Empire Communities’ Marketing Insights: The Art of Selling Lifestyle

Podcast
Caroline Simmel of Empire Communities joins our podcast to discuss the importance of data-driven strategies and the integration of sales and marketing for effective customer engagement.

Featured guest

Caroline Simmel, Senior Vice President of Sales and Marketing, Empire Communities

Transcript

Dean Wehrli:

Hello everyone. I’m Dean Wehrli for the New Home Insights podcast. In our last episode, we had Stephanie McCarty from Taylor Morrison Homes join us to talk all things sales and marketing from a home builder’s perspective. I want even more of that. I hope you, the listener, do too. Because today, we’re going to go back into the sales and marketing, tactics and strategies and all that fun stuff, but we’re going to do it a little differently, not just a different perspective in terms of a different builder, but a different perspective in terms of a private builder.

So today, we have Caroline Simmel. She’s the Senior Vice President of sales and marketing for the Georgia and Tennessee regions at Empire Communities. Empire is a Toronto-based builder, one of the biggest private builders in the country, with a huge Sunbelt footprint that stretches from Carolinas through Texas, and of course also in the very non-Sunbelt Toronto and Southwest Ontario area, but I’ll let Caroline tell you a little bit more about that in just a second. First, Caroline, how are you doing?

Caroline Simmel:

I’m great. Thank you for having me on.

Dean Wehrli:

I’m really glad you’re here. So I do want to… We’ll ask a lot of the similar questions, not all, but similar questions that if you listen or listened to the last episode, but I think we’ll get a very different perspective on some of those. So let’s start, though, with you. Caroline, give us a little bit about your background and also with Empire Communities.

Caroline Simmel:

Sure. Well, I have been with this company almost 17 years. We started out as Edward Andrews Homes, an Atlanta based company. We grew from I think we started with 12 homes in 2007. We grew into close to 500, and then we merged with Empire back in 2018 and it’s been fantastic. They’re wonderful partners and it’s really been seamless, the whole experience.

Dean Wehrli:

So they’re a Canadian firm. Should we be drinking some Molson Ale right now as we do this?

Caroline Simmel:

Yes, definitely.

Dean Wehrli:

Or some Moosehead perhaps are some Labatt Blue, Big Rock, Red Racer IPA, and my favorite, La Fin du Monde, which means end of the world. Did I Google Canadian beers? It’s very possible that I did to get all those.

Caroline Simmel:

I love it. Well, and it’s a family owned and operated company and they’re Italian, so we’re more into the finer red wines.

Dean Wehrli:

Oh, okay. Okay. I’m with you there too. I’m either way. I like red wine and IPA. So let’s start with one of the big questions, one of those just kind of holistic questions about sales and marketing, which is what is, in your opinion, the difference between sales and marketing?

Caroline Simmel:

Well, there is a difference. They are two distinct but very closely related functions that work together with the ultimate goal of enhancing the customer experience and driving revenue. But that said, it’s two distinct skill sets but it’s a productive degree of collaboration between the two skill sets, and it’s really a departure from the old school way in home building where it’s them against us, us against them. I need more traffic, I need more sales, finger pointing, all of that. We at Empire have merged the two departments but in a very intentional way, and we call it sales enablement. But again, simply put, marketing brings certainty through content and strategy, and sales bring the motivation to make the purchase, the change.

Dean Wehrli:

Okay. And so there would be those internal things. I mean, not at Empire and not at Edward Andrews, but you know, the sales folks would go, “Hey, bring us more folks. We can sell more homes.” And the marketing folks would be like, “Well, you need to complete the sale.” That kind of antagonism, that’s not the right word, but that kind of tension went on.

Caroline Simmel:

Right. Well, it’s just really old school, and our corporate marketing team also compliments us very well. They’re really the center of excellence for the brand. They support us in all the tech enhancements we need, CRM functions, consumer insights, surveys, Google reviews and such. But again, to be very simply put, our sales team is a highly trained, highly motivated, goal-oriented discipline, really with the platform of guiding our customers through their home buying journey, whereas the marketing piece is the strategy providing those incredible sales platforms in which to sell. And again, we’re constantly evolving. Nothing is static in this, but at the end of the day, we work very closely together and we’re fused into one sales enablement team, albeit with different skill sets.

Dean Wehrli:

Okay. Let me ask you this question at the 30,000-foot level, and then I’ll bring it down to something you’re doing more specifically in Atlanta just right after. But the first question is, so when you’re designing that sales and marketing campaign, what in your mind are those key factors you need to hit on every time?

Caroline Simmel:

Well, so each project has its own unique strategy, so I say it’s all of the above, from product, market factors, pricing. It’s a complex layering of strategy. It’s not just one size fits all, and it’s no longer a build it and they will come, or my gut tells me mentality. We really need the science and the data before we create the art. But that said, after our lab work, we conduct a summit with our sales team, and together, marketing and sales present the marketing strategy together. So we’re not working in silos, we’re working closely together, and I think what’s important, so there’s market strategy on the front end but then there’s the critical feedback loops as you go through the sales cycle of the community to keep it fresh, pull levers were needed.

And you know, Dean, we’ve had the most volatile markets in the last, even since COVID. The swings are probably more wild than we had swings during the great recession, so price volatility has replaced the classic oversupply issue. We are leaning into more buy downs, flex cash. We’ve never led with incentives before ever, and now we are. Ready now inventory took a front seat, so things are constantly changing and that’s where we need to understand that our marketing strategy is also evolving, and that’s the team and the people behind it constantly not monitoring, it’s analyzing and asking the whys, so that’s the key.

Dean Wehrli:

In Atlanta specifically, a part of the area that you cover, you’re doing something a little bit different now I understand and changing the ways how you bring sales and marketing together with other key parts of the process like lending, design. Tell us about that.

Caroline Simmel:

So we call it home base, and again, it’s not one size fits all. It’s within our urban core of Atlanta, our urban portfolio of properties. And again, this is where marketing and sales differ. Marketing was in the lab for years with this concept before we rolled out this platform to sales, but essentially, Homebase is sales, lending, design and closing, all under one roof for multiple communities in the area. So let’s say you have 10 urban infill communities. I would have 10 to 15 agents working those communities all providing a different customer experience. Now with Homebase, it fuses it all together and it’s three agents selling the 10 plus communities. And again, it is probably… Well, it hasn’t probably. It’s changed the way real estate is sold in Atlanta’s urban core, but it’s made the customer journey so streamlined and so easy, and it’s just been a huge success. But again, you need the people, you need the land and lot pipeline. It’s not just, oh, bing, here we go.

Dean Wehrli:

How do you handle the logistics of that? You have fewer people covering as many communities. You have to be somewhere, you have to be multiple places. Does it ever become an issue just logistically?

Caroline Simmel:

No, it hasn’t. And the way… You know the data, Dean. 98% of the process is done online, the due diligence process, really the discovery process. We do have a model park within a mile radius of home base which features our entire portfolio of products in urban Atlanta, and we’re becoming an Uber-like model for that on-demand access. Like you test drive a car, you don’t necessarily need to do it with an agent, and again, these are high density infill products so the attainability factor comes in. So it’s a huge attraction for consumers today. And by the way, it’s a lifestyle driven proposition where, I don’t know if you’ve heard of Atlanta’s belt line, but it’s a 22-mile stretch of multi-use trails that connect neighborhoods throughout the city, and that’s where we’re building. So it’s just a win-win across the board, and on the other side, you don’t have all the cross trying to create a new experience for every community visited. They come to Homebase, they get the entire… The lens just widens on the probabilities where they can live in Atlanta.

Dean Wehrli:

I imagine that might be a little more difficult though to implement in a more suburban or even an ex-urban location where things are a little more spread out?

Caroline Simmel:

Yeah, absolutely, and that’s why we do it in some capacity in some of our surban markets where we’ll have a portfolio of communities within a two, three mile radius of each other because we have a design center that supports that sales platform. And being really a by appointment only driven company with a very strong OSC program, online sales program, and the fact that we have the on-demand access to our models and specs, it really creates a great environment for the customer to make decisions without having an agent breathe down their neck.

Dean Wehrli:

There is. I think we’re going to be talking about that and we’ll talk about with you here in just a few minutes too about the whole sales agent experience, so let’s get to that in a minute. First of all, I want to talk about marketing big picture. What is Empire’s main argument why you, the potential home buyer, should buy an Empire home?

Caroline Simmel:

So we work very hard at being a lifestyle driven company, and so it’s not only our land and lot positions, but we build and we match it with high functional, purpose-driven design as well. But we’re building basically where the action is. We’re not building out in the suburbs, large 5,000 square foot homes. We’re doing a lot of medium and high density infill projects. We’re doing a lot of mixed use projects that have really emerged, at least in the Southeast, as a very desirable place to live. And then when we do our 55 plus move down, what we call our boomer hood projects, that’s also lifestyle driven and we make sure that we’re close to trail systems and activity centers. And Burns told me a long time ago that trails are the number one amenity, and I believe it because we’re living it every day.

Dean Wehrli:

Yeah, trails are huge. Let’s not sleep on dog parks though. I’m a huge fan of dog parks, a big, big fan. I’ve seen dog parks. I saw a dog run on a mid-rise urban building, and they just carved out a quasi balcony, if that’s the right word, and they put some fake grass in there and there’s a beautiful dog run.

Caroline Simmel:

That is so cool.

Dean Wehrli:

Extremely popular.

Caroline Simmel:

What was it on the new Home Trend Summit? I heard, what is it? 80% of homeowners have a dog or multiple dogs.

Dean Wehrli:

It’s a huge number. It’s a very high number. Yeah.

Caroline Simmel:

Yeah.

Dean Wehrli:

It’s huge. It’s one of the biggest reasons that BTR, built to rent has an advantage over apartments people. It’s just your pet lives a lot better life with a backyard than not. Yeah.

Caroline Simmel:

Absolutely. They’re royalty.

Dean Wehrli:

How do you communicate those key reasons though to the buyer? When you’re marketing, when you’re setting up a sales campaign, is it like, we have the best locations, we have the best design? What are those critical factors you’re communicating?

Caroline Simmel:

And again, especially if you look at our urban infill portfolio, it’s a very diverse persona. You’ve got everybody from young, single professionals, professional couples, older singles move down coming out of their homes in the suburbs. I mean, it is just an array of different targets. So how do we attract them? First of all, we know we’re constantly evolving so nothing is static. We happen to have an amazing marketing team and group of outside consultants that are constantly pushing the boundaries on really understanding our buyer. And then it’s all about, it’s not traffic at any cost anymore. It’s engagement, and that is the key, is how we engage and how then we analyze it and the whys they’re engaging. And then to augment all of this, we have a very strong online sales platform that are the first touchpoint with all of these leads and customers that come into our funnel.

Dean Wehrli:

How will you decide the where to build? It sounds like you’re central city. Are you looking at – look, here’s where the jobs are, here’s where the growth is? Are just those classic factors are overarching?

Caroline Simmel:

Yes, of course. I think our niche is really where the activity is, where that lifestyle driven place is, and we have Atlanta’s belt line so that’s probably the number one. And look, these deals in infill Atlanta, they’re not easy. They’re hard. You don’t see a lot of public builders in this space. Again, they’ve got a lot of hair on them. You’re looking for higher density, so that’s been one of our niches. Another niche is mixed use. We’ve got incredible relationships with some of the local municipalities that want a builder like Empire in a mixed use project. And again, high growth surban markets to serve that empty-nester active adult buyer.

Dean Wehrli:

Would you ever try to cluster land buys together specifically for your Home Base? Yeah. You know what? That surban area, we have one or two things there. Let’s see if we can go get four or five more, right in a very close by proximate area so we can do this kind of home base scenario there. Would you ever consider that?

Caroline Simmel:

Oh yeah. I brag on our land team. Our land team is probably the best in the country, led by Paul Corley, who’s our company president, and this is in his DNA. We call him the dirt guy, and absolutely, we find a high growth area and we’re going after every blade of grass in that area, so yep, absolutely.

Dean Wehrli:

Tell me if you can answer this, because I know it’d be a little bit circumspect with respect to the actual numbers and metrics, but is there a targeted absorption rate, a sales pace that you will want to hit in a given project or even a market before you go in there?

Caroline Simmel:

Yeah, that’s a dynamic we look at. We really look five years ahead and we look at every community, and I’m a big believer in crystal ball is broken so it’s really hard to predict. But yeah, you want turn, you want inventory turns, you want pace. You also want margin, so it’s a balancing act and I can’t just put a number on it per community. It just depends on what the financial model looks like and what we’re trying to achieve in the project.

Dean Wehrli:

Okay. Have you ever signed off, like, you know what? Within your region anyway, we don’t want to be in that market, or even left a market?

Caroline Simmel:

Oh, sure. We have our no-go markets, our submarkets in Atlanta, for sure. But that said, we’ve been very successful overall in Atlanta, but it’s again sticking to our knitting, doing what we do well in these high growth, whether it’s urban infill, mixed use or high growth surban markets. That’s always been… And you know, Dean, just on another scale, asset classes are going up and down and changing, and there’s a lot of opportunity for land that was once maybe an old office or just old retail. That’s all shifting too, so there’s plenty of opportunity out there and it’s just knowing where the puck’s going.

Dean Wehrli:

One of the hot topics, it seems like it’s simmered down a little bit, but one of the hot topics a little while ago was the reuse of these now empty or near empty offices. Would you guys consider, or have you done, an office conversion to residential?

Caroline Simmel:

So it’s a mixed bag to say an office conversion. We’ll look at land where you can scrape at least most of it, but yes, we have a couple of deals that happen, just have changed from warehouse office to residential. And those are in, again, very high growth center of city areas, so great-

Dean Wehrli:

But I mean those offices where you literally reuse the building, because it is difficult because the floor plates are so funky, it’s hard to go residential from office.

Caroline Simmel:

Yeah, that’s not our… And I know even through our discussions through my ULI council and such, that’s a big topic now but it’s not so easy to do.

Dean Wehrli:

It’s extremely difficult and people found that out right away, that it just doesn’t translate very well.

Caroline Simmel:

Right.

Dean Wehrli:

If it’s not a U-shaped office building, you’re in big trouble.

Caroline Simmel:

Yeah.

Dean Wehrli:

What kind of input do you at sales and marketing have on things like product and location? Because you’re the ones who are going to have to target the buyers, et cetera, and sell and market those homes. Do you have immediate input into that process?

Caroline Simmel:

Oh yeah, absolutely. And again, more and more product approval is required as part of the entitlement process, so it is harder than in the past to really adjust it if it’s not working. So marketing, well, I’m there at go, at LOI stage and site planning, and we have what’s called a collaboration club here and it’s really across departments, land development, our engineers, our marketing teams. We get together, our branding teams, and we get together and really, we’re very data-driven, and we look at not only… Especially the high and medium density, we look at what products, but really, we’re constantly pushing the boundaries on that.

So to answer your question, yes, marketing gets involved from the beginning. I’m a big Burns fan when it comes to New Home Trends Institute. Mikaela and I have worked closely together. We study it. Our design team is very involved, so again, product is paramount here. And so yes, it’s absolutely well-thought-out. And again, medium and high density especially, it’s a jigsaw puzzle. You have to get it right in the beginning. You can’t just change it midcourse through the project. So it’s something that’s extremely critical to the… And we’ve so far, knock on wood, not had an issue.

Dean Wehrli:

I love these plugs by the way. By the way, just so the listener knows, I have never and will never ask any guest or speak with any guest about talking about anything we do. So this is for sure heartfelt from what Caroline is saying. We-

Caroline Simmel:

Oh my gosh, I’m a big New Home Trends Institute girl. I love it.

Dean Wehrli:

I’m glad to hear that.

Caroline Simmel:

I love it.

Dean Wehrli:

Will you ever throw your body under the bus that you think is a bad idea? So you think, look, we’re talking about doing this kind of product or this kind of location. I am just adamantly against it and here’s why. Will you just really, really get in the way of something like that?

Caroline Simmel:

Absolutely. I have to sell it. I have to sell it. So I’m going to say the culture here is amazing, everybody. You don’t want to cast of thousands making these decisions, but at the same time, we’re again very data-driven. Pretty much, people understand what’s going to work and what’s not, but yes, we’ve been in those situations where certain locations may not work with certain product mixes. So yeah, we respect each other but there’s a lot of very robust debate, I’ll say, and it’s healthy and it provides team health like no other as far as-

Dean Wehrli:

I’m glad. I’m glad, and I think one of the biggest problems for a lot of folks is that groupthink where everybody just agrees because they’re agreeing.

Caroline Simmel:

Oh, gosh.

Dean Wehrli:

That’s a curse. Yeah.

Caroline Simmel:

Yeah, absolutely.

Dean Wehrli:

Will you ever or are there any products that you absolutely won’t go… You sound like Empire has a pretty wide breadth of product types. Is there something you guys won’t do?

Caroline Simmel:

So where we build, we’re not going to do obviously the 5,000 square foot plus custom home in the middle of suburbia. We’re also not going to do any podium product, any mid-rises. We have ventured into stacked flats, condominiums, but typically, in our infill locations, we’re doing 16, 20, 22 foot townhome product, three story, and then we’re doing of course the stock flats. And then in surban markets, we’re doing a mix of townhomes and single family detached.

Dean Wehrli:

You mean 16 and 20, 22 foot wide floor plans?

Caroline Simmel:

Yes.

Dean Wehrli:

Okay. Can I just say I’m not a fan of 16? I think it’s too narrow.

Caroline Simmel:

You know what? Come see one of ours. They’re incredible. That’s one of our number one selling plans. They sell like crazy. Yeah. Well, they’re attainable. They give us the density we need to price them accordingly. Now, I wouldn’t build a 16 in a suburban market or surban even, but on the belt line? All day long.

Dean Wehrli:

Okay. Now let’s switch over to media. That’s a hot topic as well. What are your go-to media sources? When you’re going to get that message out, where do you go to first and most?

Caroline Simmel:

Again, we’ve got an incredible team that is not static, and a group of consultants, so I laugh when I think I used to be in meetings where 10 years ago, a lot of home builders didn’t even understand even what social media was. But yeah, the paid social platforms, paid search, highly targeted digital strategy, all of that is evolving every day. And again, I can’t say there’s one platform. It’s different for every type of community, but I think, again, we’re constantly going with technology and it’s all about engagement as I said, where it’s not one size fits all and we’re constantly testing and pushing boundaries really every day.

Dean Wehrli:

I think I know the answer to this next one, but I’m going to ask you about newspapers. Even the New York Times is now mainly about Wordle and Connections I feel like. That’s what I mostly do there. Does anyone advertise homes on newspapers anymore, and do you ever?

Caroline Simmel:

No. We’re not… Newspapers, billboards, all of that stuff really, it has no return on investment that we can see. Leads are not generated through those channels at all.

Dean Wehrli:

How do you measure your return on investment or even measure things like eyeballs and stuff like that that are actually really attending to your paid media, et cetera?

Caroline Simmel:

I have a whole analytics team, both internal and external consultants along with corporate. We look at that on a… Really, I call it every 20 minutes. We look at it constantly. We’re a big lead gen company. We’re going to 98% by appointment only. The days of walk-in traffic are pretty much over, and that gives us a wide lens to really measure the effectiveness of our campaigns, how many leads we’re getting and how they convert into appointments and then ultimately sales. So it’s a constant, and again, every 20 minutes, my marketing analysts are looking at this. And through the advent of GA4, there’s just amazing technology today to really look at this. And again, it’s not monitoring anymore, it’s analyzing. Asking the whys, what’s happening?

Dean Wehrli:

The more stuff that is done online, the more you can accurately measure things. It’s not just impressions. It’s actual real data. That is the difference.

Caroline Simmel:

Exactly.

Dean Wehrli:

How about social media? I’m assuming you’re on TikTok, you’re on Facebook, you’re on YouTube, all those social media platforms.

Caroline Simmel:

Yes. We’re on really everything that works basically, I’ll tell you that. But we get a lot of engagement through our interactive reels on Facebook and Instagram. TikTok, a lot of us are in the lab on TikTok, but hey, if it works, I’m all for it.

Dean Wehrli:

Yeah. I asked this from Stephanie last time, but you’re not going to do a dance on TikTok while you talk about the wonderful Empire Homes, but still, there is a way to use TikTok, I would think.

Caroline Simmel:

Oh, absolutely, and it’s growing more and more. And again, if we have this conversation, Dean, a year from now, we may be talking about something totally different. And that’s what I think home builders, we were always this very archaic industry that took a long time to catch up, but I feel like we’re really making strides and we’re providing through the technology, and we haven’t said the word AI, but AI is-

Dean Wehrli:

I will. I will.

Caroline Simmel:

Okay. Right.

Dean Wehrli:

Hold off on that. Online sales, so I want to talk about that. And I think here’s the second one where I think I know the answer to this, but you see online sales as being just absolutely critical to your future at Empire?

Caroline Simmel:

Absolutely. So we have built an incredible OSC program. They are the first line of communication, human communication with our buyers. But again, we’ve expanded it. Not only are they highly trained, but they tee up these leads, they vet them, they understand true prospects versus tire kickers. They have the trust of our sales team to set very purposeful appointments that end up in sale. The conversion rates through the ROSC program are incredible, and I think most builders now do have robust OSC programs because that’s what customers want. Like we said, they do 98% of their due diligence online, and then with the proper call to actions, they’re connected with a human.

And frankly, these non-standard hours are now covered with this Uber-like model where they have on demand or their questions answered, whether it’s three in the morning through different technology, and then that voice comes on in the morning first thing and calls them back and it’s powerful. And there’s data that even supports the fact that if a customer is not called back within the first even two minutes, they lose them. The chances of them falling off get higher and higher.

Dean Wehrli:

Two minutes? Two minutes? Is that…

Caroline Simmel:

It’s pretty… I mean, I think now, it’s down to like… You know how impatient people are these days.

Dean Wehrli:

I know, but good lord.

Caroline Simmel:

If we don’t get instant satisfaction, our questions answered instantly, we drop off. You joke, when the computer screen starts spinning, you’re turning that computer off, you’re trying to restart it. You’re not going to wait around, and the same thing goes for our society. There’s so much noise and there’s so much that goes into the research, but if they’re not getting somebody calling them back within a reasonable amount of time, they’re going elsewhere.

Dean Wehrli:

You’re right. I could work on my hard drive. We have a server and when I hit save on a large file on a server, it can take a solid 20 seconds to save, and I’m not going to… I found myself complaining vociferously about that just the other day. It’s like, “I can’t wait 20 seconds to hit save. That’s crazy.” So I guess you’re right.

Caroline Simmel:

Right, right. No, it is. We’re just an impatient bunch. But we’re also looking at, on-demand touring, I mean access into our models, our specs on their time, and then they call. It’s a web of giving the consumer the questions that they need answered and the information they need to finally make the decision to buy. And again, and that’s when you asked first, what’s the difference between sales and marketing? Marketing can provide all these platforms and these functions, but sales has an incredible job of they’re navigating, especially in these days with the economy, they’re navigating that tension between dissatisfaction with their current home and the cost and fear of buying a new home. So that’s where sales come in, is marketing can do a million different things to try to put that at rest, that fear factor, but sales is that human connection that’s able to navigate the buyer through this not only biggest investment of their lives, but their change in lifestyle.

Dean Wehrli:

Yeah. And I think the time factor that you brought up a second ago is critical. I’ve always thought that, yeah, 10 to five or 10 to six during summer hours, that’s just not most folks’ schedules.

Caroline Simmel:

Right.

Dean Wehrli:

But I get it, that a sales agent doesn’t want to be there. A solo sales agent doesn’t want to be there maybe when it’s dark. I completely understand that, so being able to show and allow folks to go see on their time is huge. How late will you keep a model available to folks to go and self-tour?

Caroline Simmel:

Yeah, there’s so much to it. It’s not just a model. It’s where you use the touch and feel things, but technology is the ultimate copilot. And if you can give them the visualization tools online and all those things, all their questions answered to get comfortable, that’s when they’re going to get up off their couch, off their computer and come in and walk through a model. I don’t think models are going away. There’s been a lot of debate on that. I think models are really the tentacles of our technology and providing that emotional connection for a buyer. Instead of looking at it on a screen, they’re inside, touching and feeling and living that space. And I’m very fortunate, I have one of the best team of designers, so we really flex our muscle with that.

But again, technology within the models. I mean, there’s great marketplace platforms now where they can buy furniture through the model and duplicate the model. And again, that’s a whole different podcast but I just think we’re going at light speed on what we can provide to our consumers and the experience they have, and like I said, if we’re talking a year from now, it’s going to be a different conversation for sure.

Dean Wehrli:

Yeah. Well, will that future have a role for virtual reality, for VR? Because it feels like not only is VR kind of dead, but it may also have killed many people by swapping headsets during the height of a pandemic. Do you see us going back to VR in any big way?

Caroline Simmel:

So I love that you said that. I think technology, like I said, is a great copilot. It’s a great way and I think there’s going to be other areas to really enhance the experience. I think design, that VR component, but it has to be right. I don’t think we should overthink this. The whole put on the glasses and all, no one wanted to mess their hair up even before COVID. So it’s like, “And by the way, I don’t want that on my head. It was on someone else’s head an hour ago.”

Dean Wehrli:

Yes. I don’t care how much you cleaned it. It’s not enough. Yeah, I know.

Caroline Simmel:

Yeah. And one of my favorite people in the business talks about a race to intimacy with your home buying journey, and I think if we can just get back to basics with connecting the human element, that transaction is just so complex. Making those connections, walking through a home, touching and feeling it, not wear VR. I think VR has its place, but it doesn’t take center stage for us. Now, it may for other builders. It doesn’t do that for us.

Dean Wehrli:

And maybe when it’s better, we always hear about, oh, this next iteration of VR is the revolutionary one, but it has tried and failed at least three times now so we’ll see.

Caroline Simmel:

Well, I’m guilty of getting really excited about new technology, and then you have to take a step back and then look at it. And you certainly don’t want to be the Guinea pig and spend millions of dollars on something that ultimately does not resonate with your customer, so again, I’m not a conservative person but you just have to really think it through.

Dean Wehrli:

Yeah. AI is something a little bit like that. AI has an extraordinary future. It’s already impacting us in huge ways. You’re starting to see a little bit of pushback on that in terms of let’s calm down. At the end of the day, it’s just really sophisticated pattern keeping and pattern recognition. But I’m contractually obligated, as all of us are with our new AI overlords, to ask about AI. Is AI a big part of what you’re doing and plan on doing in the future?

Caroline Simmel:

So I would say that we’re in the lab on it for a lot of things. We have implemented some, and I don’t know if you want to call it AI, but the instant texting and the platforms that provide… We’re not into chatbots yet. I’m not a big believer in that, but we’re certainly giving our customers the information they need in that off standard hour, Uber-like model. So we’re starting to dip our big toes in that, but I think AI, it’s coming. I’m looking at a lot of it for not only sales and marketing, but there’s a lot of AI. I mean just in terms of predictive modeling for underwriting and really understanding, but it’s all about the data. It’s about the data you have, the data you harness, and then using that data to do it right. And I think there’s a lot of great companies, there’s a lot of great startups, and if I had a crystal ball, I would invest in the ones because I think at some point, they’re going to just be insanely successful.

But I think a lot of home builders right now are just looking at it just from a wider lens, but I’m excited. I’m not going to lie, I’m excited about it. I think it’s an incredible… I’m on ChatGPT every day. I ask ChatGPT all kinds of questions, and they’re always right.

Dean Wehrli:

I don’t know if always. In my experience, it’s been a little less than a hundred percent, but still, it’s for sure improving all the time.

Caroline Simmel:

Yeah, there are some hallucinations for sure.

Dean Wehrli:

There are definitely some hallucinations and some, “No, that’s for sure not true.” Let’s end with a few questions on buyers, because that’s your bread and butter at the end of the day of course. So let’s first talk about buyer segments. What are those buyer segments that are absolutely critical, that is your core buyer at Empire?

Caroline Simmel:

Yes. So as a data-driven company, we study these buyer segments’ personas pretty deeply. Like I mentioned, in our urban core, we have a diverse range of lifestyle seekers, I’ll call them. They’re spanning from young first time home buyers to move downs seeking enhanced living experiences. I love the life stages, and I’m going to mention Burns again. In his decade born approach, we study a lot of that. We study their unique aspirations and preferences. We’ve got an incredible design center which we’re able to capture that data on what people’s preferences are and there’s a tremendous amount of data on our buyers.

But I think builders can make a mistake to just group them into just certain categories and here’s what they are. It’s ever-changing, it’s ever-evolving. But mostly where we build, it’s that barbell where we’re looking at the young professionals, the professional couples, and then the empty-nesters. We’re going into in Chattanooga that move up family buyer and I think we’re very good at that, but we haven’t done that in a minute. But again, taking that move up family buyer and not going into the suburbs but going into high growth surban markets that are lifestyle driven. And I think that’s where people, especially since the pandemic, lifestyle is a key driver for sure.

Dean Wehrli:

To dovetail with AI, by the way, I think AI is one of those… I think buyer segments is one of those areas where AI can be really helpful, because again, it’s effectively patterned pattern recognition and so recognizing how these buyers really hang together is critical. We think we know as the bourgeois bohemians, whatever, but we’re much more complex than that. We always fall– we’re not as easily categorizable as folks want to think we are. AI can very much help, I think, accurately categorize us. If that’s good or bad, I don’t know.

Caroline Simmel:

We had a design, like an algorithm based style quiz I’ll call it, and we tried to group their design tastes into these certain bourgeois this or coastal this, and it failed. People don’t want to be labeled, and, “No, I’m not that. What do you mean I’m this?” So you have to be really careful with labeling.

Dean Wehrli:

Well, you’re not supposed to tell them.

Caroline Simmel:

Right, exactly.

Dean Wehrli:

They’re not supposed to know they’ve been categorized. That’s critical.

Caroline Simmel:

Yeah.

Dean Wehrli:

Okay. So now you know who you’re going to target. You understand your buyer and the buyer profile that you think is most likely to buy an Empire home. How do you finally target those folks as much as you possibly can?

Caroline Simmel:

Yeah, I think it’s not one size fits all. I think we focus a lot on product, in some instances, price, location, lifestyle. And really, it’s more a lexicon of approaches on how we do it. And like I said, we’re constantly not monitoring but analyzing how our lead gen and our funnel is working on seeking those buyers. So it’s not just a, “Hey, we do this and this works.” It’s a myriad of differences and tactics and strategy that we have that really, every project has a unique way of doing it.

And I will say, because our land and lots are just in absolutely A plus locations, that’s a huge workhorse for us. But we’re also more into storytelling and story getting, and we weave a story about the lifestyle, and it’s looking into the history of the land and going through a whole naming convention. And we understand that people, really, when they’re moving, they’re changing their life. They’re coming into a new identity of where they’re living and who their neighbors are, so it’s a complex structure of how we’re telling the story, where we’re telling the story, who we’re telling the story to, and from digital to boots on the ground outreach to broker outreach. I think we’re a big believer that despite all the NAR lawsuits, we’re a believer that our co-ops do make a difference where they add value. But we just tell the story really throughout all influencers, brokers, customers, the whole nine yards.

Dean Wehrli:

You mentioned names a minute ago. What is the coolest marketing name you’ve ever used for a project?

Caroline Simmel:

Oh, gosh, there’s so many. I love The Swift. That was one of our in-town. I love, well, Love Tree.

Dean Wehrli:

Love Tree?

Caroline Simmel:

Love Tree. We had all of our trades, “I’ll meet you at Love Tree.”

Dean Wehrli:

Okay.

Caroline Simmel:

But again-

Dean Wehrli:

That could have been misunderstood, but okay.

Caroline Simmel:

But there’s a lot of stories behind it. Harlow was our first community that really dug into the history of the land. There’s Harlow, there’s Larkspur. We like one word names. We have a master brand, Empire, so Empire Larkspur, Empire Harlow. I don’t like… Did you ever see that Excel spreadsheet that had community names and it was like, The Enclave, the this, the that. It was like that, and then you cross-referenced it to at Mill Creek, at John’s, at all the different creeks, and then you can pull them together, the Enclave Mill at the creek at blah, blah, blah.

Dean Wehrli:

Okay. So what was the dumbest name you ever used? Come on.

Caroline Simmel:

Oh gosh. So this was before we started really looking at this and this is early on in the Edward Andrews days, but some person in our company named a community The Promenade, just because he thought it was a great name. And that’s when you asked me before if I’ve ever fought tooth and nail. I fought tooth and nail on that one. And that ended up being Harlow, which was one of the most successful communities in Atlanta.

Dean Wehrli:

I think I have seen a Promenade. Have you ever got stuck with one here in… I’m based in Northern California, but I remember seeing a project, it was somewhere else in the country, where it was clearly a person’s last name and then Ranch. And the last name was, honest to God, it was a string of continents. It was unpronounceable. I can’t even pronounce it, so it was “that name Ranch.” For sure the landowner who sold it had some kind of agreement in the sales agreement. Have you ever been stuck with something like that by the seller?

Caroline Simmel:

Yeah. There are some bad ones out there. I’ve seen them as well, but the worst ones are always tied to somebody’s ego, for sure.

Dean Wehrli:

Exactly. Yeah.

Caroline Simmel:

Yeah.

Dean Wehrli:

That was for sure what happened.

Caroline Simmel:

Our motto is can it look good on a hat?

Dean Wehrli:

Okay.

Caroline Simmel:

Can it look good on a baseball cap?

Dean Wehrli:

That’s good, because this one would not. I should have asked this question earlier. Can really strong sales and marketing overcome a mistake in terms of product or location or something like that?

Caroline Simmel:

Ooh, yeah. The dynamics of that, wow. So yes. Well, no, exceptional talent can sometimes compensate for deficiencies here, but it’s not sustainable in the long term. And then it goes into your reputation as a builder, the trust, the loyalty. So you need the exceptional marketing to build the awareness and lead gen, but you can’t realize the full potential if you’ve just got it wrong on the product and the place.

Dean Wehrli:

Can you do it the other way around? Can you rescue or can you really mess it up? Can you be Giancarlo Stanton of the Yankees and turn a triple into a single? Apologize for the baseball reference, but can you mess something up that should have been a home run?

Caroline Simmel:

I think you see it all the time. Knock on wood, we haven’t done that yet or plan on doing it, but yeah, I think, well, especially in today’s underwriting environment, you’re looking at a com set with replacement costs much lower four years ago and trying to match it with today’s inflation and supply chain issues and everything else. And we talk about the fact that deals just don’t pencil like they used to, so absolutely, you can mess it up, and especially if you have such thin margins of error. So that’s something as a company we’re very tuned into, especially in today’s environment, is that you don’t want to mess it up. And last I checked, we have a major affordability crisis we’re dealing with, so again, that velocity and that pace, if that’s compromised, then you’re messing it up.

Dean Wehrli:

Okay, so no pressure, don’t mess this up. We’re going to end with the lightning round on buyer segments, key buyer groupings. What is the one thing that enters your mind first when I say the following? So I’m going to go in quick succession through some various buyer segments. Let’s start with young singles.

Caroline Simmel:

Oh gosh, lifestyle. Lifestyle, lifestyle. I want to be where the action’s at.

Dean Wehrli:

Couples. Does it differ for young couples?

Caroline Simmel:

Dual income, they can kind of go where… But again, lifestyle driven. We’re lifestyle driven. They’re not going to go way out into the suburbs and just be… They want where the action is.

Dean Wehrli:

Same with older couples? I’m not saying retirees or move downs, but those whatever, thirties, forties, fifties, dual income kind of couples.

Caroline Simmel:

Yeah, they’re very discerning. They’re most likely moving out of a large home, whether they’re empty-nesters. There’s a mix of some want to be where the action is. Others want to be in a very lifestyle driven community but that has great connectivity to trail systems and health and wellness. And that’s one of their huge just bucket list items that they want with a new lifestyle. And again, we’re very good at that.

Dean Wehrli:

Let’s go to families, young families first.

Caroline Simmel:

So young families, we don’t typically build for young families, with the exception of high growth areas close to exceptional schools, but we put that lifestyle component in there for that family. We’re not just the commodity. Let’s just build a bunch of houses in a neighborhood for young families. It’s not about that at all for us. It’s more about taking what we’re really good at and pivoting over into that young family, but adding those dynamics that do so well for the other buyer groups.

Dean Wehrli:

Then this might be moot, but are you selling to mature families?

Caroline Simmel:

They’re probably a smaller percentage of our mix now, but I see especially going into Chattanooga where some of our land and lot positions would cater to some of the mature families.

Dean Wehrli:

Okay, so how do you do it? What’s your key selling proposition to that mature family in Chattanooga?

Caroline Simmel:

Like I said, it’s lifestyle, and I hate to sound like a broken record but it’s creating a sense of place. It’s really activating the community. It’s, again, creating those connections. We opened a community, we call it Social Circle. It’s two words, but Social Circle in Chattanooga, and the park is the central green. And it talks about that connectivity, making new friends. And what was funny was we targeted it for that empty-nester buyer, kind of like meet great old new friends kind of thing. Or every night is Friday night, it’s boomerhood, all the things that we do, but it’s attracted a lot of families.

Dean Wehrli:

My last two categories, I think you almost answered it already, is empty-nesters and retirees.

Caroline Simmel:

Yeah. Again, lifestyle driven. We’ve got a community called Heirloom. It’s connected to one of the big trail systems in Atlanta. It is out in the suburbs but very high growth. I’d call it a surban market. And again, just lifestyle driven. Did I say pickleball? Clubhouse, where the trail head is in the clubhouse and you’ve got miles and miles of trails with a mountain behind it. Those are the trappings of just that empty-nester lifestyle, boomer hood we call it. So again, very intentional about that.

Dean Wehrli:

I was going to say, the cohesiveness of your answers actually makes sense. Your brand is lifestyle so you can thread that through all these segments in different ways, but certainly, it gets threaded through.

Caroline Simmel:

Yep, absolutely.

Dean Wehrli:

All right. All right. Well, Caroline, I thank you so much. I’m so glad you could join us here today.

Caroline Simmel:

Thank you. Thank you for having me, and yeah, this has been fun, like you promised.

Dean Wehrli:

I was hoping so. I like to have fun on these. So thank you too, listeners, for listening. Let’s meet back here in a couple of weeks, or if you’re binging, let’s meet back here right now. You never know. All right, see you next time.

 

 

 

 

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