Builders can gain a marketing edge by using video and virtual reality as selling aids.

Video and virtual reality (VR) are changing the way communities are sold. And builders who jump onboard the video and VR bandwagon stand to give their marketing program a big boost. Builders are using video technology to film, digitize, and present their communities online through streaming media and in sales presentations on DVD. When they do not have product, communities or amenities developed, they can invest in virtual reality to render plans, amenities and, in some cases, whole communities digitally long before they are built. VR can be renderings resembling a photo or they can be made into animations that resemble a movie providing a fly-through or walk-through of the products. Using these technologies, builders can help consumers see or vividly imagine the amenities and the lifestyle they might enjoy if they purchase a given home.

With the growing popularity of new home show television in some markets and the savvy use of VR by builders, these media are becoming an effective part of the marketing mix. Potential benefits include:

• Supporting pre-sale campaigns.
• Eliminating model home costs.
• Enhancing option revenue.
• Driving qualified traffic to fantastic, but remote locations.

Pre-selling communities is becoming more important to builders. In some cases, a percentage of pre-sales may be required by financial partners. In other cases, the very nature of the community makes video important. In other cases video and VR are ROI-driven. Reducing model costs is always a strong motivation. According to Frank Guido, president of Aareas Interactive, "It's easiest to justify [VR projects] when there will not be models for a while or the builder is planning not to have models."

Builders can also use VR to help sell options and new home technology upgrades. Home shoppers will not only make decisions faster at the design center, but will often buy more. "If I create the models, I will be able to use them to visually sell options and upgrades," says Guido.

Not Exactly Breaking News

VR is not new to condominium developers. One early adopter is Tridel (www.tridel.com) in Toronto. Tridel builds 1,600 to 1,700 condominium units in the Toronto metro area each year. Its use of VR began more than 10 years ago with Aareas Interactive. Building high-rise projects, Tridel needed confirmed demand before fully committing to a project. "We don't go forward without a large portion of our sales accounted for," says Jim Ritche, vice president of sales and marketing for Tridel.

It's no longer a question of what results Tridel expects from a VR project, it is simply part of the sales and marketing process in every project. "85 percent of our prospects go online before their first visit," says Ritche. At this point the process is well defined with most of the action online and via email. It starts with onsite signage to drive Web site visits eight to 12 weeks before sales begin. Over that period of time, it will send bits and pieces of information to subscribers on its interest lists. Messages might include a recently complete rendering of an amenity or initial floorplans.

"We take real imagery and mix it with VR to make it come alive. It empowers the consumer to understand the project. It's much easier to sell when the consumer understands the project," says Ritche. Video is also possible in these types of projects. In one high-rise project, called 1505 Elm, by Lazarus Companies, video was used to show the potential lifestyle and to drive physical traffic. The developer worked with Crozier & Henderson Productions (www.hotonhomes.com) to produce a video highlight of the vision for the project. It then used the video in both the sales center and on television. This allowed the developer to show the area lifestyle and potential views before the building was built.

It helps if the builder gets the developer and real estate community involved in use of videos. Developers can talk about the vision while Realtors can reinforce the opportunity and endorse a credible developer.

When to Use Video/VR

VR can be cost effective in a number of applications. It can help place the buyer in the end product before it is built and establish a clear vision of the end state. However, VR generally becomes part of the pre-sales marketing mix for one of two reasons: models will not be available for viewing for some time, or the amenities will not be available for some time in an amenity rich community, VR can help demonstrate to-be-built amenities, but video can be better for evoking emotional feelings. Combined video and VR can make communities come alive. According to Phyllis DeWitt of DeWitt Marketing, customers who have seen a construction on video "walk in the door as a much more qualified prospects."

DeWitt and her company made extensive use of video and VR in pre-marketing activities for Savannah, a Huffines Communities development in North Texas. She says video has helped not to just draw traffic, but drives better-qualified traffic. For many builders, particularly in stronger markets, getting better-qualified traffic is what new home marketing is all about.

But what can a builder have a video of when there are no structures, or amenities built? Some developers have created compelling video through clever use of stock video, stills, and high quality renderings.

Video can be a builder's best friend when it comes to showcasing lifestyle. It can be enhanced with high-quality renderings. And as a tool for bringing testimonials alive, it is unmatched.

Blair Kuhnen is a partner at Realty InfoLinks, Inc., a Dallas-based interactive marketing company serving the homebuilding industry.

Making the video work

These tips on how builders can make an effective marketing video come from Clint Henderson of Crozier & Henderson Production.

• Focus the work on a target audience (Realtors, consumers, etc.).
• Break up the video into manageable segments (the amenity center, the golf course, etc.).
• Combine the video with text to reinforce the message.
• Deliver educational value.
• Use testimonials.
• Use real people, not actors.
• Let the community sell itself.
• Tell the community's story.
• Distribute the video widely (online, on a DVD, in VHS format, etc.)

Guidelines for using virtual reality

Fully animated virtual reality (VR) projects can be expensive. But if a builder thinks it might be a good fit for one or more of his communities, it may be worth it. We asked several vendors to give their thoughts on the subject of what it takes to make a VR project successful. Here is some of the advice they offered builders.

• Pick the community well. VR has the largest bang when either the models are a long way from being built (or may not even be built) or the community is amenity rich but prospects will not be able to see these for quite some time.
• Make sure your plans (products, amenities, etc.) are fully established before you start or you will find yourself over-budget, late, and with a few more noticeable gray hairs.
• Make sure you have the whole internal team including sales people and executives on board. Then put a single person in charge of managing the process with the vendor.
• Integrate the VR into your sales process. You need to envision how the VR becomes part of the sales process.