Builders should not be in the business of selling their creations, Robert J. Lucido says.
That may seem like backward thinking. Where would builders be, after all, without buyers?
Yet Lucido has built his career on just that premise, and builders have gladly taken the advice.
Builder clients of the Columbia-based sales and marketing firm Builder's 1st Choice leave the selling of their homes to Lucido, whose business it is to know why some builders fail where others succeed.
Most, he says, are simply too busy building to step back and consider the appeal of the two-story foyer or placement of the optional den.
For five years, Lucido and his team of new-homes specialists have acted as extensions of dozens of area building companies, becoming their eyes and ears in a fiercely competitive marketplace, recruiting and training salespeople to staff model homes, and scoping out suitable building sites.
His company has grown into one of the largest firms specializing in new homes in the state, representing more than 100 communities and about 50 builders in Maryland, Pennsylvania and Virginia.
As Lucido has expanded, adding departments for training, market research, advertising and land development -- his business philosophy has neatly converged with his pitch to potential clients.
"You shouldn't be selling houses," he tells the builders he spends his days visiting. "You should be looking for land and expanding your business.
"You don't do your own plumbing and drywall, so why would you think you can do this better?"
Some typical builder responses: "I want control" or "I can save a few dollars." But others have turned to Builder's 1st Choice to get the presence and resources of a much larger company instantaneously.
"We were a small builder and they elevated our company to the next tier of homebuilding," said Mark Powers, vice president of Westminster-based Powers Homes, which builds single-family homes in Carroll County.
"To go in-house, especially initially, would have required a whole lot more time. We got the experience instantly."
Some large builders -- Ryland Homes, for one -- prefer to keep all sales and marketing functions in-house.
"For Ryland, it's more of a philosophical thing," said David Heneberry, Ryland's vice president of marketing. "I don't think one way is right or wrong. Each company has to make that decision. For us, the sales team is the backbone of the company. What land, what products, what people are looking for in terms of new design is very important.
"We feel an internal sales force can more intimately know the products and they have the closest contact with our customers."
But other builders don't have such options.
"We build houses. We're not salespeople," says Carol Williams, who, with her husband, operates Manor Builders Inc., now building townhouses in Randallstown and Havre de Grace and developing property in Owings Mills. "It's very hard for a small builder to maintain its own sales staff," Williams said.
"It's better for us to hire someone experienced in a particular field, rather than try to do it ourselves."
That way, hiring, firing and training is left to someone else, Williams said. Builders who contract with Builder's 1st Choice get one sales as- sistant and one sales manager for each community.
"They put the sales personnel in front of us and we interview to get the best sales person for the job," Powers said. "They have so many builders they represent, they always have a large pool of candidates they can present to you. Otherwise, we would have to go out and pound the pavement to get a salesperson."
To maintain his staff of 150 salespeople and 14 managers, Lucido stays on constant lookout for new recruits, interviewing about 50 potential hires a month. Some have worked for homebuilders or sold real estate. But in Lucido's view, energy and the ability to learn the Builder's 1st Choice way count more than home sales experience.
"We want to nurture them," he says. "They have to adopt to the strategy. We don't want any prima donnas."
All must attend regular training sessions run by a staff training director. Those who succeed at selling are promised management promotions.
At 38, Lucido knows what it means to work your way up.
He began selling new homes in Howard County when he was 18. He worked for several builders before becoming a principal of Columbia-based American Properties, where he started the new-homes division.
In 1991, he resigned and, with Pam Meding, a former sales manager for Winchester Homes, started New Home Marketing Group Inc., now Builder's 1st Choice.
The fledgling business began with 20 employees. About 10 builder clients followed Lucido from American Properties, which earlier this month was purchased by O'Conor, Piper & Flynn.
Lucido wanted to set his business apart by focusing only on new-home sales. Some builders sell homes by multiple-listing them with general brokers, who sell previously owned and new homes. Some brokers have separate new-homes divisions. According to a 1992 survey by the National Association of Home Builders, 38 percent of member builders use an in-house sales teams, 33 percent use brokers and 37 percent use a combination of both.
Jim Thomasson Jr., president of PCS Homes in Annapolis, had tried all methods of selling -- an in-house sales force when he worked with his father's company, a general broker and, most recently, Builder's 1st Choice.
Brookfield Builders, the senior Thomasson's company, had employed up to 16 salespeople, but had to lay off many of them when the market soured more than a decade ago.
When sales picked up, Thomasson chose to list PCS' homes through a broker, who stationed salespeople at model homes. But those salespeople also sold resale homes and property outside the community.
"We were finding it was difficult to keep the interest of the salesperson in our best interest, to sell our community," Thomasson said.
Since contracting with Builder's 1st Choice in 1991, Thomasson said, he has also used the company's land services. Knowing that the builder wanted to expand from Baltimore and Anne Arundel counties into Howard County, Lucido's firm found land in Columbia and introduced Thomasson to the owner. PCS Homes now is building 98 townhouses there.
When a client is planning a new community, Lucido typically starts out with a market analysis, sizing up the competition and making recommendations on pricing, home models, new products.
Ron Wildermuth, head of the market research department, compiles some information through consultants' reports, but gets much of it firsthand, going undercover as a buyer and visiting new-homes communities and model homes. He presents clients with comparisons of square footage, construction costs, standard features, options and amenities.
"Based on the competition, here's what your niche should be," Lucido says the analysis shows. "Our reports tell you specifically how to beat the competition. If you don't beat the competition, you will be out of business."
Now developing a community called Cambria in Annapolis, Thomasson of PCS Homes has based numerous decisions on Builder's 1st Choice market research -- deciding to build homes ranging from 2,400 square feet to 3,200 square feet, pricing homes from $275,000 to $350,000 and offering features such as open foyers, two-story family rooms and rear staircases.
Market research even plays into model decorating decisions. For instance, homes geared toward a maturing family might show a home office. Homes for first-time buyers might display a child's bedroom in the same space.
Pub Date: 8/25/96