Saturday, February 2, 2013

Blu Homes – Marketing Geniuses or Publicity Hounds

Just a few years ago, I wrote an article about a start-up called Blu Homes and how they had to threaten Michelle Kaufmann with legal action to stop her from using the designs she had sold Blu Homes, especially the Breezehouse.

They had a factory in New England for a short while before closing it and moving to the West Coast and setting up their enterprise in an abandoned ship yard in Vallejo, CA. I know they weren’t building a ton of homes at that time and from what I learned from vendors, they still aren’t setting any records, but I digress.

The Blu Homes factory in Vallejo, Ca factory. 
Last year they apparently received a huge investment, reported to be $60M +/-, telling people that is was to be used mostly for marketing and promotion. For that kind of money, they could have bought factories in the South, Northeast, Midwest and the Southwest and still had money left over. But they didn’t.

Instead, they went on a marketing spree the likes of which the modular home industry hasn’t seen since the glory days of New World Homes, which isn’t a factory, just a builder. If you follow Facebook, they promote themselves more than Toll Brothers and Ryan Homes put together. Pictures of wine and cheese “Open Houses” and catered tours of the Walker Zanger design gallery in NYC on Facebook along with YouTube and Twitter make their marketing skills second to none in our industry. They have peddled their homes to more tree hugging, green and national news media than all the other modular factories in the US combined and still don't have much to show for it.

Along with all this self promoting, I’ve begun noticing that they are investing heavily in Google advertising with banners and logo boxes showing up just about every time I search for something ‘modular’ or ‘prefab.’ These are very expensive and I guess it won’t take long for them to burn through a portion of that investment money. I’ve decided to click on their banner and logo every time it pops up and keep track of it. My goal is to help them use a some of that $60M on trying to win me over to buy a Breezehouse or at least get an invitation to their next wine and cheese party.

With their factory in California, why are they shipping their homes 3,000 miles back to the East. Yes, I know they fold (what is up with that anyway?) and can be shipped easily by common carrier but why would someone pay that much for a home when there are factories much closer, like Epoch Homes and Westchester Homes that could build a non-folding home that actually has much more appeal for a small fraction of the cost of a Blu Home.

Don't tell me that Epoch or Westchester couldn't have built this house instead of shipping it almost 3,000 miles
Oh, wait a minute. The home they promoted with that infamous wine and cheese party is a ‘model’ home. Another home they shipped east was for a couple in Maine that must not have realized that there are other modular factories closer or maybe they are related to someone at Blu Homes. That home had to have been $300 to $400 a sq ft and could have been built for less than a $100 by an east coast factory. My God, that couple could have bought a Clayton iHouse fully loaded with every option for about $100K delivered and set up. Marketing!

Their website lists just about every house they have built or are about to build and adding them up only brings you up to what a real modular home factory builds in a month. In fact, I worked for several factories that could build that many in a week and without all that marketing effort! 

They even supply an interactive map showing the approximately 30 homes they've built in the entire US so far. What is that? About 10 a year! 

So what does little old Modcoach predict for Blu Homes? Unless someone steps up and starts a sales effort to match their phenomenal marketing efforts, they will become just another victim of an investor replacing the owners with their own people and the company changing to look and act just like the other modular (prefab on the west coast) factories.

Let’s hope that their future doesn’t rely on more of Walt Disney’s nephews buying a Blu Home.


Anonymous said...

Hey Coach, way to stir up the pot. If someone from Blu Homes doesn't comment on this, then I can only imagine that heads are about to roll over there. I had never heard of them until you started writing about them and have watched as you went from total support to this latest article that seems to paint a very strange picture of a very strange company.
It will be interesting to read the comments and read what happens to them next.

Anonymous said...

I agree with the above comment. Coach is an instigator and will burn in eternal fire for pointing out that a modular factory that builds fewer homes than a typical stick builder can generate that kind of investment.
I would love to know where they manufacture the fools that give money away to foolish ventures. I'll bet the investors on Shark Tank would have laughed Blu Homes off the show if they had showed up asking for 60 million dollars.
P T Barnum was right, there's a fool born every minute.

Anonymous said...

My vote: Publicity whores.

Anonymous said...

I just noticed a Blu Homes full page full color ad in Elle Decor's most recent issue. If they run the ad just once it costs $90K but if they run it 10 times it costs
$77K. More evidence of runaway marketing egos.

Coach said...

I think it's interesting that Westchester Homes just celebrated their 6,000th home and all without taking out a $90K ad in Elle Decor.

I stand by my prediction that the people that have invested all this money with Bill Haney's Blu Homes will soon want something to show for it besides wine and cheese parties and slick magazine ads.

Anonymous said...

What a year it has been for this company. More money more self promotion more layoffs more restructuring more consolidation and a few homes booked.

Anonymous said...

Blu homes has fewer bookings than ever. The Management doesn't know a thing about building homes. They know a lot about marketing. They keep implementing huge staff layoffs and then promote the very management that is sinking the Blu ship. Buyer beware.