This A.I. Taps Every Tool, Tactic Needed To Win In Spring Selling

A conversation yesterday with United Homes Group Chairman and CEO Michael Nieri gravitated where discussions of outlier homebuilder business success tend to land, no matter where they take off.

We're trying to do all the things that we and the other guys have seen and learned over the last 15 years," Michael told us. "At the same time, we're trying to put ourselves in a position not to make the same mistakes that can take you out, so to speak."

The topic heading might be a mergers and acquisitions deal, as was the context of Michael Nieri's remarks yesterday, or it may be any other siloed area that falls within the homebuilding value cycle – from investment to development, from design to purchasing and supply chain strategy, and from construction operations to customer care, community management, mortgage lending, and marketing and sales – the principle Nieri speaks of applies across the board.

At this time – or any other – people in homebuilding always and forever have more to learn than they already know. What's more, part of what they seem always to have to learn to survive, thrive, and durably prosper is not to forget what they already know. In Nieri's own words: "to put ourselves in a position not to make the same mistakes that can take you out, so to speak."

At this time, uncertainties outnumber what we can reliably predict. Business and investment strategies need to flex and hedge rather than plunge all in on one scenario versus another. As time counts down the days to Monday, February 12, following Super Bowl LVIII in Miami – the unofficial official onset of homebuilding's 2024 moment-of-truth Selling Season – Nieri's words ring loud and true.

With so much at stake and so much up in the air, are homebuilder strategists and operators willing to leave their fate to the chance that in 2024 a rising tide will lift all ships? What better moment to lean into the deep collective wisdom of business achievers, past and present, and stand on their shoulders, both to avoid costly missteps and to jump on early opportunities to excel? Learning from past mistakes, learning what works best, and learning what engaging, nurturing, and co-piloting tools, tactics, and solutions will best apply for as many instances and examples as homebuilding marketing and sales team members will encounter – and doing all that in a volatile, dynamic real-time context – has taken on urgency, Chris Laskowski, Director of Marketing at New Home Star, tells me in our inaugural TBD Player, video and podcast series on The Builder's Daily.

The complexities of the economy, how homes are being sold and marketed, and the overall strategic direction of any company involves so much data," Laskowski tells The Builder's Daily in TBD Player, Episode One, The Future Of Homebuilding Institutional Knowledge and Why. "There's a lot of information coming in. That creates ambiguity for smaller and midsize builders. New technologies are impacting homebuilder operations, and their ability to navigate trends with rigor and agility will separate the best builders from the rest of the pack."

Laskowski and his teammates at New Home Star believe that this Spring Selling season may start to stress-test exactly the marketing and sales tools and tactics that powered homebuilders to a better-than-expected 2023 – namely, mortgage buydowns as the go-to catalyst – and call for a smarter, more nuanced, more targeted approach to solutions that draw on a deeper, fuller, more case-specific repertoire that can go into action in real-time.

What A.I. does is it helps level the playing field in this competitive landscape," Laskowski says. "We've always liked to look at things in terms of what's happening on the demand side and what's happening on the supply side. Right now, on the demand side, we're seeing consumers continue to struggle with affordability due to elevated interest rates. That's decreased the size of the pie. What's more, the economics of rent-versus-own flipped: It used to be half the cost to buy a new home versus renting; now it's doubled. Inflation continues to erode wage growth and buying power. A weak real estate market performance has decreased consumer confidence among buyers, and higher-for-longer interest rates have a holistic impact. So there are a lot of changes in demand. Fewer people can purchase homes, or they have to buy less desirable housing for their needs. Then when piling on top of that the changes that we're seeing on the supply side, housing sales decreased in 2023."

In that context, Laskowski says, immediate and micro-market relevant access to a rich, dynamic canon of wisdom, ideas, and practices truly can level the playing field at a moment trends and sentiment appear ready to turn on a dime.

What we've seen traditionally for institutional knowledge to be more effective has been either a repository specialist who would archive, organize, and distribute strategy and information among companies that would typically rely on a folder system," Laskowski says. "Then we saw a shift with modern learning management systems, which were better in terms of a UI/UX interface, but still time-consuming to manage the overall platform and still expensive. What we're seeing now is a rapid evolution into having A.I. do all of this work to compile, store, and disseminate the knowledge. It's easier, it's cheaper, it's faster, and it's leading to more effective operations and strategies. By having that type of advantage over other builders – by having that institutional knowledge at the fingertips of every level of the organization – it helps the customer journey, and it helps customers have a better sales experience."

How exactly can an A.I. hack into and mine this well of wisdom on a company level, and how might that scope and scale to include a collective home-builder-sector-wide well of solutions and tactics to draw from? Over the last decade, New Home Star built a specialized LMS and sales enablement platform specifically for new home sales. Over time, the platform expanded to 500 training video modules, based on peer learning questions that resulted from agents asking different challenges. In all, about 50,000 of those questions resulted in 400,000 answers in the New Home Star LMS, including training topics with executive leadership, and 50 separate training manuals. When ChatGPT released its store app, New Home Star leveraged its technology with New Home Star data and made it available in a ChatGPT interface.

As we look out into the future, a better marketing interaction with buyers by having more personalized content, better selection, and even improving the existing operations of the builder through the use of AI," Laskowski says. "All of that is possible, and most importantly, having a resource that shares that knowledge, shares what the customer experience should look like at your organization is going to be so powerful."

Christian Gomez, a front-end development specialist at New Home Star notes that with the emergence of ChatGPT, models have been developed by the community that can take video and convert that into text representation, which can then be converted into a vector format that can enable ChatGPT to understand and interpret that knowledge.

It's an explosion of tools that have come out that enable developers to introduce it into their workflow or their knowledge base," says Gomez.

To any question as to whether this capability is relevant here and now, "precisely at this moment," or whether it's a housing-of-the-future construct, here's what New Home Star's Chris Laskowski tells me.

The first use case is training your organization," says Laskowski. "It's being able to tap into resources and strategies that we already had built out. When someone on the sales floor, or maybe in the purchasing department, has a question on what is the best way to market to a very small realtor community to drive that incremental traffic, you're essentially talking to hundreds and hundreds of individuals spanning hundreds and hundreds of years of experience. You're getting live training on that particular topic. You can upload publicly available and even economic data. You can upload past conversations that we've had as a leadership group – i.e. in a particular situation, what do you do? What are your recommendations? Number three, it can have uses as a company directory. We've uploaded our company directory. If someone wants to talk to human resources, they type in that prompt, and it shows them exactly who they need to talk to, and their contact information. A big part of all of this is just being able to effectively catalog your insight as an organization. That's such a huge asset that any company has. You're growing every single day. So, this is about being able to tap into that growth in a split second."

That's how organizations – and homebuilding itself – can learn more than it ever knew, and spend the time learning to adopt to new challenges rather than making the same old mistakes others made in the past.