Transcript
Dean Wehrli:
Hi, everyone, and welcome to the new Home Insights podcast. I’m your host, Dean Wehrli. Today we’re going to delve very deeply into the world of new home builder sales and marketing. Stephanie McCarty is the Chief marketing and communication Officer for Taylor Morrison Homes, one of the biggest and best new home builders in the country, a truly national footprint. They’re in a lot of markets all across our nation. Stephanie is going to be our guide on mostly a big picture sense of how a big builder approaches sales and marketing. We’re going to talk about tactics, strategy, and media, and then we’re going to end with a deep dive on buyer segments, and how Stephanie and Tayler Morrison view different home buyer segments. First, Stephanie, how are you?
Stephanie McCarty:
I’m wonderful. Thank you for having me. It’s good to be here today and to see you.
Dean Wehrli:
Thanks for coming on. Why don’t you start us off there, a little bit like we usually did here in the show, is just tell us a little bit about yourself, and then we’ll get right to the questions and answers.
Stephanie McCarty:
Perfect. As you said, I’m the CMO at Taylor Morrison, our first ever position, so I get to be the first in the seat here, which is pretty exhilarating. It’s been quite the ride, right? I joined Taylor Morrison in 2015 as the vice president of communications, and we really were under this edict of creating a brand inside. We were kind of the product of a lot of different mergers and acquisitions, and so I was really like, “Who do we want to be when we grow up, and how do we get all of our team members rowing in the right direction?” Cheryl Palmer, which I’m sure you know her well, had a-
Dean Wehrli:
Friend of the show. She’s been on.
Stephanie McCarty:
… Growth strategy in mind, and we wanted to make sure we really started on the inside. About three-and-a-half years into that role, she said, “Hey, you’re touching every key stakeholder here except for our largest one.” What do you think about being the chief marketing officer? So I think I got promoted without really knowing it, and took on this new world of opportunity, and I have had so much fun. It’s been about five-and-a-half years since that moment in time, and we have done a lot to be proud of and worked really hard. We built a team of dynamic talented marketers that we’ve recruited from outside the industry, bringing fresh perspective, and we’ve in-sourced everything. At a time when I stepped in, I think every key discipline within brand marketing, the look, the feel, the voice was outsourced.
In order to really protect and create the brand that we wanted, knowing we were in this moment of rapid growth, we knew that we needed to do that very intentionally and with people who could protect and create and control that brand from the very beginning. So lots of change for the organization as we went through that strategic approach, and I think in the last few years we’ve done some really exciting, innovative things that are very different for our industry, but really, are all tied to consumer changes, consumer behavior, consumer preferences, knowing that the model that, I think, our industry put in place a long time ago is still working for some consumer sets, but isn’t going to work for everyone. With the world evolving at the pace that it is, and how consumers are shopping for every other goods and services, new home building doesn’t have to be different, right? We can blend to the same line as retail and other goods. I think, since we’ve done that, we’ve learned even more about what the consumer is willing to do and what they aren’t willing to do.
Dean Wehrli:
Yeah, it’s a little dicey. Not dicey, that’s not the right word, but the biggest difference, as we all know, it’s kind of an old hack saying, but that’s the biggest purchase decision any consumer is going to make in their entire life. So you don’t want to be hidebound, you do want to be innovative, but at the same time, it is a much bigger decision than buying even a car or something like that.
Stephanie McCarty:
I agree, and I think about just communication preferences. Everyone likes to be communicated to differently. Everyone approaches life differently. So I think just providing the optionality allows us, at Taylor Morrison, to grab a bigger piece of the market share, because we’re attracting consumers that want to engage with us in a different way, where our traditional model just wouldn’t really allow them to. I say this little anecdote quite often, is when I stepped into the role, I think our website, your biggest sales tool that an organization can have was purely seductive. It was, “Here’s a few beautiful community and home shots,” but for more information come or call the sales office.
Dean Wehrli:
Yeah. Oh, I see.
Stephanie McCarty:
And tell me, Dean, another purchase that you would consider making if all you got was a picture. You don’t get a price, you don’t get much information. I mean, consumers today want to control the process, and I think the model that we had in place just didn’t give them much control or much insight into it. I think, because it’s such a big purchase, people want to feel really informed, educated, and ready.
And so I think we could talk about it, but a lot of the tools that we’ve put in place, even on our website, our consumers are coming to the sales center ready to sign a contract, because everything that they need to know about their future home, they can get online at a time that’s convenient for them, with their spouse, to have those hard conversations about, “What do we want our life to look like? How do we want to live, what do we need?” No one wants to have that conversation in front of a salesperson. And so it’s just seeing such a tremendous change in how consumers are behaving, what they want, and the way they want to engage with us, which is really exciting.
Dean Wehrli:
We’ll get to that in depth. Let’s start big, big, big picture though. Really big picture. Let’s pull back. So what you do often gets lopped together much of the time, sales and marketing. Talk about the sense, though, that these two things are very different. There’s major differences between sales and marketing. Walk us through that.
Stephanie McCarty:
Yeah, and it’s true, and I feel that when an organization couples them together, you’re doing a disservice to both groups, because you could be really good in one and maybe not as proficient in the other. Essentially it’s all sales, right? It’s just what part of the sales funnel are you leading? So marketing, in its most traditional sense, is starting the relationship with the brand and the product, generating interest, right? Driving those leads in whatever way they come in, driving foot traffic. And sales, they’re the ones to hook them in and close them, right?
And so, the way that we’ve approached it is there is a very specific skillset that our sales leaders and our sales teams need, that maybe marketing doesn’t have, but we know the consumer. We know how to position the brand where they’re at, right? It’s 2024. Our consumers are on their phone. They’re consuming information at a rapid rate, right? They’re on social media. This is where they’re getting information about all of their future purchases. And so marketing, as long as they’re separate, you can have people really focused on certain parts of the sales funnel and the sales pipeline, and allow a sales person who’s really skilled at doing that part of the process to hook them, close them, sink them, grab them, right?
Dean Wehrli:
Yeah, yeah.
Stephanie McCarty:
So we’re working with one another, and since we’ve kind of bifurcated church and state almost six years ago, we’ve seen that play out to the benefit of our customers.
Dean Wehrli:
You do see it locked together though, still quite often. I would say it’s still the norm, but it’s probably going to go into your direction. Let me tell you my crass definition of the two, and tell me if I’m just awful, but I sometimes think of marketing as the pursuit of trying to design something that you think an audience will want, and sales is the attempt to induce those consumers to buy something, whatever their product is. Is that terrible or?
Stephanie McCarty:
I don’t think that’s terrible. I like that, very much.
Dean Wehrli:
And so you can tell how they are very, very different. They’re not really the same thing. Again, the goal is the same, and they’re probably more similar than we’ve been letting on but, like you said, the skill sets are pretty different in my mind.
Stephanie McCarty:
The skill set’s different. The approach, strategy, and even the tactic is different, right?
Stephanie McCarty:
But again, you need one another. Absolutely.
Dean Wehrli:
What are the keys, when you are going to launch a new community, you’re thinking about designing a sales and marketing campaign. What are those first things that come to your mind, “Okay. We’ve got to do X, Y, Z. We’ve got to know these critical things to get a successful campaign going”?
Stephanie McCarty:
Yeah. Well, I mean, I think that comes back down to just when you’re first looking at a piece of dirt. What’s the end goal? What are you underwriting to? Who is the consumer? Who are you selling to? What’s the target product? So I think being a part of that process, and understanding it at a very early stage, obviously, sets that community up for the greatest success, because tactics can change, channels can change the way you do it. The way you generate interest, there’s lots of different ways, but it’s really understanding, which I didn’t come from home building, so I have a long career ahead of home building before I got here.
And so I just think about, we take such a big risk by purchasing a piece of dirt and hoping that in three, four, five years people will come and enjoy living there, and so much change can happen in that time. It’s almost like we need these crystal walls to be able to predict the future. And I think marketing, market intelligence, sales, there’s so many pieces of that equation that need to be involved from the very beginning, because oftentimes when marketing isn’t involved from the beginning, they’re often the one that gets pulled in at the end to try to save it, right? And sometimes you can’t pay a bad land deal with marketing. It doesn’t matter what you do, so I think that early on involvement, but it’s all about generating interest. What makes that community so sexy and appealing, and who are you trying to appeal to, right?
Dean Wehrli:
Actually, I have that question, Stephanie, so let me ask it now. I was going to ask it later, but that’s now. Can a really good sales and marketing campaign overcome a not so good product, and vice versa?
Stephanie McCarty:
I don’t know that it can. I mean, does having better salespeople on site help? Probably, but I think, there, that’s when price elasticity and pricing comes into the equation, right? Of value for whatever the miss was, but oftentimes, I mean, I hate to say it, but marketing can’t fix the bad land deal. There’s other levers that ultimately have to get pulled. You can get very creative, but consumers are smart. They can sniff that out.
Dean Wehrli:
I was going to ask you that. I know it’s putting you on the spot a little bit, but is there one thing, you think of a marketing campaign, and does it start with the buyer? Does it start with the market in that area? Does it start with the product? Or does it start with the location? Or is it all those at the same time? And there really isn’t one thing, you’ve got to have all those things going on?
Stephanie McCarty:
I think 30 years ago, 20 years ago, maybe even 10 years ago, Dean, it was location, right? Location was king. I really feel that today’s consumer is extremely savvy. When I first got to the organization, and was working alongside a very brilliant operator, he told me, with conviction, that no one buys a home building brand. It doesn’t matter what your brand is. I have lived here and come to work every day to prove that sentiment. I think I do it every day, hopefully. He’s no longer with the organization, because maybe I do– But people do care about who they’re buying from today. And I’ll tell you an interesting stat that our head of marketing intelligence shared with me earlier this year that he was just flabbergasted by. Our shopper survey, so we just recently learned that 47% of our shoppers are not considering purchasing from any other new home builder. They are coming into our doors with the pure intent of buying a Taylor Morrison home.
Dean Wehrli:
Wow.
Stephanie McCarty:
And to add on our market, Phoenix, which is our biggest market, we have consumers calling our online sales teams to get pre-qualified before they’ve ever stepped foot into a community, so they know what they’re qualified for, and then they go almost backwards in to find, “What community of TM can I afford to live in?” and I’ve been told, not as an industry veteran, that that is unheard of. It’s just a different way of getting into the sales funnel.
Dean Wehrli:
I’ve been doing this for over 25 years. I’ve heard that one time. It’s a builder that’s no longer in existence. Actually, it was in Bakersfield, California. And they literally would have people, you went from this builder’s home to the next one. You moved up. You literally, you were on the waiting list. “Here’s my price point.” It didn’t matter where in greater Bakersfield it was. You were going to go there. I’ve never heard that for us, especially a national builder where you’re building in such disparate locations. That’s amazing. That’s an amazing stat.
Stephanie McCarty:
So it’s a huge pride point for us, and I think it just goes to show people do care about brand, and what we’re doing is working. There’s still, obviously, lots more that we can do as we try to grab market share, but I think it’s something that we hang our hat on, and it’s why we continue to try to find new ways to reach these buyers and consumers.
Dean Wehrli:
So what is Taylor Morrison’s main proposition? Some are being attainable priced. Some are being that luxury builder. What is your main thing that you do hang your hat on?
Stephanie McCarty:
It’s hard. We’re not a niche builder, right? We have a family of brands, and we have a variety of product to serve a variety of different consumer segments, which I think is helpful, because when markets get bumpy, our whole business isn’t under disarray. We have other muscles. When the affordable buyer is really tapped, we’ve got our resort lifestyle buyer who isn’t feeling the same pressure, so I think the fact that we have that suits us and helps us. Some builders are very niche and I think that probably presents its own market challenges, so I think in that, we have a brand.
Our value proposition comes down to who we are as a builder, our values, the quality, the fact that we’re America’s most trusted home builder, nine years running the fact, the concept of brand trust, saying what we’re going to do, doing what we say we’re going to do, bringing that to life. I think the personality and warmth too of how we position our products, through all of our media channels and our advertisements, I think we’re making a connection and a relationship with consumers before they even come to one of our communities. So I think it’s very ownable to us. We have a female CEO who’s very approachable, and I think that really transcends, not only our culture on the inside, but how our brand is perceived on the outside.
Dean Wehrli:
And like you said, you’re not niche in that sense. You have to be a lot of things to a lot of different people. That includes geography. Are there differences in, again, going back to just your sales and marketing campaign, your sales and marketing process, are they different in the Carolinas versus California versus Texas?
Stephanie McCarty:
Yes and no. I think a lot of the tools that we can deploy are the same. Is the price point the same? No. Is the product the same? No. Is the drip campaigns the same? No, because we tailor that to the specific consumer segment and to the product. For example, our resort lifestyle, active adult, call it which you, H-qualified Esplanade brand, that is a very long sales process, right? These are often retirement homes. They’re relocating into the market. This isn’t a hurry-up and buy a home process, and so the nurturing of that consumer takes a longer time. The campaigns are designed that way knowing that the consumer’s in a different place, so if you took a one-size-fits-all approach, I think you’d fall flat on your face, so we have a lot of different tactics and, like I said, levers that we can pull and that we adapt based on product, consumer, geography and price point.
Dean Wehrli:
Is it kind of top down, or will the vice president of sales and marketing in, again, whatever, the Charlotte division or metro division, do they have a lot of leeway in terms of what they can and can’t do, or is it a little more top down?
Stephanie McCarty:
I think it’s a little bit of both. Our structure at Taylor Morrison, we have what we call our brand marketing department, here at corporate, that really run the creative. We do the paid and social media here. We do all of our earned media. All of that’s kind of controlled, and then we have field marketing that report up into the divisions, and they’re in charge of driving foot traffic. And so between the two teams, we’re informing our sales leaders of what’s possible. You’ve got this kind of treasure chest, if you will, that you can choose from and try different things, and the sales leaders are very much involved in that process and while informing that strategy by community, by division.
Dean Wehrli:
That sounds ideal. They have resources they can lean on, but let them kind of do their own thing. It is going to be a different way to sell homes in, again, across the country.
Stephanie McCarty:
And I think a lot of it comes down to trust and having experts in-house, right? We’re all on the same team. We have the same goals. We all are here to sell homes. And so, it’s leaning in on who the experts are in-house. We brought paid media in-house, who are optimizing those strategies for every community day in and day out. They’re not servicing any other brand. They are committed to our brand success, and so I think we are at an advantage than paying an agency who has no idea who we do. They just want to know what the budget is, and they don’t have time to optimize, right? So we really are putting our own success in our hands.
Dean Wehrli:
Let’s do one question on product, and then we’ll get right to a couple of questions on media specifically, so that’s a good, almost segue. My question, though, on product is, how do you test product and communities too, just what kind of homes are you going to build? When I say product, by the way, for our listeners who that’s jargon to, I mean, the type of home, the lot size, the home size, things like that. How are you making sure you’re putting your best foot forward? This is going to be successful, or that what product has been successful and what hasn’t?
Stephanie McCarty:
Well, I think a lot of that, Dean, is trial and error. We do have an in-house product design team that is looking at the numbers that is analyzing what sells, what doesn’t. We are optimizing and refining our plan library all the time. You have to. Consumers are changing as well, but I do think some communities, some markets pay the dumb tax on trying something, but it is. It’s a trial and error. You have to see how it looks, how it lives, and then optimization comes after that. I think our industry is actually pretty good at that, and again, some of the talent we have in-house here at Taylor Morrison has helped us just make tremendous improvements in the last few years.
Dean Wehrli:
Now let’s talk about media. I’ve been dying to talk about this little module here, but let’s just start us off again, kind of big picture, which is what are those key media platforms that you use when you’re going to start, again, that theoretical sales campaign for a new community?
Stephanie McCarty:
Well, it’s a big funnel, right? And so we have channels and media channels that fit every part of that funnel, right? So I’d say traditionally our industry is very bottom of the funnel focused, which is your paid search tactics, your programmatic. Those are very specific at buying a consumer who is ready to buy now. Social media today I think is an area for new home construction to really embrace. I think Taylor Morrison, we’ve embraced it the last few years, and we are building relationships with those younger demographics that are going to be coming into their own buying years, already having that seed planted of who Taylor Morrison is, how we behave. There’s a personality to our brand on social media that is inviting and welcoming, right? So we’re creating a feeling very early on. So that’s more of our upper funnel tactics, and it all feed in. I mean, we did an influencer brand partnership last year with the home edit.
So we’re getting our brand entered into different channels and different conversations that are taking place, and that was great exposure for us. Again, entering more people into that sales funnel. I think earned media, which is not an owned channel, but a very important tactic and strategy for us that compliments our paid channels, is really important. So we’re trying to grab more of that share of voice, which, again, is just increasing our exposure and our reach and our brand awareness. So there’s a lot of different channels that fill that pipeline for us, but we try to stay ahead of the curve. We want to be where our buyers are, and as we said earlier, they’re on their phone, they’re watching TikTok or Instagram, and that’s where we need to be to enter the chat room and be part of certain conversations, and whether they invite us in or we pay to be involved, it doesn’t really matter. Video, right? So YouTube shorts.
Dean Wehrli:
Really?
Stephanie McCarty:
We’re trying to think outside of the traditional marketing landscape. I think there are-
Dean Wehrli:
You’re on TikTok?
Stephanie McCarty:
We are.
Dean Wehrli:
Would you go on TikTok and do a dance while extolling the great new Taylor Morrison community? And if not, why not?
Stephanie McCarty:
We absolutely are, and it’s funny, because when I got to present to our division presidents twice a year, I will share TikTok videos.
Stephanie McCarty:
… And they’re like, “What is this? How is this selling homes?” We do, and we jump in on cultural movements. We have fun with it, and we get such great engagement, and people are like, “Oh my gosh. Who’s running this home building TikTok channel?” It’s the best thing. We won America’s Most Trusted, and we did this silly trustful thing on TikTok and it got lots of engagement. When there’s trending videos or music, we jump into it, because we’re trying to have fun and position the brand in a different way, because it’s a long-term view, right? This is a long relationship. People want to know who they can trust when it comes to a home building, and so we’re exposing our brand and who we are and our product in a way that I think, unfortunately, a lot of builders haven’t fully leaned into.
Dean Wehrli:
Please tell me, though, you would never pay a Kardashian to talk about Taylor Morrison while she’s exercising or something like that. Just please promise me.
Stephanie McCarty:
I never say never. If my budget gets big enough, Dean, I might consider it.
Dean Wehrli:
They’re expensive.
Stephanie McCarty:
Yeah.
Dean Wehrli:
I imagine. I’m assuming. Does anyone, and I say this with respect to a venerable media, does anyone advertise on newspapers anymore? Is it at all an important part of any campaign?
Stephanie McCarty:
I think the desire is there to do so, not necessarily because it performs, but because it’s a tactic that’s always been done. So there are certain markets, I would tell you, Dean, that they gravitate more towards that, and they feel that it works. So they don’t really have any key metrics or data that proves it, and so a lot of the times, I’m not here to say no to a division president, but what I often will say is, “Okay. Let’s try it.” During that time period, we’re not going to do anything else above and beyond, so let’s see what it does and let’s see how it performs.
And a lot of times they don’t like to hear that, but it’s really important that we use our marketing dollars in areas where we know what works, and there’s, a lot of the work that we’re doing to support the divisions, we can track. We have performance metrics. We know what’s working. We have surveys. We know that our website is driving traffic in a way that you can put signs and billboards out there, and you have no idea if it’s doing anything. But one of the common things I’ll hear, Dean, is, “Hey, we’re entering a new sub-market. No one knows how to find us, and we need this billboard,” and it’s purely directional.
I can say, “Okay. But there’s Apple Maps. There’s Google Maps. The world has advanced, so are we sure they can’t find new? Let’s try these other tools.” I think it’s more, to your point, old behavior and an old way of thinking, that I think we’re growing, we’re all evolving, we’re learning what works and what doesn’t. In some markets, I would say maybe it does make sense, but not in all.
Dean Wehrli:
Okay. Are you still on X/Twitter? Because conspiracy theorists can buy homes too. Is that an important platform for you guys?
Stephanie McCarty:
No, it’s a good question, and we’re not. I think we were for a while, but it doesn’t perform as well as some of the other media channels that are more video based, because our product, to one of your earlier points, is very visual, right?
Dean Wehrli:
Yeah. So Instagram, YouTube, those make more sense?
Stephanie McCarty:
Instagram, Facebook, YouTube, TikTok. I don’t know that we saw a lot of performance, growth metrics, and conversions from our Twitter account, and it’s a lot to manage. The more channels you’re managing, the more stretched you are. So we really wanted to go all in on the channels that we know are performing.
Dean Wehrli:
And there’s good data for that. There’s good metrics for that. I remember the early, the dot com, you might not be old enough, you’re probably not. But the early.com days, I was with a company and they were going to really, really go all in the website, and they hired this company to tell them these growth metrics, and so it was like, “Oh. By 2004 you’ll have 4.7 trillion eyeballs on your website.” It was just made up numbers, things like that. Are there good, solid metrics now to measure this kind of thing?
Stephanie McCarty:
There are, and certainly, from a paid media perspective, via social channel. We know where they’re coming from when they get to our website and they convert. We know what channel led them there, right? I mean, that’s data that you just can’t argue. I think the big brother, I mean, there’s a lot we can know about where our consumers are and what they’re doing online, than we could have five years ago. It’s good for brands. It is sometimes a little creepy and scary feeling, knowing how much information you can have, but gosh, it helps us be able to predict the next move, right? And so it’s really useful.
I think our industry, we don’t have any prior transactional knowledge. So I think about, if I shop at Nordstrom and if buy a blouse, the next time I log into Nordstrom, they’re going to tell me what jeans, shoes, necklaces, earrings, hat, purse, go with that blouse. When a buyer comes to our website for the first time, I don’t know what experience they have in our industry. So once we get their information and they fill out a lead form, I can then go back and see all of their behavior and all the moves they’ve made, so that I can tailor and personalize the next interaction. And so, it’s really powerful, so we spend a lot of time. We actually have marketing data analysts on our team that help us do that, and to take real time. I mean, we have so much data, that if we didn’t have someone really culling through it and helping us inform our next move, I don’t know that we’d be able to get through it all on our own.
Dean Wehrli:
Right. That makes sense. There is just so much more data than there was all those years ago, that the fake numbers they’re making up then can now be very reality based.
Stephanie McCarty:
Well, and I think it’s really strategic. Vanity metrics, impressions, views, those are great, but what does that mean? How does that translate sales and conversions? And so it’s a leading indicator of the other, so we pay attention to it, but we just don’t put a ton of weight into those.
Dean Wehrli:
Okay, okay. Let’s talk about internal sort of platforms and tactics. Online sales, I mean, that’s become huge and is very, very critical. I mean, you see the growth. It almost seems the last two or three years really has been almost exponential in terms of how important that’s become and how builders are trying to funnel buyers toward that experience. Do you see that just continuing to expand where people want more and more, literally, buy a home online, choose their options, et cetera online?
Stephanie McCarty:
I do. I’m actually, acutally very convicted in my belief that the builders who provide that as an option will have an advantage over those who don’t. Will every consumer want to buy their house that way? No, but there are consumers who will go out of their way to avoid talking to a salesperson. If that’s the way that they want to shop, then we have to embrace that and enable a process that lets them feel comfortable, lets them feel in control. I think our salespeople, it was frightening at first, but I think COVID really accelerated the need and the fact that, “Hey, we can do things differently and more digitally, and there can be an online shopping experience that’s very enjoyable, builds on the brand relationship.”
In my purview, my perspective, I think there will always be a place for salespeople, there will always be a place for having a relationship. To your point, it’s not a easy, quick process, especially if you’re doing a to-be-built home. That’s a long journey, and you want a relationship. You want a person, but I think before you made that decision, you might not need a person. I say, a lot of times, people will go into the community to validate what we have told them is to be true online, and that’s when they start a conversation with a salesperson, and today they’re going in there to sign a contract, right? To get things done, to validate that, “Yes, this community is exactly as it was portrayed to me or this home was. I want this home.” At Taylor Morrison, we have an online reservation system that allows people to put $100 down on a home and essentially kind of take it off the market.
It is a tremendous closing tool for our sales team and for our consumers. They have some control. You can pick your structural options. You can go from, “I want this lot, I want this floor plan on this lot. I want to tailor it to my personal needs by adding these structural options,” and along the way, the price point is very visible, right? You add this, here’s what it costs, and it’s kind of like TurboTax at the end. You know how much you’re either in the hole or how much you’re going to get in April, and it moves along with you as you’re making these decisions. That tool, we see the greatest use of that tool, Dean, late at night, in the middle of the night, at five in the morning. It’s not when our sales offices are open, so think about all those interactions that we wouldn’t have, we wouldn’t be able to have if we didn’t have that, so I do see it as a big part of our future for the industry,
Dean Wehrli:
But do you see it as kind of a hybrid model? That is, where a lot of people don’t want to talk to sales agents until they do. And that, at some point, they go, “I just have questions,” or “I do need someone to guide me,” so do you see that sales agents will still be there for indefinitely?
Stephanie McCarty:
I do. I do. I think my hope is that sales just feels so, I mean, it just feels so pressure inducing, and it gives me anxiety too. I am a millennial, and I don’t like to be sold to, but I really do think it’s more around customer advocacy, relationships, and educating, because there’s a lot of consumers that they don’t even consider new home construction, because it’s just so complicated and overwhelming. So I think a big rule for marketers, too, is how do you take that overwhelming process and make it less overwhelming into bite-size, little chewable pieces that make a consumer feel like, “Oh. I can do this,” and when I’m at the point where I’ve done all my extensive research online, but there’s this one area that I just can’t figure out, that salesperson is going to be extremely important at that point, because I think what you said was perfect; they don’t want to talk to a salesperson until they do.
Dean Wehrli:
Another thing that COVID accelerated was virtual reality, and people started going online, looking at things. I’ll be honest with you, I don’t know how that’s going right now. It seems like it got a little bit stunted after COVID kind of brought it to the fore. How do you see models versus virtual models? How do you see that part of it going in the future?
Stephanie McCarty:
Personally, I’d like to see the technology continue to advance. I agree that it’s necessary, and we have a lot of it on our website as well. I think consumers, it doesn’t have to be perfect, right? They just need to be able to see enough to understand. So my hope, one, is that the technology in our space continues to advance. I know there’s several companies out there that are working on that, and that’s going to be a big differentiator. From a model perspective, it’s very expensive for builders to be out modeled, to have too many models.
So I do see a future where we don’t have as many and we can push some of that online. I also think the way a model lives, there’s ways that home builders can reduce those costs with just thinking about the model home sales office experience, because I do think that they’re necessary, but if you think of a builder as big as us, and we have hundreds of floor plans, we can’t build that many models. So there will always be, in my mind, a reason to have both, but I do think when the technology advances and the consumer becomes more comfortable with that experience, which they are, the need for models will lessen.
Dean Wehrli:
Yeah, I think so too. Speaking of models, great segue. Let’s take a brief little side trek into a couple of your brands, both the age-qualified brand, the Esplanade you mentioned earlier, and also your built-to-rent brand, Yardly, and then we’ll do our deep dive into buyer segments. I mean, if anybody is going to hold on and want to see models, don’t you think it’s probably that 55-plus buyer? How’s your experience so far with Esplanade, your foray into that 55-plus world?
Stephanie McCarty:
I mean, Esplanade, for us right now, is really, really large and very deep in Florida, and so we have a lot of key learnings. We know what works for that buyer. It’s an experience, right? They want to look, see, feel, touch, smell what the community is. They want to know how it lives. It’s about the lifestyle, it’s about the programming. I don’t see that changing much. That model, it’s working. That said, I don’t want to take away the notion that boomers are not tech-savvy, because they are, and they do a lot of research online too. So they’re using those tools, just like your millennials and your gen Zs are.
That said, the sales experience and the sales center for Esplanade, it’s much more in depth, and I think it’s fitting, considering that consumer segment. It’s a big part of our business, and we’re growing that brand outside of Florida. We’ve got a couple communities in California that are performing really well. Esplanade has made its debut in Charlotte. There’s a lot of different markets that are trying out their Esplanade, and it’s a big ticket purchase, and it’s got a great margin, and a lot of times, they get really happy in the design center, right? So it’s a great product, a great-
Dean Wehrli:
They’re famous for that. Yeah, yeah.
Stephanie McCarty:
Yeah, but then on the other side, we know that America’s in this affordability crisis, and there are people who just can’t afford a home today, and so we are a couple of years into our journey with Yardly, which is our for rent, which is providing these horizontal, apartment like living experiences for people who aren’t yet ready, can’t qualify, or need more time to save for their future home, and it’s solving part of that missing middle and that affordability piece. And selfishly, gosh, they’re now beginning a relationship with the builder and the quality that can feed right into our core business and our for sale brand. So it’s early days for that brand, but we’re already seeing great success and interest from consumers.
Dean Wehrli:
Nice. And you’re focusing more on kind of the smaller… What are your typical bedroom count and rough home size for the Yardly product?
Stephanie McCarty:
Yardly, they’re two bedroom, two bath, and they’re roughly around 1000, right? But they’ve got their backyard. They’re very pet friendly. They come with a dog door, so you still have that home. It lives like a home, right? You don’t have anyone above you or beneath you, and so I think that is working, and I know there’s other builders who are venturing into that as well.
Dean Wehrli:
Oh, yeah.
Stephanie McCarty:
We get a lot of really great feedback on that product.
Dean Wehrli:
That’s good. Yeah, it is. I mean, that’s the key. In my mind, the build-to-rent, the BTR world, traditionally, it offered that more family friendly living that apartments kind did not, and it usually offered a larger bedroom count. You’re going for that other model, like you said, the horizontal apartment model, where now the key difference from apartments is there’s no one above you and no one below you, and that’s massively important for a lot of folks out there.
Stephanie McCarty:
I wish that existed when I was renting, right? I mean, I just have horror stories from renting from all the neighbor. So yeah, we’re solving that problem for our renters, and so much is about the pet experience too. Dog door and a backyard, you don’t get that too with renting.
Dean Wehrli:
I love that differentiation, because that is one of the key things too. Every apartment complex says their dog friendly. What that means is they have a little faucet, washing station somewhere out in the back, in an alley or something like that. I guess you are, but-
Stephanie McCarty:
–for an additional cost, you know what I mean?
Dean Wehrli:
Yeah, yeah. That’s true. That’s true. So let’s do our deep dive into buyers, buyer segments, buyer types are, and I think I know the answer because I know you guys are pretty omnivorous, but what are those key buyer segments for Taylor Morrison as a whole?
Stephanie McCarty:
We have, I think, seven different definitions of consumers that run the gamut for, really, how they’re living. How many people are living? Do they have children? Do they not have children? If I think about it purely from a generational perspective, I think today we’re seeing half of our buyers are in the millennial category in that part of their life. They’re not necessarily first time buyers though. They’re second time buyers. Some have kids, some don’t. But the boomers are a huge subset of our buyers as well, and then those Gen Zs.
So we really do, like I said earlier, fit a wide variety of consumers, which means our product evolution, how we communicate, the products we offer online really do need to be quite vast in order to really be positioned as we have something for everybody, which sometimes I envy the builders that only have one product, one strength, and you can really go all in on that. But again, I think it’s something that benefits us to have that strength and to be able to flex on that whole bar ball of different consumer generations, wants, and desires.
Dean Wehrli:
I should know this, and I know you very well here, where I am in northern California, but how urban will you go? Are you tapping into the urban buyer at all, or is that one of those niches you kind of leave alone?
Stephanie McCarty:
I think it depends on the market, because we are in the Bay Area. We’re in Portland. We are Seattle, which is quite different than maybe a Dallas or Naples. But here, Arizona, one of our largest markets. I mean, we’ve got 52 communities here in Phoenix.
Dean Wehrli:
Wow.
Stephanie McCarty:
And it touches every single one of those buyer groups, depending on size, price, and where in the area. Some, you have to drive. Some are not too far from the airport. So I really do think, depending on the market, we will.
Dean Wehrli:
Are you big on looking at those consumer preferences? Are you serving? Are you doing focus groups? Is that part of your methodology?
Stephanie McCarty:
All of the above. We do a lot of surveys on the shopper experience, on the buy experience. Now that we’ve introduced new digital touchpoints, we do a lot of user research on the website, right? What are they doing? What makes sense? We compare our website to others. We’re doing research there, and that’s pretty new for our organization. We’ve been doing a lot of that in the last 18 to 24 months to really have an understanding of how consumers are navigating the website experience, what works and what doesn’t. But certainly our marketing intelligence team, we have very robust surveys on the shopper side and buyer side, and a lot of that data is informing our next move and iterating strategies for the future.
Dean Wehrli:
Are you using that same kind of data to make sure you’re truly targeting who you want to target? I’ve always wondered about that. “We think these buyers, for this product in this location, are going to be,” like you said, “Gen Z. Here’s the age. They’re going to be singles and couples, whatever. Young families.” How do you really make sure that, as finely as you can, you’re targeting those buyers?
Stephanie McCarty:
It’s a good question. I know that when we underwrite a deal, and we get very specific on who that buyer is, man, when you get it right, it is like magic, right?
Dean Wehrli:
Yeah.
Stephanie McCarty:
It’s like unicorns, rainbows, sprinkles, and all the above. When you get it, I mean, it’s the exact opposite, right? It’s just a total and utter disaster. So I think the process of really identifying your product, how it lives, I mean, all that comes with lots of data, research and knowing, being very smart in the operating world, and then having a marketing playbook for that consumer, right? Knowing what works, but being also humble enough to know that that evolves, and that consumer, you can’t paint it with one brush. I think we did it a lot with the millennials, right? They’re lazy. They live on mom and dad’s couch. I mean, you can’t stereotype an entire generation, and the same is true for the Gen Zs that are coming up and the alphas behind them, but we have a playbook, and it gets rinsed off, and it gets re-looked at. It evolves, so I think it’s just a big part of the strategy. Marketing, in my view, has got to have a seat at the table when we bring those land deals to the conversation and consideration.
Dean Wehrli:
I would sure hope so. Otherwise, it would be kind nuts. Are there regional differences? A minute ago I asked you about the regional differences in terms of sales marketing, kind of almost the other direction. Here in America, it seems like we’re always trying to divide each other as much as we can, which is silly, but are we really more like across the country, in your experience, than not? In other words, the same kind of outreach you do in one location is likely to work in a different part of the country as well.
Stephanie McCarty:
Yeah, I would tell you that I think the channels and the media that works, it works, right? I don’t think we say we’re going to do this in Arizona, but it wouldn’t work in Washington or Oregon, and that’s true. I do think sometimes it fluctuates based on consumer. Where I really think the outlier is that age qualified resort lifestyle, because it’s just a different living experience, right? It’s, typically, a higher price point. They’ve got an HOA that’s more expensive than a traditional community, so it’s a longer nurturing process, and there’s different tactics and levers that we pull. Outside of that. I would say we’re more alike than we are different.
Dean Wehrli:
Okay. I’m always glad to hear that.
Stephanie McCarty:
Me too.
Dean Wehrli:
Okay. Let’s end with the lightning round on buyer segments. Just top of your head, I’m going to say something like, “Young singles.” In your experience, what’s the one thing we should think about in terms of young singles, and what’s important to them in buying a home? You’re on the hot seat, but hey.
Stephanie McCarty:
I mean, flexibility, right? That person, that buyer, they’re thinking about today, but they’re also probably thinking about the future, right? So I think flexibility.
Dean Wehrli:
Yeah, okay. Young families now.
Stephanie McCarty:
Open space, very intentional floor plans, especially young families. I think mothers and fathers don’t want a split floor plan. They don’t their bedrooms on the other side of the house. They want to hear that young child when they need mommy and daddy.
Dean Wehrli:
Yeah. Mature families, then. The opposite, still families, but now 10 years older, 15 years older,
Stephanie McCarty:
Split floor plans. They want the big kids on the other side of the house. They don’t want to hear them.
Dean Wehrli:
Could not agree more.
Stephanie McCarty:
Game rooms, yeah. Indoor-outdoor living. Yeah.
Dean Wehrli:
I mean, they’re not going to come downstairs anyway, but how about professional couples? The classic dual income, no kids, the dinks. What’s the hot ticket for those folks?
Stephanie McCarty:
Gosh, I think entertain, right? They want a house that they can show off to their friends. They want to entertain. They want to live in a vibrant community, close by great restaurants, and activities, and things to do.
Dean Wehrli:
Yeah. Last one, empty nesters, retirees. Should we separate those? Are those more or less the same to you, or you do separate those two categories?
Stephanie McCarty:
I think this is probably the one that I think is changing the most. I don’t know that they really are downsizing quite as much as they were in the past. They want to have enough bedrooms for the grandkids to come back in. We were just at our Esplanade Turkey Creek in Sacramento, and some of those homes are really big, and it’s because they also like to entertain and bring their friends over. They want their grandkids to have a space, so I think they’ve probably, in my view, have probably changed the most, from a product perspective and how they live. I akin to Golden Girls, right? Those were portraying 55, 60-year-old women. The 55-year-old, 60-year-old women I know today don’t look like that. They’re active. They’re living their best life, right? They have disposable income. They are comfortable. They know who they are and they know what they want. And I think that’s much different than how we’ve painted that group in the past.
Dean Wehrli:
That’s interesting. I think you’re absolutely right, if you think about it. I mean, those folks, they have a lot of stuff they’ve accumulated. You need some place to put it, and you’re right. One of those big draws, specifically for the age qualified, is moving sometimes. Like in Northern California, from the Bay Area to the Sacramento area, because that’s where their kids or grandkids have moved already.
Stephanie McCarty:
Following their children. Absolutely.
Dean Wehrli:
Yeah, okay. That was fantastic. Stephanie, that was very, very helpful. This has been fantastic. I really enjoyed having you on.
Stephanie McCarty:
Me too. I appreciate the invite. This was really fun.
Dean Wehrli:
Absolutely. Thanks for listening everyone. This is your host, Dean Wehrli, for the New Home Insights podcast. We’ll see you again in a couple of weeks.
