This article first appeared in the PB May 2013
issue of Pro Builder.
In many parts of the country, the news is trumpeting reports about the market coming back. In fact, as I write this article from New Zealand where I am working with a builder, the market there is also on the rebound. Good news? Maybe.
Having been in this industry for more than 40 years, I know from personal experience that our industry has always recovered from previous recessions. I contend, however, that great marketing and sales strategies are not honed during good markets, but during tough times. Some builders used the recent difficult period to reassess their situations. They found out what they were not doing correctly and fixed it. They sought answers to the questions I have posed many times: “Doing what we have been doing the way we have always been doing it, how many sales and how much revenue did we miss? How much money did we waste in the process?” Other builders did not conduct a self-assessment. They just waited for the market to come back. Now that the recovery is here, they are happy, too. But here’s the problem.
Roll tide
In speaking about his tax reduction proposal during 1961, President John Kennedy said, “a rising tide floats all boats.” That economic statement can very well apply to today’s housing resurgence. Simply stated, if your market is on the rise, it’s rising for all builders. The impact of a rising market is proportional. Builders who transformed their operations will enjoy increased sales. Those builders who did not also will see increased sales production.
But as Shakespeare wrote, “Therein lies the rub.” Builders who did not work to perfect operations during the downtime have no right to expect these increased sales. Builders and their salespeople will think the additional deals they’re closing are their doing. I recently saw Facebook postings like, “I had 8 sales this week!!!! Wow, I love this business,” or “So many buyers and so little time.”
When the market is bad, no salesperson is as bad as a builder thinks they are, and when the market is great, no salesperson is as great as they think they are. If salespeople did not dramatically improve their skills during the slowdown and are doing the same things they did before the market was tough, then the additional sales they think they are creating during this recovery are merely the result of the rising tide. The downside is they are missing additional sales because the market is providing a false sense of accomplishment.
Be proactive
There is no such thing as status quo. Either you are moving forward or moving backward. The challenge is that without properly implementing fundamentals and measuring the critical metrics of your sales business, you won’t know the difference. Among other things, here is what proactive builders are doing:
Provide proper staffing.
• Operate with the assumption that you are in retail, not the real estate business.
• Be open for the convenience of the customer, not for the convenience of the company.
Establish a culture of sales education and training with high accountability.
• Understand the criteria. New home sales should not merely be a social event in which business is conducted some of the time. Rather, selling is an activity where salespeople must be focused and social. Changing behavior relies on training, and you need your sales team to develop such skills as demonstration and closing tactics. As the legendary sales guru and motivational speaker Zig Ziglar said so well, “Motivation in the absence of skill development is simply a wasted effort.”
• Inspect what you expect. Evaluate the new-home sales process by practicing role playing and conducting videotaped mystery shopping evaluations.
• Manage by wandering around. A desk is a dangerous place from which to view your sales operation.
Develop a passion for the critical, important business metrics. You can’t manage and therefore improve what you don’t measure. Constantly measure and analyze sales activity against pre-determined goals and by conversion ratio. Constantly measure and analyze the cost of traffic generation and sales by source and by activity in order to maximize return on investment.
Words of caution
There are no silver bullets, secrets, or a magic wand to wave that will help you to obtain optimum sales revenue. Nineteenth Century Austrian writer Marie von Ebner-Eschenbach said, “No one is so eager to gain new experience as he who doesn’t know how to make use of the old ones.”
Sales operations that are not employing the strategies and tactics mentioned above—even those departments that are posting increased sales during this upswing and feeling pretty good about themselves—I guarantee are underselling their potential. The market might be improving, but the critical question is, are you? PB
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 bob@newhomespecialist.com.
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