It's been a nerve-wracking month for anyone who makes a living within the two powerful force-fields of the Energy Sector, writ large, and the Chinese Economy, writ large. The reality is, whether it's the major metro markets or the heartlands, those two force-fields exert a sweeping array of collateral shocks.
Smart money says that the rushing tide of volatility, anxiety and reflexive loss-averse daisy-chain of behavior will settle out, find its floor, and reset assumptions.
Whether these specific disruptions and dislocations of 2016's onset are defining or fleeting phenomenon that we'll all get past, what they continue to affirm is that while a modicum of stability may appear to take hold in the broader U.S. economy, uncertainty's pervasive presence lurks ever close to the surface.
Where does that leave a home builder? Where does it leave a manufacturer, or a materials supplier or a land seller, or a capital partner at least some significant part of whose businesses share a fate with the builder?
What should happen and what shouldn't happen get thrown into flux in our world.
What should be happening is that fundamentally pent-up demand, in both household formations and related activity in both renting and purchase of residential real estate, should continue to play out as real demand for new, used, and rentable homes for the next several years. However, although that should be happening, actual behavior has massively lagged expectations.
What shouldn't be happening--at least to the significant extent that we're seeing--is that oil prices continue to crater, that China's economic juggernaut prove to be a fantasy, and that Wal-Mart should be shuttering stores vs. opening more new ones.
What should be happening isn't. What shouldn't be is. What does this mean for you, now.
Especially for those whose front-end investments commit them to 24 or 36 or even 48 month horizons, between putting the capital in place, and deriving all of the revenue from it, risk tolerances are getting a real test.
Fact is, when fear and risk prevail, some gravitate to safety, but not everybody. Others horn in on growth opportunity, frequently at their competitors' expense.
Safety may be the place many companies will be relieved to operate in during 2016 and beyond. That's not good enough for the few who are bent on being leaders.
When secular risk intensifies, outliers can counter it two ways. One is people. People that other people trust is critical. No dimension of a home building operation isn't improved when trust underlies the interaction--finance, purchasing, land strategy, hiring, working with trade crews, and most importantly, your customers.
One builder we talked to last week says that 30% of his company's new customer prospects come through the models and sales centers based on referrals from current customers.
Trust may be taken for granted, but it shouldn't be. Trust suggests confidence too, that what one says is going to happen will happen. And if it doesn't someone will get made whole. That's how trust works.
The other way smart companies will counter risk in a risk-pervasive environment is data. Real estate investment, residential construction, and operations are rife with data. Data is everywhere, but a lot of the data housing creates isn't made or filtered or interpreted to be helpful to you, now, for action. Most of the available data about housing may be helpful to organizations like the U.S. Commerce Department or the Department of Treasury, for the purposes of revenue, policy-making, and government services.
Everyone's familiar with the ups and downs of these data streams, how prone to error they can be, and how inconclusive they are at helping enterprises make better decisions, invent smarter plans, target more precise and efficient programs, and create more effective outcomes as they invest huge sums of money on the front-end of neighborhood and community and home development with all of their upside well downstream of the investment.
In the past couple of weeks, Hanley Wood has introduced two new proprietary data services, OnTarget and DataScale, to do exactly those things, to help builders, partners, investors, planners, and materials and manufacturers make better, smarter, faster, and more precise decisions on how and where to allocate finite resources for a greater return.
Smarter, faster, better, cheaper. Usually, you get to pick, at most, two of those options and let the other two go. But with meaningful, helpful, proven data, the decisions you make can be more precise, higher velocity, more effective, and more frugal.
Here's a brief on how OnTarget can change the way you're looking at the next 12 to 24 months on land planning, neighborhood programming, product design, amenities, even down to the floorplans and pricing you go to market with as you open and sustain those new communities.
Fueling OnTarget is Metrostudy’s Consumer Housing intelligence – data on over 100 million households. Leveraging years of research and expertise, Metrostudy’s proprietary segmentation model distills over 10,000 attributes into an easily-understood, actionable housing-preference consumer segment matrix. This intelligence is applied to every home closing in Metrostudy’s industry-leading geographic footprint; providing an unparalleled view into homebuyer preferences nationwide.
The result is more efficient and effective marketing and advertising providing clients with the ability to:
• Hone in on their most profitable consumers & attract ideal prospects
• Analyze demand, expansion, and growth opportunities
• Prioritize markets for entry and exit
• Evaluate current & future household distribution of segments to size markets
• Minimize capital risk in site location and product mix decisions
And let's say your "target" is those people making those design, development, sourcing, financial investment, operations, and marketing and sales decisions. If your target customer is those people who are part of the audience ecosystem Hanley Wood has created among its brand titles and and platforms, then DataScale is the way to make better decisions on how, when, and with what programs to zero in on the ones you want to talk to and create relationships with. Here's a brief on what DataScale does.
It provides customers with a full-service platform that allows for database cleansing & enhancement, audience targeting & segmentation, and advanced lead development programs. DataScale provides unparalleled access to Hanley Wood’s Construction Industry Database and to the company’s data analysis and industry expertise. Construction industry sales and marketing professionals can now match their customer data against the Construction Industry Database and turn complex data sets into marketing insights to improve buyer engagement and accelerate sales.
It's risky out there. But let others settle for safety. You can drive for growth. With trust and with data as your fuel.