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Berkshire Hathaway
Marketing Clayton Housing

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By Goofyhoofy
October 22, 2007

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Well, I earlier linked a story in our local paper about the Clayton "Parade of Homes" this weekend here in our little burgh. It being Sunday and the Mrs. and I having nothing better to do than something productive like pay bills or mow the lawn, we thought we might spend an hour or two going to the show at the Convention Center - and so we did.

The newspaper ad told us there was no admission, unlike other "home shows", and as we drove up we were greeted with signs leading us to "free parking" as well. Perhaps we should not have been surprised when, once inside, we were offered free coffee, free coke, free popcorn, and free hotdogs, among other enticements.

Anyway, what interested us most was the variety and quantity of offerings; there were 30 or so manufactured houses, all fully - and perfectly - set up in a "community" complete with landscaping, black rug (to simulate an asphalt street) between them, and green rug (to simulate lawn) edging each and every "house." We found not one inch of concrete floor (except in the rest rooms), everything else was covered with plants or mulch, decorated, or otherwise disguised. A tasteful sign, such as a realtor might put on the lawn, gave the specs of each house: number of bedrooms, baths, square footage, and retail and show price (usually about 15% less.)

The homes varied from low end housing - paneled walls, Formica counters and vinyl siding to high end manufactured - drywall construction, granite countertops and vinyl siding (they gotta do something about that), from $70,000 to $270,000; from 1200 to 3000 square feet, from $38/sq. ft. to $80/sq. ft construction. Some of the units were truly impressive, and once inside you would have no idea that the house was "pre-manufactured." That was not true from outside, but inside the Clayton (and presumably other) designers have discovered glamour bathrooms, generous closets, open-space design, hardwood floors and all the other modern wants of the housing industry. The exteriors on the more expensive models have improved, but still have room to improve.

We engaged one salesman for a few moments, who said they would probably sell 200 units that weekend. Indeed, there was a tote-board overlooking an area full of tables (for the hot dog eaters as well as the deal makers) on which were scribbled the names of the first 144 who had signed as of about 1:00 this afternoon. 200 times an average of $100,000; that's a $20 million dollar weekend for Clayton just in little ole Knoxville, TN.

The salesman also told us that they had been "planning this" for six months, and that the "construction" had taken over a month; in other words, Clayton had to rent the convention hall for close to two months (counting show time and de-construction time), rent the parking lots, and (I surmise) pay off the Convention Center to allow them to give away food rather than have the usual $4 hot dog concessionaire at work. Not an inexpensive selling proposition, but it seemed worth it.

The floors were busy but not crowded. The salespeople were unerringly polite, not at all pushy, and plentiful. Besides the "community of homes", there was one large gathering area in the center with tables, and another off to the side where people could sign up for mortgages; they seemed busy but not overwhelmed.

The one comment that Mrs. Goofy and I kept remarking over and over was how much "class" the place exuded; but then perhaps we just had our expectations too low. (Before you hit me with the "snob" comment, I will mention that when she and I worked at HGTV we tried to get a series, or even a special greenlighted on manufactured housing/decorating and design and were laughed out of the room. More than once. We've been gone five years, they still haven't done it. Probably never will.)

We also remarked on the brilliance of the marketing and staging. Every home was furnished, and well furnished with upscale furniture and accoutrements such as are unlikely to be found in the homes once they are purchased and sited. (The salesman told us that the furnishings were available to purchasers "at extra cost.") Each had a flat screen TV (an actual working one, not one of those fake cardboard imitations you see in the furniture stores); most had a new washer/dryer unit (usually front loaders), all had the full compliment of kitchen appliances, usually in stainless steel, always with a brand name like GE or Maytag. Side displays showed a range of options for cabinetry and bath fixtures in everything from bronze to brushed nickel to the usual chrome.

Every single home we entered (perhaps half) was warm, inviting, lavishly but not ostentatiously decorated, and would be the envy of any of our neighbors, or us, if we cared that much about such things. Back to the tote board for a moment; it was apparent that it was the low and middle which were selling - some had over a dozen sales of a single model. The high priced, California style, back porch bar-b-q model (at $268k, our favorite), not a single sale. (The salesman was honest enough to say that the low end sells well, but has hurt the industry as those owners tend not to take good care of their housing, which then deteriorates, which causes people to think that "manufactured housing" isn't of good quality; lather, rinse, repeat. "It's like any other house," he says. "You gotta paint, fix cracks, replace the water heater before it leaks...")

But I digress. From the entry into the Convention Center itself to the overall "neighborhood" effect to the staging of each of the units for sale, all in all it was a most enjoyable afternoon, and an impressive display of taste and marketing acumen on the part of Clayton. We looked for Warren up in the skybox where there were a couple of suits occasionally peering down, but he didn't seem to be there. Heck, if I knew what Jim Clayton looked like I would have gone up and congratulated him, too, but I was happy enough munching on my free popcorn and didn't look that hard, so he'll just have to make do with his $20 million weekend and not my personal homage.