By Charles C. Shinn, Jr., Ph.D.
During the years of the severe housing recession, home sales plummeted by more than 80%. Builders fought for sales by increasing their sales and marketing budgets, discounting sales prices, giving away upgrades, customizing homes, increasing sales commissions and doing whatever else it took to close a sale. These were expensive reactions to generate sales but often it was the little things—the details—that killed a sale.
As we have emerged from the downturn, builders seem still to be clinging to some of those measures to generate sales, and Emma and I have been amazed to see many inexpensive things that are simple to correct causing losses in builders’ sales capture rates. Builders still aren’t paying attention to the details.
Keep your models sparkling. Once, I told a builder he would sell more homes if he closed the models, and he actually closed them after I walked him through the models. The entry was littered with trash and cobwebs; the entry light was broken; and the door knob actually came off in my hand. Rusty, metal hangers filled the entry closet, the models were dirty, and kids’ fingerprints were everywhere.
In another builder’s model, the stairway overlooked the kitchen, and the top of the kitchen cabinets were littered with construction trash including an old soda can. We’ve often spot burned-out lights or dead landscaping as well as settled and cracked entry stairs, walks, and driveways.
Walk your model homes with a checklist weekly and correct all deficiencies immediately.
Decorate models to demonstrate and sell homes. We see a lot of models that have too much large and overstuffed furniture. This makes the rooms look small and they become traps. Coffee tables consume a lot of space and make it difficult to move through the rooms. Any coffee tables should have clear glass tops. Remember the objective is to add color, texture, and warmth to the home while maintaining walking paths.
Keep job sites clean. It is amazing at how blind builders become to messy job sites. One builder we know proudly posed in front of a home for a cover photo of a monthly new homes magazine. The job site looked like a tornado had just gone through the community. I took a picture of the superintendent in front of the house and gave him an award for the worst looking community I have ever seen in more than 40 years in the industry. Job sites need to be cleaned at least weekly, although I prefer trades to clean daily. Make sure the trash is picked up in and around the homes under construction. The streets should be cleaned, the garages organized, and the dumpsters emptied. Home buyers relate cleanliness to professionalism and quality.
Facilitate access to your inventory home. On weekends and after hours, home buyers walk spec homes and homes under construction. Make it easy for them to access the homes with walking platforms so they don’t have to walk through the mud. Put temporary steps at the entrance and make sure the home is clean. Your homes are always on display.
Demonstrate the homes and features. During one of our community tours, we met the sales person on the entry walk. She told us she was going to lunch but the models were open. She told us that if we didn’t see what we liked, the builder would modify anything for us since he was a custom builder. In truth, the builder didn’t customize his homes, and I guess lunch was more important than a sale.
It is very unusual for us to get a demonstration of the model homes by a salesperson. Normally, they sit in the sales office. They miss the opportunity to ask about the customer’s lifestyle or demonstrate how the homes and community will fit the customer’s needs, wants, and desires. This is critical to the sales process.
More often than not we walk the homes and spend an hour with the salesperson asking questions about the homes and the community and they know nothing about us. The sales person doesn’t ask our names, doesn’t register us, and never asks about our family or our housing needs.
Don’t give away the incentives at the start. It always amazes me that the incentives are given away at the beginning of the sales presentation instead of at the close. The first thing out of one host’s mouth was that the builder had a $25,000 incentive. The salesperson, who never came out of his office, yelled to us that they could do much better than that. We asked the hostess for a brochure. She pointed to the brochures on the edge of the counter, but never got up from her computer solitaire game.
Salespeople need to relate to the typical buyer. When working with a builder in Florida we discovered that over 95% of buyers were first-generation Hispanic, and the salesperson could not speak Spanish. The saving grace was the hostess spoke Spanish. She was really the sales person. Monitor your communities to see the demographics of your buyer, and make sure your salespeople relate to that buyer.
Keep your sales staff motivated. It is easy for the salespeople to get rusty with the slow traffic and sales. They need to be kept motivated. A salesperson once told us that the previous weekend’s traffic was non-existent. We discovered that the police had picked up the bootleg signs on Friday night, but the salesperson didn’t drive the signage route on the way to the community so never knew it. The result was a lost weekend of sales.
To keep the sales people motivated have them role play with each other so they improve their presentations. The sales people should develop scripts to counter many of the objections they encounter and role play the response with each other. One of our builders has done this with his sales team, and it has helped his sales substantially.
The salespeople should practice asking open ended questions so it is second nature for them. They need to be detectives to determine the customer’s needs and how your community and homes can satisfy those needs. The days of handing out brochures with multiple home plans are over. The salesperson needs to understand the customer’s lifestyle and match a specific home to the customers.In today’s market, the home buyer traffic can be very soft and competition is increasing, but the people visiting new home communities are buyers. The challenge is to capture more of the traffic that is in the market. These details don’t cost much to implement but will substantially improve sales.