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This article first appeared in the PB July 2013 issue of Pro Builder.

Consider that all traffic is not the same, costs the same, nor does it convert to sales at the same rate. New-home sales is a contact sport and a numbers game, so traffic can be defined as the number of contacts a builder’s sales organization makes directly with a prospective buyer.

To answer my question—Doing what you are doing, the way you are presently doing it, how many sales and how much revenue are you missing?—here is a checklist of some key areas to focus on for capturing more sales from the traffic currently being generated.

Staffing and Availability

You are in the retail business, not the real estate business. Individual potential buyers who constitute what is called traffic are far more likely to buy if they come into personal contact with a well-motivated and skilled sales professional. Pay attention to the advice of retail genius Sam Walton: “To be successful in the retail business, be open for the convenience of the customer, not the convenience of the company.” The time between Thanksgiving and Christmas is harvest time in retail. During that period most stores report as much as 50 percent to 80 percent of their sales revenues and profit for the entire year. To maximize that opportunity they staff up and stay open longer hours. For most builders, weekends are similarly harvest time. Most potential home buyers work during the week and have weekends to shop and compare. Regrettably, I see too many builders’ sales offices are not open for the convenience of the customers, in particular on weekends. That oversight can be easily fixed. By simply keeping weekend hours, more contacts will be established. Another mistake is the one-salesperson phenomena. If at any time during the weekend there is at least one more prospective customer than salesperson in the office at the same time, sales are potentially lost. This imbalance is easily fixed by recognizing that one good new-home salesperson working in concert with a well-trained and motivated associate (assistant), in particular on weekends, will out-sell two of the best salespeople working without an assistant.

Sales Readiness

Assuming proper retail staffing, the next step is to assure that each of your salespeople is contact ready. Providing more traffic to any sales person who cannot consistently demonstrate extraordinary presentation, communication, and sales skills congruent with diligent follow-up is simply wasting valuable resources and giving them more chances to fail.

Ranking the Quality of Traffic

Since all traffic is not created equal, it’s critical to properly assess the traffic that is generated. Individual units of traffic should be ranked or rated based on what a salesperson has found out about that customer regarding their level of being ready, willing, and able to buy, rather than how they feel about them. If a customer does not buy on the first visit, the ranking will directly impact the quality and diligence of the follow-up.

Measuring Conversation Rates

W. Edwards Deming laid it all out when he said, “You cannot manage nor improve that which you don’t measure.” But as they say in the computer world, GIGO—Garbage In, Garbage Out. Consequently, getting as close as possible to recording and accounting for all traffic, not just what is perceived to be the good ones, should be your goal.
By Source: Tracking the genesis of each particular unit of traffic and its conversion to sales, e.g. website, advertising, Realtor, referral, signs, and social media, is critical in order to know which types of generated traffic are providing the highest conversion possibilities. Understand that a Facebook “like” is not a unit of traffic unless and until it comes into personal contact with someone in your sales organization.
By Subset: The more you review and measure those elements, the more likely you will develop a passion for the important metrics that will increase conversion ratios. You also will discover that new-home sales, as a numbers game, is much like what was portrayed in the book and movie, “Money Ball.” Then you can begin to drill down among other activities and events such metrics as the following:
1. Sales by customer visit—what percent on the first, second, third, and beyond.
2. By the number of customers taken through a full presentation and to a home site or completed home on the first visit.
By Cost: When something becomes personal, it becomes important. Traffic generation for builders paying the bills is just that. So reviewing the costs related to the various sources of traffic and their conversion rates will provide insight and desire to focus on more cost-effective and productive activities. For example, in my seminars around the world I always ask salespeople this question: “Would you like me to recommend to your company that they increase the rate you are paid for making sales? As you can imagine, without exception, the answer is always a resounding “yes.” Knowing that in their particular company the cost of producing one unit of traffic is $500, I then say what if we stationed an independent auditor at their sales office to track all the traffic generated. At the end of each day, the auditor presents an invoice for that number multiplied by $500 to be paid by the salesperson, whose compensation was already adjusted upward. When asked if they want me to make that recommendation, no one (except the builder) said, “yes.” Then I ask, hypothetically, if this scenario did occur, what would you do differently? The majority of salespeople answered “better follow-up.”

Follow Up

For traffic that does not buy on the first visit, diligent and consistent follow-up is vital. Consider that follow-up, or follow-through as my colleague Steve Hoffacker calls it, is just an extension of the first contact. It must be planned, practiced, and orderly with the purpose to get the customer back in one more time. My CIP System (Customer In Process Analysis and Action Plan System) is designed to do exactly that. To obtain a complimentary copy of CIP and “How to Increase Registered Traffic to Measure,” contact me at