A re-emerging market sounds like a good thing on the surface. The perception is that economic conditions are better and new homes will sell faster. Overall, that’s good. Having been actively engaged in this industry through past recessions during the early ‘70s and ‘80s and the boom times, I have always said, it’s not about what the market does. What matters is what you do with the market you find yourself in. A re-emerging market can provide a false sense of optimism and perception of success. A rising tide floats all boats; so does a re-emerging market. As more homes begin to sell, all of the players involved in sales eventually will get some benefit from the momentum alone. But good markets cover up and forgive a lot of bad processes and business errors.
To keep everything in perspective, you should always be asking, as I’ve written before, “Doing what you are doing, the way you are currently doing it, how many sales are you still missing?” Don’t get caught up in the exuberance of suddenly increasing sales activity because it may not last forever. Don’t allow the deals the market is allowing you to enjoy lead you into complacency. Stay focused on the essential fundamentals of variables you can control, and don’t worry about items you cannot.
Stay dialed in to the important benchmarks for measuring your sales success. The most important are completed sales that ultimately close and fund the builder. Other benchmarks include the following:
• Conversion ratio of sales to the number of potential buyers with whom you interact.
• The source of a lead can determine that conversion ratio potential. For example, someone who visited your website and then contacts you is not a first-time visitor.
• Realtor-accompanied prospects have a higher conversion possibility in the short term than someone who has just started looking, has a house to sell, and is not sure they even want to move from the area.
• Become intently focused on implementing the correct process and measure those benchmarks all of the time. The end result will be just fine.
• Again ask yourself, “Doing what I am doing, the way I am presently doing, how many sales have I missed?” Your insight to the minor adjustments you need to make will become abundantly clear, and the marginal increases in your profit will be significant.
As the market continues improving, there will be more traffic to convert. You must work more efficiently to increase your conversion ratios. Make every prospect walking through your door count. When they show up at your sales office, they are at least thinking more positively than in recent years about buying a new home. It’s your job to have a solid, planned presentation to help guide them through the buying process. Cause them to think it through. Get them to recognize that, even though interest rates have not yet risen, they will. Right now rates are still the lowest, on average, they’ve been in 50 years. Make them aware that construction costs are going to continue to increase rapidly. Explain that now is the best opportunity they will have to buy, and they should do it sooner rather than later. Impress upon them that their buying power will never be greater than it is right now.
In an extraordinary market, it’s easy for ordinary salespeople and builders to look successful. But as the recent difficult economy demonstrated, being an extraordinary salesperson or successful builder takes hard work. Those salespeople today who keep a clear focus, stay informed about their marketplace, perfect their presentation, are as diligent as they were when the market was tough, and maintain a PHD attitude (professional, hungry, and driven), will consistently achieve optimum sales performance and outsell the market. Last but not least, don’t confuse your increased cash flow or the size of your paycheck with your business acumen or operational sales excellence.
Bob Schultz is president and CEO of Bob Schultz & The New Home Sales Specialists, a management consulting and sales firm based in Boca Raton, Fla. Schultz is the author of two best-selling books, “The Official Handbook for New Home Salespeople,” and, “Smart Selling Techniques,” and was named a Legend of Residential Marketing by the NAHB. He can be reached at [email protected].