TM
july/august 2011
the sales and marketing magazine of the housing industry
Canada
oh Canada The Red-Hot Northern Market
Plus Published by the National Association of Home Builders US Price $9.95 Canadian/Foreign Price $12.25 www.smimagazine.com
Double-Duty Spaces Road Map for Winning Sales Teams
Mike Lalich Photographer
A charcoal and citron-striped wall treatment create a vibrant and bold statement at City Centre in Kitchener, Ontario.
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By Doris Pearlman, MIRM
Canada, Oh
Canada: The Red-Hot Northern Market
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s an interior designer and merchandiser and obsessive design aficionado, when traveling north of the border, I found Canada’s market extraordinarily vibrant. The interview and subsequent article helps shed light on the sizzling greater Toronto market. Particularly in the Greater Ontario area, condo sales are red hot right now. So hot, in fact, that it has some observers wondering what lessons U.S. builders and marketers can take away from our neighbors to the north.
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Canada, Oh Canada
Between 2030 and 2040, the greater metropolitan area will need 90,000 housing units, according to demographic projections.
The Canadian Market: Strong and Resilient What makes the economic situation in Canada so unique? I asked Peter Comyns, sales manager for PMA Brethour, one of Canada's leading real estate firms for research, marketing, and new home sales. He explains, “When most of the world’s markets crashed after 2007, Canada’s housing market experienced a relatively short eight-month downturn, causing investors worldwide to turn there for a safe haven. The Canadian banking system was regulated to a greater degree, creating less post-housing-boom chaos.” He cites stricter lending requirements governing qualifications and down payments, and unlike in some U.S. markets, home equity loans were not flowing like the Niagara River! Throughout 2000 through 2008, there was less rapid price escalation in Canada than in many U.S. markets. The result is a softer landing, with current levels now above that of September 2008. Immigration is another factor, adds Comyns. Canada has been and is continuing to attract a steady, educated immigrant work force, with 200,000 coming into Canada per year; sixty percent of those, roughly 120,000, are flooding into Toronto alone. With high-tech companies such as Google and RIM (the maker of BlackBerry®) locating corporate campuses in the Toronto area, the market is well positioned to gobble
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up a steady diet of new homes. The rental market alone for Toronto was 22,000 units this year, which is attracting investors at a steady pace. In total, between 2030 and 2040, the greater metropolitan area will need 90,000 housing units, according to demographic projections.
A Recipe for Success Take one healthy market ripe for growth, add a suburb on the cusp of revitalization, and stir. Your result would be something close to Kitchener, Ontario. To get a closer look at this market, we turned again to Comyns and to Anne Marchildon, vice president of sales and marketing for Andrin Limited. Andrin has recently completed one successful condo community in Kitchener, and in February of this year, opened a sales pavilion for a second one called City Centre. What attracted Andrin to this former industrial town with a once-crumbling center? Marchildon explains: “Kitchener, located one hour outside of Toronto, is quickly morphing into a favorite hub of high-tech companies, university students, and others wishing to escape Toronto’s traffic and high prices.” Comyns adds that Kitchener could be described as a smaller, bolder university town, home of campuses for both Wilfrid Laurier University and the University of Waterloo. Kitchener has been called the “Silicon Valley of the North,” and RIM recently
announced it had 600 positions to fill there. It is not uncommon, he says, for residents of Kitchener to travel to the more well-known Silicon Valley of northern California on a regular basis. Marchildon says that downtown Kitchener is designated as a Building Improvement Area (BIA), and locals and businesses are committed to redeveloping the central business district. This location and amenable business environment led Andrin Homes to choose Kitchener for these two recent projects. City Centre is an endeavor between Andrin, the city of Kitchener, and the BIA. The project also will include retail space, a café, a gallery, public and private parking, and a rehab of an historic boutique hotel. Located on what used to be known as City Block, in the heart of downtown Kitchener, City Centre when complete will house 400 units in two towers, says Marchildon. Construction will begin after 80% of the building is sold, another common lending requirement for our neighbors to the north. The 3,500-squarefoot sales pavilion showcases two fully furnished model suites and a 2000-square-foot presentation and sales area. Marchildon explains that because the prospective buyer at City Centre is tech-savvy and environmentally conscious, sales center displays emphasize flexible floor plans, green features, and high-tech living. Within www.smimagazine.com
the garage parking structure are accommodations for electric cars, another feature the marketing team foresaw being important to this contemporary buyer. Starting price for the homes is $189,900, averaging just under $350,000.
According to Marchildon, the target market at City Centre is predominantly young professionals, singles and couples, together with some move-down cash-out and investor buyers. Kitchener, while a suburb in the Toronto SMA, attracts all of these buyers, with the commonality being their desire to live in a vibrant neo-urban environment, but a casual one—new urbanism in a vintage setting. Comyns weighs in: “Regentrification is what it’s all about.” The consumer here has a decidedly urban sensibility, adds John Limiero, head designer for Possibilities for Design, who merchandised the model suites. Yet these buyers have a need to live outside the traditional urban box of nearby Toronto. These customers could be described as “the West Elm/Crate & Barrel” buyer, he adds, evoking the catalog’s contemporary appeal. It was this direction that the marketing team decided upon after reviewing the market research and demographics of the area. Marchildon explains, “The positioning statement for City www.smimagazine.com
Every bedroom at Andrin’s City Centre provided a dramatic focal point, like this unique headboard treatment and mulberry-colored wall.
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Mike Lalich Photographer
Selling Urban Living in a Suburban Setting
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This command center in the hallway is a perfect example of small space well used.
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Canada, Oh Canada As spaces shrink, concessions must be made to accommodate function and livability.
Centre is ‘smarter living,’ and that includes its relaxed downtown location in close proximity to employment, transit, shopping, and entertainment. Floor plan designs make the most of the space, incorporating additions such as a command center in a hallway and rooms that serve a multiplicity of uses. “Demonstrating flexibility is key in the Canadian market,” says Limiero. At City Centre, Andrin made a decision to offer, as standard, appointments like granite countertops, stainless steel kitchen appliances, energyefficient front loading laundry centers, and upgraded baths in order to compete for the attention of this young, techno-hip buyer. “We wanted to, not only meet, but to exceed, the expectations of this buyer, and that’s what we did,” adds Marchildon. To promote the project as a cutting-edge community for techsavvy home owners, an audio/ video wiring package allows residents to tie their Smart Phones and tablets into their in-home AV systems, a move that has been extraordinarily well received, says Marchildon. The sales team has been a crucial part of City Centre’s success as well. “A strong sales team is critical as it is a large multi-faceted project,” says Marchildon. Sales are managed by Comyns and PMA Brethour. Reliance on the broker community alone was www.smimagazine.com
not an option: “The co-broke market in Kitchener/Waterloo is much less entrenched and sophisticated than that of the Greater Toronto Area, and the effectiveness of your on-site team is critical to the overall success of the project.”
Showcasing Lifestyle— the Canadian Way Marchildon believes another part of City Centre’s success is the model home merchandising team’s ability to interpret correctly the needs of the new downtown Kitchener consumer. To say “comfortable” with technology would be an understatement, as these young marrieds and singles are tied to their iPhones, Blackberries, iPads, and laptops around the clock. Sustainable living is important, but most important was making the most of these small homes. These downtown dwellers are used to making the most of their spaces. Floor plans at City Centre range from 510 to 1150 square feet, so the builder’s objective was to create functionality and livability. The marketing team opted to show two models, the smaller of which, at 680 square feet with one bedroom plus a den, to be targeted toward singles. The second, at 915 square feet with two bedrooms and a command center, was geared to young marrieds, and was given a slightly more sophisticated feel.
The U.S. merchandising team paid careful attention to their Canadian counterparts’ needs. “The U.S. playbook needed to be adjusted to fit this market,” says Limiero. “Spaces tend to be even tighter than in many U.S. condo markets, and as spaces shrink, concessions must be made to accommodate function and livability.” Scale becomes paramount, but that scale must still be smart. Marchildon, when giving direction to the merchandising team, insisted for example, that a sofa be at least 72 to 84 inches in order to accommodate three people. And Limiero notes that while U.S. markets are seeing a strong trend toward contemporary designs, it has been the ruling style in Canadian markets for the last four or five years. Another question which people have asked was “Why a U.S. firm? Limiero’s answer is “we can provide a new look for an already design savvy market which can further set our client apart from the competition.” Functionality at City Centre had to be demonstrated in the models in a thoughtful, clever way. Both models feature a small dining table that can serve a variety of needs, such as a sit-down formal dinner, a buffet surface for a party, or a study space. This type of flexibility is proving to be a significant marketing advantage, as many competing condos in the Greater Toronto area offer space for a dining table. J u ly / a u g u s t 2 0 1 1
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Canada, Oh Canada
A Vancouver Builder Uses CRM for a 360-degree View
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t takes more than luck to glean success from what is, by most accounts, a tough economy. Home builders are no different when it comes to razor-sharp profit margins and stiff competition in the Canadian marketplace. Steve Sammut, chief financial officer for Intracorp, discusses some of the elements contributing to success in today’s market. We’ve been fortunate. While the rest of North America succumbed to housing woes, the Vancouver market took a relatively minor dip before bouncing right back. Real estate prices in many areas are actually above where they were at the peak prior to the global economic meltdown. I wouldn’t go so far as to say that business is booming, but it is brisk. But we can’t just rely on the market – to be successful we have to control what we can, and one of those things is our customer relationships. As a home builder, part of staying on top is to continue to engage customers throughout the phases of their lives. Intracorp leverages technology to automate certain processes and free up resources to focus on strategic initiatives. Some of our key CRM initiatives include the following.
Customer Experience The customer experience is extremely important. We have a team using Pivotal CRM to closely manage this process. The technology gives us a great deal of insight regarding each customer, which is not only valuable for building relationships, but also in developing our sales strategies. When you’re building a home for someone, you want to make sure you’re delivering what you’ve promised at the front end. Our customer experience team is focused on ensuring that it’s a good experience from the decision to purchase a home, through to the client accepting the keys to that home, and for years to come. We work hard to make sure that the home is in excellent shape. If there are any issues, we address them quickly.
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Communication It’s important to have customized communications channels. We have a dedicated phone line for people to call if they have questions or if they need to raise an issue with our customer experience team. But we also communicate proactively, via automated email blasts updating customers on the project status or inviting them to participate in brief surveys that allow us to better understand their feelings and needs.
To be successful we have to control what we can...our customer relationships. We want to ensure that our customer base is regularly informed regarding what we are up to, even if the projects don’t relate to them directly. Awareness is critical, and our reputation is everything.
Sales Automation Automation of the sales process hugely reduces the administrative time to finalize the contracts. It allows us to streamline the process and handle much larger volumes. For example, if we’re launching a big project like our 342-unit MetroPlace project in Burnaby, there will be a substantive number of people writing contracts simultaneously. Using the CRM, we can handle those large volumes, and at the same time, eliminate those costly manual errors that tend to occur through manual processes. It comes down to gaining efficiencies wherever possible and, in addition to people and processes, technology is key. We’ve experienced a lot of success with processes we’ve streamlined through CRM. Any developer in Vancouver will attribute some success to the fact that the market here has been relatively stable, but since we can’t control the market, we look to the things we can control – our customer relationships, our internal processes, our sales strategies, and of course, developing a solid product.
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Squeezing every bit of functionality out of the petit spaces became a merchandising mission.
Creating Memorability To create memorability in today’s contemporary market, don’t rule out a traditional tool that is coming back into vogue—wallpaper. But it’s not your mother’s wallpaper! Not just for kitchens and baths, and no longer sporting fruit or seashells, wallcoverings with
quiet geometric patterns are being used to create subtle tonality. Surprisingly, it has worked beautifully in small homes in both U.S. and Canadian markets. At City Centre, white-on-white wallpaper was used on a bedroom accent wall to create depth and interest. In fact, every bedroom wall modeled
Flexibility at City Centre allows this home office to be used just as easily as a formal dining room or a guest room.
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at City Centre sported a memory point, such as a headboard conceived out of white metallic circles contrasting against a mulberry brown wall, which created depth and uniqueness. Hard-working, high-contrast paint details are also creating great impact in the City Centre models, as demonstrated by a gray and yellow horizontal paint-stripe treatment designed for a dining/ living room wall. The stripe also unites and visually magnifies the two spaces and ensures a focal point that buyers are sure to talk about. “It was important to create a vibrant and bold statement for this young buyer,” says Limiero. Squeezing every bit of functionality out of the petit spaces became a merchandising mission. A technology niche was carved out of a hallway providing a place for plug-ins, docking stations, and email checks. A home office could be utilized as a formal dining room or a guest room. “It was important that we demonstrate the livability of condominium apartment spaces and the flexibility of those spaces to accommodate a wide variety of lifestyle needs,” says Marchildon. Construction of the residential units is expected to begin in the spring of 2012. Until then, sales have been steady at City Centre, where marketers and merchandisers have not only learned to think outside of the box, but have turned the box upside down! smı J u ly / a u g u s t 2 0 1 1
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