Building Perspective with guest Jon Melchi

S2 EP 13 | Parade of Homes Pivot with Jon Melchi

Show Notes:

Focus Discussion of the Week:

What will your 2021 Parade of Homes look like? Jon Melchi, Executive Director of the Building Industry Association of Central Ohio, joins Matt Riley to discuss how his market’s Parade of Homes pivoted when its 67-year-old model no longer worked. Listen in to learn how organizers incorporated digital best practices into every aspect of the Parade, and how the goal shifted from attracting high numbers of attendees to only the most qualified home buyers.

Mentioned in this episode:

Parade of Homes: The Best of Homes by Dickerson

 

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Two thought leaders come together to explore all things sales and marketing from their unique perspectives. Each week, Mollie Elkman, Matt Riley, and others from Group Two dive into a focus discussion to talk about the latest trends, changes, and best practices.

Jon  0:00  

Our previous parade operated for three weekends two weeks every day. And then it was over. And while we had a website that had that information on there, it wasn’t a focal point of what we did. So under this new format, the parade of homes is going to exist 365 days a year. So if you’re a consumer from out of market, and you want to see the best that the central Ohio market has to offer, and you do a Google search on central Ohio, home builders, it’s my hope that the parade of homes comes up and you check our website out. And you’re going to see all of these homes that are still going to be listed and ways to get in touch with those builders. And we are taking this parade to the consumers both geographically around the metro area, and to how they want to receive information which is digitally and electronically. And that’s where we’re going.

 

Matt  1:11  

Hi, and welcome to Building Perspective with Matt Riley and Molly Elkman. We’re here to bring value to you and your team by exploring all things sales and marketing related, all from different perspectives.

 

All right, and welcome back to another episode of building perspective. And today we are going to be talking about 2021 Parade of homes and what the heck it’s going to look like in 2021, this year after a year full packed full of fun COVID stuff. And what what’s this? What are these platforms, one of these programs going to look like moving forward. And I’m really excited to have with me, Jon, Melchi, with the BA of Central Ohio. JOHN is the executive director and a good friend of ours in group two. And so john, thanks so much for coming on the show.

 

Jon  2:14  

Thanks for having me, Matt. I really appreciate it.

 

Matt  2:16  

Yeah, absolutely. And so well first let’s talk a little bit about obviously you’re heading up the big slash HB a different different associations. I’m in the Raleigh area. We call it the HBA. Other areas call it the BIA I, to me, it’s all it’s all one in the same. And it’s all serving, you know, our industry and our homebuilding industry. But first, let’s talk a little bit about like, what’s the purpose of an HBA or a BA, and then we can talk a little bit about why, as a builder, you should be involved in that.

 

Jon  2:51  

Yeah. So you know, I think it varies from Market to Market. But here in Central Ohio, we’ve really hung our hat on three essential services and categories that we can provide to the residential construction industry. The first is advocacy and government relations work. And that is really just helping to make sure that our builders can work effectively with local government. The ba really exists because our members are very busy working on projects. And we as an association can work on processes, so that those projects can, can come to market more smoothly. And in our market. For example, we represent the 10 County, Central Ohio MSA, which is really the fastest growing market in the Midwest. And our builders are now building in areas where they haven’t built before and in markets where they haven’t been. So our job as an association is to go out there and and make sure that the environment is right. And for those builders to come in and meet the demand that exists. So advocacy has been and will continue to be a huge component of the HBA world. And another thing that we haven’t really been able to tap into because of COVID is networking. And, and providing a place for everyone in this industry. And I think people forget about how vast the industry is. They see the builder and they think, oh, we represent the builders. Well, we represent Yes, we represent the builder. But we also represent the real estate company that helped them acquire the land, the attorneys that helps them through the zoning process. All of the mortgage companies, all of the site excavation, framing companies, interior decorating, everybody that touches the residential community, you know, we represent them as an industry and our job is to serve as a place where they can all come together. And that’s the thing I am most excited about. As we kind of move out of this COVID phase and hopefully back back to normal. And education and business services are a big part of what we do and helping our members run more efficiently again, many of our companies or small companies, and they’re so busy working in their business, they don’t have as much time to work on their business. So what can we do as an association to help them and kind of tying into those those that networking and events, plus business services are our home tours, which kind of crosses all of our pillars of the association and providing an avenue for our builders to showcase the homes that they build, which is where the parade of homes ties in?

 

Matt  5:33  

Yeah, absolutely. Well, and so you know, the other part is your local HBA slash BIA is also directly tied into the national level with the NAHB you know, and like you’re talking about the networking opportunities the parade of homes and but it really for our industry it is you NAHB is our home is our representation there are advocates there you know, they’re the ones they’re going to go lobby Congress and you know, fight for things they’re going to benefit us you know, for instance like everybody’s got the lump the lumber campaign going right now you know, NAHB had to take a picture of your of your lumber invoices and send those in, you know, really funny, you know, trying to be there and fight for the rights of humbling and we are such it’s such an interesting thing, because we are such a large industry, but we are very broken up into lots and lots of small companies and in When most people think of homebuilding, they think of the really big national publicly traded homebuilding companies. They do lots and lots of volume but as a as a greater body of work of the homebuilding industry. Like they don’t make up the majority that makes up our industry is are those small businesses, like you were saying, like, they’re so busy, they don’t have time to work on work on their business because they’re trying to produce a product. And this is where it all ties together. So anyway, I just I’m a huge advocate of, you know, being involved in your local hbas and tapping into all those resources that that are at our disposal as a homebuilder that we may or may not we may not know about and then like we tie right into parade of homes, right. So most people know my background, but just in case, you know, I’ve been in personally as a builder have been in three different markets. I was in the Indianapolis market. I was in Huntsville market, and then the Raleigh, North Carolina market. And so Huntsville didn’t didn’t have a parade. Indianapolis had, it wasn’t a traditional parade of homes and I was there it was the What was the name? It was a it was it was similar to what you got Rama, Homer Rama, thank you. And where I grew up in Louisville, Kentucky, they also had a homer on my right. And so you guys in Central Ohio did something similar to that. And you’ve recently made a shift, which we’ll talk about in a second, we’ll talk about kind of why and how that ties in. But, you know, like, that’s another thing your existence is to be is to help serve and advocate for homebuilders. And so, you know, putting on these events that are public facing, what are the whole point of them is to actually be tied into and serve the Home Builders themselves and how you can do a better job, how you can deliver some things that the homebuilders are looking for, which ties into you know, last year, you guys you guys didn’t you had to cancer? Your your parade of homes? Because what let’s explain first, how your parade was set up originally? Yeah,

 

Jon  8:49  

absolutely. So for about 67 years on the parade of homes operated on a on a year over year, relatively the same model, which was a single site where multiple builders build homes, consumers came park their cars, toured the homes, paid a ticket entry fee, and had a very good time. And I think for 67 years, that model served us well, and had become an event here that people in Central Ohio enjoyed for many, many years. However, over the past few years, and I’ve been with the VA for three and a half years, including when I it before I even was hired. I think there was some concern about the long term viability of that model. And that viability came from a few different areas. One is that, as you mentioned, you know, as we have more publicly traded building companies dominating market share, we have less independent land developers in Central Ohio than we used to have, who were willing to host the event. So we found ourselves geographically having the event in the city Marissa year over year over a year, and are finding an optimal site was becoming more and more of a challenge, as even some of our larger developments kind of shrunk in scope coming out of the recession of 2007. Because people are, we’re thinking more and more of, let’s do a smaller development that we can turn. And if I’m going to go through this process, I might as well build all the homes on it, as opposed to selling all the homes. So we were having a little few more challenges locating sites that that met the needs. A second challenge we had was, for better or worse, the ante kept getting up in these homes, and the average price point of the home continued to rise significantly. And while that is remained and our builders did a fantastic job of showcasing the homes they had, at those price points, we had less builders that wanted to participate in the parade of homes. So we were becoming more and more dependent on our smaller custom builders to take that risk and build those homes in in the parade. And ultimately, a lot of it was what it came down to was when you talk to some of our larger volume builders and builders who weren’t participating, as they said, we’re not sure that this event is it’s currently constructed helps us sell homes. Yep. And ultimately, and in our office, we have the original charter and articles of incorporation from the parade of homes here in the state of Ohio. And it is to educate home buyers about the process and to help sell homes. And yeah, if we were you start adding all of those things up. And we had given some thought to changing, changing the format. So to go back to last year, unfortunately, we had a site where it was a great site, and it continues to be a great site. But those builders who had become accustomed to building in the parade of homes, we’re not in that market where the site we had identified was. And unfortunately, without the robust participation that we normally had, we had to cancel the event, about six weeks later, COVID-19 hit and we wouldn’t have been able to have the event anyways. But yeah, there’s nothing like a pandemic to allow you to research and spend a lot of time in your basement looking at what our markets are doing. And that’s what our leadership did. And we kind of dug in and tried to identify the best path forward for the big central Ohio.

 

Matt  12:42  

Yeah, ultimate and, and so I think that’s a great, like, overview of, you know, what your, what your role is, as the BI of Central Ohio, who you serve, which is the builder, the builders, and that, obviously, that association, you had a long standing tradition, I mean, 67 years is a long time. And you’ve you’ve essentially conditioned the public to a certain thing, right. And also you’ve conditioned the homebuilders to a certain thing, but what I what I really want to commend you on is listening to you know, you, you had something come up, right, and then COVID happened. So, you know, ended up what made a lot of pull it off anyway. But you were able to reflect and listen and say we’ve got to change this model. Like he when you look at your Articles of Incorporation, and what your essential mission is for the parade of homes and you look at what you were doing, and you look at the greater industry within your area, it really those those things weren’t really lining up, right, you know, you weren’t helping it, you know, helping all the builders in the area sell some more homes by having essentially a single site parade of homes and like I said, at the very beginning, I’ve been in as a consumer and a builder in parade of homes, we’re both ways where as a single site, you pay for a ticket you go tour, a couple million dollar homes, you know, several couple million dollar homes. And, you know, as a consumer, you get to Ooh, and ah, but the reality of that is is you’re you know you’re not really helping anybody but those people but most people that’s not attainable for right. And so you said all right, this is our opportunity this is this is our chance to kind of reset rebrand and, and get us back on mission. And so that’s that’s what that’s what you’ve done and I think that’s that’s amazing. And let’s let’s talk a little bit about you know, you you’ve discovered this is what we need to do to better serve our members. What does parade of homes 2021 look like for big central Ohio and then what and moving forward?

 

Jon  14:58  

Yeah, well, no I will tell you what you mentioned at the start of our discussion, the NAHB network and how great it is to have all the resources that are available to you to us, as NAHB members. As an executive officer, one of the resources I have is folks in other markets. And I spent a lot of time on the phone with colleagues in Portland, Minneapolis, Raleigh, Indianapolis, Cincinnati, and Austin, trying to figure out okay, what do you guys do Orlando? What do you do? What are you seeing, to try to get that information and, and, and bring it to our building community. And moreover, we have a lot of builders who are in multiple markets. So they also have experiences which also helped influence our decision. And we had, we had a member lead process. Our current president, Jeff, at Manor homes here in Columbus was the chair of that committee, and led a real inclusive process that included our associate members, from the real estate community, from our previous sponsors, and builders of all sizes and scopes to see what really worked. And what we landed on was, we identified two markets that we thought did a really good job and was were examples of where the, and where the ball was going. And that’s Minneapolis and Raleigh. And those markets both have scattered site tours, or tours that are around throughout the MSA in their markets and not tied specifically to a singular site. And our builders in those markets said these events help us sell homes in those markets. I’m not the smartest guy in the world. So if they’re doing it well, let’s let’s see what they do. Well, an add into that now. I’ll even go one step further. And what we learned in the last 14-15 months, is that consumers are increasingly looking at homes online, before they go to visit them. And shocker is it’s like welcome. You know, welcome to 2020 in 2002, , and yeah, as we thought about what we needed to do to change, president of our association said, everything we need to do needs to be focused on helping our builders sell houses, okay. And then if the consumers are looking digitally, then we needed to be in that space. And we were there a little bit previously. But when you are in this is the difference in events, our previous format had turned into more of a consumer facing event where our goal, and we executed that goal was to get as many bodies through the gates as we could. Yeah. And, and we were successful at that, what I think the direction we had received from our members is, that was great. And that helped the BIA but if you want to help the members drive as many qualified leads and buyers to our homes and help us identify those, and that’s where the shift is. And that’s where our change to a digital, much more strategic marketing focus is is going to play out this year.

 

Matt  18:27  

Yeah, no, I think that’s great. I think it’s, you know, I love that you identified a potential scenario, you had your your board and committees lead the discovery process through to come to the end conclusion of what’s the best serving our members and and have made that decision. And yeah, I mean, obviously, I’m in like I said, I’m in the Raleigh market. And as a builder in the Raleigh market, we would always, always participate because it was traditionally like ours was always in the fall. And which is typical time user greatest school was not starting to get back in it was right at the time, when you would typically see that seasonality low. And so you know, when we’re outside of fairytale land of what we’re in right now, we’re consumer demand is, you know, insatiable. It was the way that helps you drive traffic and sell homes in the fall. And it helped kind of, you know, take that, you know, everybody john can see me but no one else can. I’m using my hand effect, take the flatten out that bell curve of activity, and bring some of that activity in the fall. It’s like listen, if you want to drive traffic and sell homes in the fall in the winter, this is how we do it, right. Like this is one of the tools that we have. You know, in group two, we actually helped we have a couple clients one particular that we helped homes by Dickerson that won gold for best marketing campaign for the PR for their parade because of this Gift of how we had to run the parade of homes here in Raleigh for them, and it was all digital, it was all contactless it was all, you know, all those things. And you know, they had some they had the even in COVID times they had some of the best turnout they’ve ever had, they sold more homes than they’ve ever sold at a parade of homes before all based on shifts of the market shifts on the conditions around the market. And I think that’s exactly what you guys have done is you’ve shifted around the conditions of what it what it needs to be based on kind of best practices of these other large associations that are doing similar things. And, yeah, I mean, I think it helps dramatically, when you’ve got, you know, the Columbus area is a big market, you’ve got a good amount of national home builders that are in those markets, Minneapolis that are in the markets of Raleigh, that sit on your sit on your committees, and are able to provide that feedback to say, Hey, this is what it’s for. And so I think it’s great to say, for you guys to recognize and say, Hey, this is, you know, this is what our goal is, is to help you drive more traffic as a builder and sell more homes. So you should participate. Yeah.

 

Jon  21:15  

And, and there’s an education process that has had to take place and is still ongoing. You know, you’d mentioned that consumers. There are a lot of folks who attended this parade for many, many years who are not happy with our decision. And I am certainly aware of that. And listen, I get it, it was an event that they had looked forward to and they enjoyed coming and checking out the great work that our builders did. However, I think for where we were going, we needed to make that change. And this was the appropriate way to do it. For our builders, it’s not only educating them about the new format, particularly our smaller builders, making sure that they are making the proper investments in the digital space. And it sounds a little counterintuitive right now, because everybody’s selling homes, and you really don’t need to do a ton of self marketing to to increase those numbers right now. But now is the time to make those investments in those tools. And the parade is a great excuse and a reason to do that. And, and to get those digital assets there. So that if things do slow down, you are prepared to help drive traffic. And even more than that, to capture the traffic that the parade generates in a more effective manner, then please fill out this card while you’re in the house. And you know, I’m trying to decipher if somebody wrote a legitimate email down and you know, how we’re tracking as leads.

 

Matt  22:48  

Absolutely. And, and so, you know, as for builders, and I hope that some of the builders in your market are listening to this. So like some of the things that we’ve seen that were really successful, and getting those conversions and not having to Hey, Mr. Customer, Mrs. Customer, we fill this out, you know, some of the things that we found successful, we’re utilizing QR codes and text messaging in to get that information to get let the consumer get the information that they want, like, what do they want, when they’re walking through that house that model home? They want to see? What are the colors in this room? What is the what’s the word, this furniture coming from? What is the you know, like, what are the things Yes, and then that gives you a reason to engage with that potential prospect and doing it on their terms, right. And really digital, that’s what digital marketing and digital experience is, is it’s allowing you to engage with the consumer on their terms, and not forcing it down, like fill up this register who wants to fill out a registration card to be marketed to, but if you can provide tools to consumer to give them something of value that they’re looking for. In a method that is most, you know, reliable or in most convenient to them. That’s that’s not just necessarily advertising, right? Like that’s, that’s marketing and a capital m not marketing, the lowercase or advertising. And so that’s where we start generating that customer experience. So there’s a lot of things and I think you’re you know, in your market specifically with the new version of the parade, I think this is the perfect opportunity for builders there to kind of start working out some of those bugs. You know, it’s like best time to test things new things is when things are really good, because you’ll stumble along the way a little bit and you’re in a much more forgiving market to test those out. Then you can’t afford to make nears make make near as many mistakes and as

 

Jon  24:43  

less forgiving market. Absolutely. And you know there’s some other I think changes for some of our builders who participated in our previous format you’ll see. Okay, we’re not going to 5000 people are not going to walk through that door on Saturday. It’s just probably it’s not going to be 5000. It may be 50. But what if of those 5020 or if 10, or 15 are really good leads. And, and, and, again, targeting and being aware of just shifts in the dynamics. And you’re exactly right on investing for the future. And that’s one of the changes with this format to our previous parade operated for three weekends, two weeks every day. And then it was over. And while we had a website that had that information on there, it wasn’t a focal point of what we did. So under this new format, the parade of homes is going to exist 365 days a year. So if you’re a consumer from out of market, and you want to see the best that the central Ohio market has to offer, and you do a Google search on central Ohio, home builders, it’s my hope that the parade of homes comes up and you check our website out, and you’re going to see all of these homes that are still going to be listed and ways to get in touch with those builders and and we are taking this parade to the consumers both geographically around the metro area, and to how they want to receive information which is digitally and electronically. And that that’s where we’re going.

 

Matt  26:21  

And I love the point that you made is that this parade is not three or four weekends, it’s, it’s Yes, it is a few weekends, but it’s also the rest of the year until the next parade comes up, right? Because there’s going to be that central place where people can can find information. I also think honestly, like it just kind of came to me as you were talking. I think this version of the parade is also is also better for the consumers in the sense that it’s more inclusive. Right? It’s actually more inclusive for the consumer. Because think about the person who is an entry level Home Shopper, right? They are not going to look at $2 million homes. You like because you’ve got a you’ve got a you’ve got an MSA what is the what’s the MSA population of the Columbus area? What is it but it’s got to be

 

Jon  27:11  

2,000,002 and a half million people a little less than that. But yeah, I think it’s in the city of Columbus is I think the 12th largest city or 11th largest city in America right now.

 

Matt  27:20  

Yeah. So instead of getting 5000 people to look at a couple of homes, specifically, that are these like pipe dream for something, you know, you’re spreading this out, multi site across the greater Columbus area, across a multitude of price points. That’s not seven fits, doesn’t start in the seven figures. And you’re really allowing a margin a larger, more inclusive population of home shoppers, to get engaged

 

Jon  27:55  

in the parade. And I can even build on that a little more, Matt, that is one of the things we are consistently advocating for us in association is housing affordability. And you know, making sure that the densities approved in these communities are better so that we can and material standards and architectural standards and all the things that increase the cost of a home are there. In some places where we would go, I would bring up that issue. And they say, well, aren’t you the guy that puts on the parade of homes with million dollar plus houses, and you’re going to come to our community and talk to us about affordable housing. And I think this new format by allowing all of our builders to showcase what they do is, is something that gives us a an entree into those discussions that we really haven’t. You know, in some ways we were excluded from before and listen, I tell every market, you need high end housing. You need all housing. You know, we’re not going to solve our our housing shortage in America by just building at one price point. You need to build at all price points and we need to celebrate high end housing. We need to celebrate move in housing, new housing, all types multifamily. Yep. Yeah, right. It absolutely is. And this event is more reflective of what our association is. And and that’s what we’re excited about.

 

Matt  29:23  

I love it. I think it’s great. All right. So um, is we kind of put a bow on this conversation if you’ve got some builders that are in your area that are on the fence, and they’re not convinced of why they should hop on board with this. But like what what would you say to some builders that are considering but yet haven’t signed up for your you know, the new version of the parade of homes in the Columbus area? Like what what’s your message to those? Yeah,

 

Jon  29:52  

I think the thing that we’ve tried to reinforce is that everyone understands that the future doesn’t Targeting home building companies is in the digital space. And we have a great brand equity in Central Ohio with the term parade of homes. So when you combine that brand equity with where the future of this industry is going, now is the time to make that investment into this event. And it is an investment into the event in to your association. Because I am 100% sure that this first year, we’re going to learn some things that we’re going to change in the following years. So while things are going great, let’s make those investments, let’s fine tune this event. So that when we need to tap into it to drive up significant amount of sales, so that these companies can reach their annual goals, we’re going to be there to be able to do that. It’s going to help us in our advocacy efforts, it’s going to help strengthen our supplier relationships and our sponsor relationships. So now’s the year to invest. It is it’s their event. It’s their association, and we’re doing this for them. And, you know, my hope is that we we have robust participation and, and those that are already in, add another house, we also have a virtual option, because we are hearing from some builders that hey, supplies limited, we’re gonna have a virtual option. So you can put those floor plans and digital assets on their show a consumer what is coming, so that, you know, it hits the market, it’s ready to go. And we’ve driven interest in that. So we’re excited. It’s about investing in their business and about investing in the future. And that’s what this event is this year.

 

Matt  31:38  

Yeah, I love it. I love it. Good stuff. Alright guys, well, if you haven’t signed, if you’re in the if you’re in the Columbus area, Central Ohio, you got to sign up, be a part of the parade of homes, be a part of the local VA there if you’re not nationwide, if you’re not active, if you’re not actively involved in your h VA, or your VA or your turkey or your SMC, if you have one, what do it be be involved, they’re amazing resources for even just from networking, and just, you know, best practices and just having that advocacy there on your part and be involved. And the reward comes back, you know, tenfold in the long run that being there with your fellow business owners and companies. So john, thank you so much for coming on. Thanks for talking about what you guys are doing and how you’re moving forward. And and thanks for just listening to your own members and making those shifts. And even with such robust history. You said we got to make a shift for the benefit of our members. So thanks for that.

 

Jon  32:47  

Yeah, absolutely. And thanks for having me on. And I really appreciate the time today.

 

Matt  32:52  

Absolutely. Thanks, Jon. We’ll, we’ll have to have you back after the parade and talk about how it all went. I look forward to it. Alright, thanks, Jon. Have a great one.

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