The year 2016 was an eventful one for home building.
Improving Sales and Marketing
Remember “Wayne’s World” from Saturday Night Live? Wayne and his buddy Garth did an underground television program from Wayne’s basement, and Wayne frequently offered half-baked ideas that prompted Garth to tell him, “You’ve got to live in the now, dud...
Remember “Wayne’s World” from Saturday Night Live? Wayne and his buddy Garth did an underground television program from Wayne’s basement, and Wayne frequently offered half-baked ideas that prompted Garth to tell him, “You’ve got to live in the now, dude, you’ve got to live in the now!”
I can’t help but think how important that advice is for everyone in our industry. So often I hear managers say, “We’ve watched companies outside the industry, and they’ve taught us how to add quality to our customers’ experience. Our color selection, production, orientation and service processes have all been retooled. Matter of fact, you might as well add accounting, purchasing and scheduling to the list, too. We’ve worked hard to reinvent ourselves.”
Such a statement makes me ask, “If you’ve looked outside the industry for guidance in these areas, how come you’ve failed to look outside the industry at selling?”
Not until now did most managers realize that they haven’t totally changed.
What do you ask your sales associates to do; what’s their job? Ten to 15 years ago, that question would have been easy to answer. Today, I’m not so sure. A good part of your success depends on the answer. To prove my point, here’s an exercise:
At your next sales meeting, have each of your sales associates write down the purpose of his or her job. Just a sentence will do. When they’re done, have all the associates discuss what they’ve written.
These are the answers I see most often:
- “To sell homes by convincing customers I have a better value than other builders in the area.”
- “To show customers that my product will meet their needs.”
- “To understand my customers’ needs and show them how my product will meet those needs.”
- “To sell homes by discovering my customers’ needs, presenting to those needs and closing on them.”
Notice a common thread? The answers focus on selling or “communicating value.” This seems logical, but is that what you want your sales force to accomplish?
Communicating value means telling your buyers something you believe they should know. The majority of your sales associates probably communicate value. That has been the focus of sales training for the past 30 or more years.
But customers today aren’t interested in how much your associates have to say. For the most part, your customers already have most of the information they need. This wasn’t true 10 or 15 years ago, but it is today. Extra information only confuses them and makes them take longer to evaluate and make decisions. It wastes their time.
“Everyone out there is communicating value, still selling like they have in the past,” says Todd Menke, co-owner of Fidelity Homes in Sarasota, Fla. “Selling like this just confuses the situation and ultimately makes it harder for you to get the sale.”
If you want your salespeople to create value for customers, you need to rethink their job description. Customers need someone to help them organize, understand and make sense of the marketplace. “Creating value helps a sales associate be part of the solution instead of being part of the problem,” Menke says.
When shopping for an expensive product with lots of alternatives and potential pitfalls, weren’t you drawn to the salesperson who helped you “get your thinking in order”? And didn’t the risk of a bad decision make you more comfortable with the associate who helped you cut through the clutter and organize your priorities? Didn’t you think this associate understood you and would be there for you if something went wrong?
Still not convinced? Then think about your company’s focus. What are you asking all of your departments to accomplish? Are you pushing your service department to focus on setting expectations and delivering on promises? Are your production meetings focused on improving customer satisfaction during the building process? And are your process improvement meetings focused on adding value to your customers’ experience?
If this is the direction your company is headed, it’s fair to ask a couple of more questions. Why is your sales force working toward a goal completely different from that of everyone else in your company? And why is everyone else in your company trying to create value for your customers, and your sales associates are trying to communicate value? If you say it’s their job to communicate value, you deserve to be leaving every dollar on the table that you’re leaving there.
Have you ever wondered how effective your sales training is or could be? Or what it would take to stand apart from your competitors, gain a larger share of the market and create value for your customers? The answer lies in your sales paradigms and how you train your associates.
Sales training programs during the past 10 to 15 years have focused on how to be more efficient at selling. While this might seem like the right thing to do, is your goal to be more efficient or more effective? If you said more efficient, just keep doing what you’ve been doing. If you said more effective ...
The key to an effective training program boils down to understanding how customers shop and how they buy a home. Here’s a quick way to see if your sales training program is on target. Look at each part of your program and ask yourself, Will my sales process help customers ...
- learn the “new realities” of shopping in an information-rich marketplace?
- expand their needs beyond their current scope of thinking?
- make comparisons based on their current, present and future positions?
- organize their decision process?
- eliminate their perception of risk?
- evaluate trade-offs?
If your current training doesn’t address these questions, it probably isn’t as effective as it could be. If this is the case, use the list above to develop training strategies that will get you headed in the right direction.
Not a week goes by that a builder doesn’t ask me, “What’s the best way to measure associates’ performance and help them be more effective?” My answer is always about the same: First, quit measuring activities and start measuring behaviors. Second, develop a measurement system that includes built-in coaching tools. And third, make measurement part of your weekly routine, not just a biannual event.
It’s easy to measure activities, but when you do, you’re measuring things with no bearing on the final outcome of the sale. Unfortunately, that’s the norm for the home building industry. Builders often measure sales efficiency when they’re really after sales effectiveness. In other words, things that don’t matter are being measured.
Pull out one of your old “mystery shops” and review the questions the shopper was asked about your associate. They probably go something like this: “Did the sales associate attempt to build rapport? Did the associate make your agenda the top priority? Was the associate a good listener?” When you ask if an associate was a good listener, you are measuring an activity. To streamline your measurement program and measure behavior, evaluate your process with the following questions:
- What do I want to measure?
- What behavior defines this activity?
- Will this behavior add value to my customers’ visits?
- Will this behavior help me advance a sale?
In this case, listening creates value for your customer and is defined by confirming questions, clarifying questions and summarizing statements. In addition, it helps advance the sale. So to see if your associates are good listeners, measure the amount of confirming, clarifying and summarizing they do during each customer visit. Pull out one of your current evaluation forms and apply our “question test.” I think you’ll be surprised by how much you can improve.
Coaching for Performance
Based on new market realities, coaching is probably the most important job in your company. I predict that the most successful companies during the next 10 to 15 years will make coaching one of their top priorities.
By looking at some of the high points of coaching, you can judge if your managers are on the right track. First, coaches are in the behavior business. It’s their job to identify productive and nonproductive behaviors. In addition, they must understand and explain the strategies behind each behavior. If they can do these things, they can coach skills and strategy effectively.
To evaluate behaviors and strategies, you must be able to work with simple benchmarks or guidelines. Use these questions to evaluate your coaching program:
- Do you have a sales performance model, and do you use it as a foundation for coaching?
- Have you set aside time to shadow each associate (at least once per month) to observe selling behaviors and coach for improvement?
- Do you use daily performance diaries that allow your associates to track their performance, and allow you to meet and discuss the results?
- Do you schedule on-site meetings to discuss and improve selling behaviors, and classroom meetings to discuss and improve selling strategies?
- Do you coach for improvement with questions rather than “you didn’t” statements?
- Do you work on building habits by working on one behavior at a time?
- Do you coach for behaviors that add value to your customers’ shopping and buying process?
- Do you target an area for improvement and follow up until success is observable?
If you did well, keep up the good work. If not, work on implementing one idea at a time. You’ll be amazed how quickly you can have a viable coaching program.
The Foundation of Marketing
In his book The Marketing Imagination, Theodore Levitt calls differentiation the foundation of great marketing. He also says there is no such thing as a commodity. I agree on both counts. No matter how much you think your competition is saying, “I do that, too,” there’s a way to show customers how you’re different.
Unique selling differences are important to you and your customers. For you, differences create advantages, advantages become the focus of your marketing program, and your marketing program becomes the focus of your brand. For your customers, differences become the focus of their shopping agenda. Customers shop based on comparisons, comparisons produce differences, and differences let your customers make more effective decisions.
Customers need to understand how you’re different as much as you need to show them how you’re different. Unfortunately, many home builders follow the crowd. An improvement for them means adding a twist to what someone else is already doing. While business consultant and trainer Tom Peters says that improving on an idea is good, he adds that you first need to understand the basics and strategy behind the idea. Only then can you improve your position and gain a useful advantage.
To transcend traditional approaches to marketing, quit doing what you’ve always done or what your competitors are doing. Chances are they just copied someone else’s ideas and don’t have a clue other than they liked the way it looked. To improve your sales effectiveness, think about the questions listed below. They’ll help you focus on the details and think out of the box.
- Do you understand “who you are” relative to your competitors and marketplace?
- Would 10 random customers be able to tell you who you are, what you’re all about and how you’re different from your competition?
- Do you have a sales and marketing strategy built around your customers’ step-by-step shopping process?
- Do your marketing materials help your customers shop, or do they just tell them what you have to offer?
Your Sales Office
What’s the purpose of a sales office? Is it to sell, to present, to close the sale? By asking builders around the country, I’ve found that no one has given the question much thought. Design strategy for a sales office often boils down to asking the management team, “What’s our competition doing? Can we do something better? What did we spend on the last one?” Heck, most of the time builders just tell their managers, “Do what we did over there at our last project, it’s better than most people’s. I’ll look at the concept and colors as soon as they’re done.”
|Your sales office should help customers shop and understand how you can meet their needs.|
Even if you work hard at having good sales offices, what and whom did you have in mind when you developed your design objectives? Is your sales office designed around how you want to sell, or is it designed around how your customers shop and buy?
This leads us back to the purpose of a sales office. The purpose is to open the sale! And the objectives of opening the sale are rapport, unique selling propositions and setting expectations. Does your sales office meet these criteria, or do you devote most of your floor space to closing offices and closing the sale? And are you still stuck in the floor plans/plat map/builder story paradigm? Better yet, have you kept all your old displays and just added a retail touch? What have you done to address your customers’ new shopping agenda?
Here are a few questions you need to ask if you want to move to the next level:
- Does your office design devote more space to helping customers shop or to closing the sale?
- Could your customers stand alone in your sales office and say to themselves, “I get it. I understand what they’re all about and how they’re different.”
- Will your office displays help customers learn by comparison?
- Will your office design cause customers to be both curious and comfortable?
There are three deadly sins when it comes to sales and marketing details. The first has to do with focus. Are you sales-driven or customer-driven? If you’re sales-driven, you’re probably not focusing on your customers and the step-by-step process they use to shop and buy. If you don’t understand this process, how could you design effective collateral material that becomes a shopping tool for your customers and a selling tool for your associates?
The second deadly sin revolves around purpose. Have you defined the purpose of each of your collateral pieces — your price sheet, brochure, floor plans? Do you know how your customers use them in the shopping process, and do you understand how they should be used in the selling process? If you didn’t have a purpose in mind when you designed these materials, or if the purpose doesn’t match how your customers shop and buy, how could your collateral material be worth the money you’re spending?
Designing collateral material without defining a strategy is the third deadly sin. You need a strategy that defines how each of your marketing pieces should be used, and your collateral strategy should match your buyers’ shopping strategy, not traditional “small-sale” paradigms.
Ask yourself these additional questions to see where you stand:
- Have you prepared a design guide that outlines the purpose and strategy for each piece of your collateral package?
- Can you match each piece of your collateral to your customers’ step-by-step shopping process?
- Do you define the purpose and strategy for your collateral material, or do you let your advertising agency define it for you?
- Will each piece of your collateral material serve as a selling tool for your associates and a shopping tool for your customers?
- Does your collateral material support your brand, and is your brand supported by your unique selling differences?
Have You Changed Your Game?
I was finishing a workshop recently when a group of sales associates asked me how to handle customers who can’t seem to make a decision. They wanted me to give them a “magic pill,” a step-by-step answer. Here’s what I told them:
Now, more than at any other time in your selling career, you need to pay attention to details. That means using a question-based selling process. It means that your interview selling program must go beyond finding out what your customer wants in a new home and far beyond asking who, what, when, where, why or how questions.
To be effective with customers today and outsell your competition, you need an interview strategy that helps you understand why your customers are considering a change, what they want to accomplish by changing and, most of all, how they prioritize their values. This helps them organize their thoughts, which reduces their perception of risk.
Reducing your customers’ perception of risk is critical. Unless something makes complete sense to buyers, their perception of risk is high and their decision process is sure to be put on hold. No one wants to make a mistake with something that costs so much.
One of the associates then asked, “What do we do to make sure everything makes sense to our customers and that their perception of risk is low?” My answer was simple: The cure for risk is the interview process.
Here are a few questions you might want to ask yourself. Your answers will tell you where you need to go.
- Does your selling process match your customers’ shopping and buying process?
- Are you using an interview selling process, or are you convinced that the discovery process, “hot-button” selling and finding out what customers want in a new home are the same thing?
- Do you know the difference between interview selling and needs-based selling?
- Can you guarantee that your selling process will reduce your customers’ perception of risk?
- Is your interview process based on helping your customers organize their thoughts, or is it focused on helping your associates organize their thoughts?
Where Do You Stand?
Customers are changing every day. What mattered before isn’t important today. And the way your customers shopped yesterday isn’t how they shop today. Most of all, the way they differentiate and decide has changed, too.
It used to be good enough to have a product or community that stood out from the crowd, but this strategy is becoming harder to accomplish and more expensive. It’s too easy for customers to go down the street and find something as good and maybe even better. You need to focus on the details.
A study by sales training company Huthwaite Inc. found that the major part of a customer’s final decision isn’t based on product, it’s based on the customer’s experience with your sales associate. This means that the details of your sales process, collateral material and point-of-purchase marketing need to be some of the most important parts of your business.
When it’s time for their final decision, customers often say to each other something like, “Let’s go with Taylor. She understands us and knows what we’re trying to accomplish. She’ll be there if we need her.” What made them feel that way? The sales process.
Where do you stand? Are you positioned to take advantage of your competitors, or will they take advantage of you?