, isn't it? You are the biggest factor of all. Your personal impact during the sales experience is greater than all the other factors combined.

Clients stay with your firm because of what it's like to work with you. But it's much more than just having a "great relationship" with them or taking care of all their problems.

Your customers want you to be an invaluable resource to them all the time. Specifically, that means they want you to:

* Bring them ideas, insights, and information to help them achieve their business objectives.

* Guide them about how to make a good decision, as well as who needs to be involved and the next steps.

* Keep them up to date about any changes that could impact them -- positively or negatively.

* Challenge their thinking and provide them with fresh perspectives.

Are you doing that with your best clients? If you're focused on just your relationship, it's simply not enough. You may be at serious risk of losing them if a competitor comes in and provides the value they're looking for.

There's No One-Size-Fits-All Mom

Marketers like to bucket us into categories of the second life mom, the Millennial mom, Gen X moms, Gen Y moms, the vibrant mom, the survivor mom -- to name a few. The truth is, it’s very hard to categorize us. We are a huge demographic. And the growing multicultural mom is barely being addressed. 

Most research is done through surveys, which don’t really bring to life what it’s like to be in the midst of today’s highly social mom. The moms I’ve met don’t care one iota if you are a single mom, a divorced mom, an older mom, an empty nester, a WAHM or a SAHM. It is motherhood that binds us together along with a desire for camaraderie and shared information. And these virtual moms are often our BFFs. Gone are the days of moms hanging over the picket fence and spending a few minutes socializing. We’re all just too busy. Brands looking to leverage social media should be looking for the influencer moms who have built networks of mom relationships and where trust has been established. These networks have little to do with categorization. 

There are several things that marketers can remember regardless of “mom type.”

1. Moms have one foot in today and one foot in the future.

She thinks about the immediate and what lies ahead. She likes brands that save her money today while keeping an eye on our collective future through sustainability or eco-friendly practices.

2. Enlist an opinion of women/moms to weigh in on your marketing ideas.

Moms are eager to talk to brands. We don’t bite. But brands often forget to include the very audience they are trying to attract. Translating marketing insights into campaign materials that will resonate is often a big misstep because research is often taken so literally. Just because it says we “like” to garden, doesn’t mean you throw photos all over the communication materials of moms gardening. Think about gardening from a different perspective: why is she gardening? Is it because it’s therapeutic? Is it calming, “me” time?

3. Don’t be so overt that you’re marketing to mom.

Mom has become a huge focus of today’s marketing. But that doesn’t mean you have to start off things with headlines or voiceover copy saying, “Hey, moms! This is for you.” And don’t use pink-unless it’s brand appropriate. We don’t buy things because they’re made for moms, we buy them because we need them. Brands need to sell from the perspective of what she is looking for, not from the fact she is a mom. 

4. Use social media to beta test your marketing ideas.

The great thing about social media is that it is a living, breathing research resource of your audience. You can put out ideas to the audience to see their reactions before spending lots of dollars. Moms are happy to give opinions within reason. The influential mom will want to be paid to give a brand advice, but it will be money well spent. 

5. Remember marketing to a mom is marketing to the family.

Brands targeting mom need to know she’s choosing with her family in mind. And because today’s families are so busy, she’s looking for things that bring the family together. Watching YouTube videos and gaming are the new family entertainment. That new popcorn brand she just picked up was not chosen because she was hungry, it was chosen because she thought the family might like to try something new.

Make a great product and she’ll find your brand. Make a great product with great customer service and you’ll have her for life. And this is true of any categorization of mom. Brands need to look at their products in addition to their marketing efforts and mix. Moms aren’t going to socialize a crappy product at least not in the way a brand would want. Start with providing detail. Moms like information and to be educated about the products they are bringing into their homes. Remember Moms are well equipped to adapt to the changing social media landscape. Moms do their homework and understanding the details is part of the homework regardless if they are a Latina mom, a boomer mom, a second life mom...


By Holly Pavlika Friday, Sept. 7, 2012