Cost of Website vs. Model Home

Website vs. Model HomeYou’ve got a new business and a tight budget for marketing. You have to decide how to best spend those dollars. Is it on a great big sign, a storefront remodel, an aggressive newspaper advertising campaign or, if you’re a home builder, a model home?

We think the first place you should focus your resources should be on an effective website. Here’s why:

•    Your website is often your FIRST impression, not the model home or storefront. First impression is everything. Across all industries, a vast majority of buyers go to the web first before actually purchasing an item. Around 90 percent of buyers research new homes for sale online according to The Digital House Hunt: Consumer and Market Trends in Real Estate, a joint study from The National Association of REALTORS® and Google. You’ll get the occasional customer to come into your model home or sales center just because they happened to be driving by, but most people will research you online first (before ever stepping foot into your model home or storefront). Buyers visit your website to gather information/conduct research on their own and will form an opinion about your company based on what they find. And because of that, every time someone visits your site, you need to make the right impression – even if they are a return visitor.

•    Websites are one of the least expensive ways to generate leads. Just do the math; cost per lead on the web is a fraction of other lead sources. Companies spend big bucks on “point of purchase” for products, like store fronts and displays, and for home builders, in model homes. In recent years, the point of purchase has become an important focus for marketers; but since we know that customers are shopping online first (explained further below), marketers and business owners should focus on their “virtual” storefront or model home – their website. You can build a website to be the perfect point of purchase for your business. It can have the look and feel you want to convey, with the features that buyers need to find what they are looking for to make a purchasing decision. For home builders, that means technologies like interactive floor plans and site plans, mapping capabilities, etc.; and for other industries, it means shopping carts, payment processing, file sharing, inventory management, etc.

•    As a business owner or marketer, you shouldn’t see a website as just a place to advertise your business, but as a place to more effectively run your business. Modern websites have the ability to help you better run your business with Customer Relationship Management systems that help you send emails, follow up with customers, improve customer service, organize leads and more. You can also track and analyze the behavior of your customers and deliver personalized experiences based on traffic behaviors with a modern website. There are so many tools out there today that make a website more than an online brochure, but an information-filled, interactive, business management tool.

We often hear from business owners that websites today are too expensive. Well, today’s websites feature options, customization, the ability to easily manage content, highly-interactive functionality, responsive design, compelling content, personalized experiences and more. All of these bells and whistles mean that development of sites is more complex and laborious. Building an effective website takes time to plan, code, refine and test, and it comes with a matching price tag.

But are websites really THAT expensive? Let’s run some numbers.

In 2013, home builder profits averaged 9.3 percent of the cost of a home. A single home selling for $400,000 profits $37,200. This is enough to pay for the cost of the website outright.
Can you furnish a model home for the price of a website? Nope, not even close. Most builders would not even blink an eye to spend $250,000 or $500,000 on a single model home. Spending up to $70,000 (about two homes’ worth of profit) in a year on the web is a drop in the bucket compared to what it could bring in.

We realize that this is just a basic example but the point is that you should think about a website as an investment, like you would a model home. Your website should be a priority because it has the potential to outperform every other marketing instrument. Today, you simply can’t afford to skimp on your website.

Just a note: we’ve written this article for our home building audience and use the model home example, but the point is the same no matter your industry (just replace model home with storefront, ad campaign, etc., as it applies to you).

Contact mRELEVANCE to learn more about how a modern, effective website can boost your bottom line.