New Home Sales: Preparing For The Main Event

NEW HOME SALES

Practice makes perfect, and simulated selling helps your salespeople show what they know.

Bob Schultz, Contributing Editor

April 29, 2014

The World Series, Super Bowl, Winter Olympics, March Madness, and the Masters: These are the main events for athletes, stakeholders, and fans. Yet from the hundreds of thousands of people involved in these sports, only an extremely small percentage ever get to experience the thrill of competing at the highest level. Those who do are the most talented and highly trained whose skills have been constantly tested and evaluated against the highest standards. No one is there simply because they love the sport.

In new-home sales, the main event occurs every single time a sales representative interacts with a customer. The stakes are high, and costly. Conversion ratios are the scorecards, and customers are the judges, referees, and scoring officials. There are no mulligans or timeouts here. Preparing salespeople to be capable and ready to perform always at the highest level of effectiveness for each main event is the collective and joint responsibility of everyone who spends company resources on marketing. It is the supreme obligation of everyone in a position of sales management. 

 

As with coaches who direct athletes in the pursuit of championships, here are a few essential tips for sales managers: 

 

1. Have the right players.

2. Create a system to educate through curriculum, train with a purpose, coach with a passion, and evaluate with accountability.

3. Implement consistently, congruently, and constantly, and then do it all over again. 

 

Following the wisdom of the English philosopher Herbert Spencer, who said nearly 100 years ago, “The great aim of education is not knowledge, but action,” here are two specific activities that should form the foundation for any new-home sales training program. 

 

Simulated Selling 

Formerly known as role playing, most people don’t like simulated selling, which is exactly why they must do it. By doing so, they are demonstrating conscious competence. In other words when they can show it, they are showing that they know it. Practice makes salespeople better just as a flight simulator does for fighter pilots, controlled scrimmage for football players, and the driving range for golfers.

  

Two more rules:

  

1. Never ask a salesperson to role play (simulate) a scenario that you have not taught them already and given them the opportunity to learn and practice.  

2. When performing simulated selling exercises, if it is not performed correctly, stop, critique, correct, and coach.

 

“Please don’t make me role play, it makes me nervous,” is a common and universal response to the concept of role playing, typically followed by, “but you ought to see me with a customer; wow, am I good.” Don’t take them at their word. Instead, hone their skills through role playing.

See-Me-With-The-Customer Evaluations 

The performance of athletes in games and competitions is video recorded so they can learn from it. Similarly, the proper use and implementation of video shopping the sales process is the shortest road to developing a highly successful new-home sales team. The results clearly show the appearance or absence of unconscious competence. Two common objections I frequently hear from builders and sales managers about shopping is cost, and I have heard salespeople say they don’t like it or need it.

 

But after spending hundreds of thousands, if not millions of dollars on land, models, decorating, advertising, and other marketing costs, the investment in shopping becomes totally insignificant and will provide high dividends by capturing sales that are now being missed, while marketing dollars are simultaneously being wasted. As for the “I don’t need it” denial, for professional new-home salespeople, these videos are the most important movies they will ever watch. I strongly recommend three mystery video shops per year, per salesperson. This frequency is a minimum level of acceptable evaluation. Take heed of the words of General Norman Schwarzkopf, who said, “When placed in command, take charge.”

Real-World, Real-Time Relevance

Christie Redner, director of sales, Schaeffer Family Homes,  West Berlin, N.J., is a practitioner of these strategies and tactics. Redner says the following:

 

“I have learned through results that consistent involvement with simulated selling exercises and shops with high accountability are critical to the success of my sales team. We take training, accountability, and evaluation very seriously, and I train everyone personally. Every time I do it, I get better. Training all new hires immediately has become part of our culture. Among other things, simulated selling presentations are a constant. We have classroom for a full day, then we do role playing and learning in the field or during a model home demonstration. From that point on, the new hires are sent off to learn, memorize, and show that they are progressing within the timeline we’ve established. I set up one-on-one or small group training in the sales offices to role play the scripts. The most important thing with this is to stop a salesperson immediately if they are not properly presenting. They use their phone to record themselves practicing, then evaluate, correct, and improve. As Bob says, ‘Competence leads to confidence.’ Once they know what they are talking about and learn the correct way to ask appropriate questions and more, they now are free to be themselves.

 

After the salesperson has had a couple of weeks to become comfortable in simulated selling situations, we sit down for the first coaching session of preparing for the main event, which we call the see-me-with-the-customer evaluation. The score sheet is reviewed and the purpose of the mystery shop is explained and discussed. When someone knows that they are going to be shopped, they will do everything in their power to be at their best, which is a display of conscious competence. I give them that push to learn it now rather than later by sending out the shoppers as soon as I feel they are ready. I don’t wait too long for fear that they will start learning the wrong way, and changing a bad habit is harder than learning the right way from the beginning. If they know shoppers are out, I promise you that every single prospect that walks through the door during that time period experiences the best my salesperson can do at that time. After the mystery shop is complete, they watch the video on their own without scoring. Then they watch it again and score, and once more again for good measure, just to listen to it.

 

As Bob suggests, the difference between the first shop and the second shop is what matters. One of our most significant training successes proves this. We recruited a salesperson from retail, with no new-home or real-estate sales experience. After she completed phase one of our training program, her process was evaluated by a first shop. Expectedly, the score was just okay. Then we moved into phase two. As planned, after a short time, she was ready for her new and improved evaluation process. Her second see-me-with-the customer evaluation was amazing. Bob said it was one of the very best he had seen in many years. Within their first week, this video is now required viewing for every new hire because it forms the basis for understanding my training objectives. As a manager, trainer, and coach, I evaluate myself on how well my sales team does with their simulated selling exercises, and ultimately on these shops. When they succeed, I succeed. If you have highly coachable, open-minded salespeople, and train and evaluate them appropriately, they will reach high levels of unconscious competence. That is the end goal that I have in mind.” PB

 

For more information about video shopping as a training tool, contact info@newhomespecialist.comand mention "Professional Builder-Video Shops" in the subject line. Christie Redner can be contacted at christie@schaefferhomes.com.

 

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 Homes Salespeople" and "Smart Selling Technologies." He can be reached at bob@newhomespecialist.com.

 

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3/13/2014 New Home Sales: The Hawthorne Effect And Your Sales Management Possibilities

New Home Sales: The Hawthorne Effect And Your Sales Management Possibilities

NEW HOME SALES

Continually resetting expectations can turn a short-term gain into long-term performance.

Bob Schultz, Contributing Editor

March 13, 2014

Here is an easy-to-implement tactic with short-term benefits that also paves the way to introducing serious training or systems changes into your organization for long-term gain. It’s something that I stumbled upon many years ago when I discovered this interesting phenomenon: Sales would marginally increase after salespeople had been told that they would be mystery shopped. It never failed. This rise occurred whether or not any training had been conducted. Likewise, I noticed something else whenever I worked with a builder who had the last few inventory homes to sell. When we had a meeting with the salespeople to go over some ideas—even for only an hour or so—voila. Those homes that had been sitting for quite some time began to sell. 

When we engaged salespeople in role-playing exercises, it was not uncommon to see a little spike in sales shortly thereafter. As I continued to experience these out-of-the-ordinary occurrences, I mentioned them to a friend of mine who was very knowledgeable about industrial psychology. He said, “I think what you are describing is the Hawthorne effect.” 

 

I had heard of it but never quite knew what it was until I did some research. You may know that the Hawthorne effect is a term referring to the tendency of some people to work harder and perform better when they are participating in an experiment or series of activities in a group environment. Its origin is based on a Harvard study during the 1920s of workers at a Western Electric assembly line plant in the Chicago area called the Hawthorne Works. Once I understood the effect, I proactively used it when and where appropriate to produce a quick spike in sales, to create a smoother transition into a serious training program, or to introduce new processes and systems.

 

Let’s look at how you can harness the power of the Hawthorne effect. But first, a warning: The results of the Hawthorne effect have a very short shelf life. It will not have any lasting impact. Why? Because it’s not providing the necessary tools for someone to change behavior for the long term. However, the impact of the short uptick in performance can be used to establish a benchmark by marking improvement before and after the effect took place. Benchmarking the Hawthorne effect can then open doors by showing that with a more long-term program in place, more permanent and greater sales results will occur.

 

Back to the mystery shop reference. I suggested as a hypothetical that you could increase sales without spending any additional money or time. Simply announce that during a specific time period, all salespeople are scheduled to be mystery shopped. The first thing that happens is paranoia begins to set in. All of a sudden salespeople are thinking, “I better do my best.” In the higher learning matrix—first taught by Confucius—this reaction is called the level of conscious competence. Simply stated, this level means that when I have to do something, I probably can do it. However, the measure of excellence that results depends on whatever level of expertise is present at that time.

 

So what causes those additional sales? Whatever it is the person is now consciously trying to do, when they know they are being noticed or evaluated, they will more likely start doing what they should be doing all the time but are not. Consequently, some sales might be generated as a result of that “something they should be doing all the time,” but are not, solely because they are part of a group experience—aka the Hawthorne effect.

 

In a similar manner, opening minds to be accepting of training or other changes to the norm of operational procedures or policy can be jump-started by another version of this effect—a short duration of some structured training, in which fundamentals are reviewed and expectations going forward are previewed. As a result of this exercise alone, sales almost always increases measurably. When the people involved are asked why the additional sales occurred, they typically will respond with something that was covered or presented in the short program in which they were involved as part of a group, again, being aware they were to be evaluated, i.e., the Hawthorne effect.

 

Here’s a firsthand observation and report on this phenomenon from a very successful real estate broker, Walter Borgen of ReMax Agency in Daytona Beach, Florida, whose company represents builders and condominium developers. Walter notes the following:

 

“A classic example of the Hawthorne effect was a recent training session I hosted for my on-site sales teams in August of last year. Within the next 30 days of this intensive new-home sales training session, our sales team had its best sales month ever. With renewed expectations and goals, the sales agents were excited. They critiqued and revamped their presentations. They felt confident, made commitments of their coming successes, and knew that we expected results. However, as Bob cautions, this was only a temporary gain, as within in a few short months that record sales performance went back to what was the previous normal.”

 

One of the biggest challenges in managing an experienced sales team is that they possess the knowledge and the skills needed to produce the desired results. But they fall into routines and mindsets that often limit their performance. As sales managers and mentors, I believe it is imperative that we strategically follow a program to continually reset expectations to maintain peak performance. 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.

2/26/2014 Moneyball For Home Builders

Moneyball For Home Builders

NEW HOME SALES

Sales representatives need to have a passion for knowing the numbers that are critical for scoring closings.

Bob Schultz, Contributing Editor

February 26, 2014

In our next effort to present strategies that help builders increase revenue while reducing unnecessary costs in our 2014 series, ”Forge a Breakout Year For Sales,” we’ll look at a principle familiar to carpenters. The axiom is measure twice and cut once or, as the late business guru W. Edwards Deming stated, “You cannot manage or improve that which you do not measure.”

Just as owners of baseball teams need wins, builders need profitable sales. If you saw the movie or read the book “Moneyball,” maybe you recognize that although this story is set in baseball, it’s really about developing a passion for knowing and understanding how to use critical numbers and statistical probabilities that create wins, which then create championships and higher profits. In “Moneyball” it was number-cruncher Peter Brand, played by Jonah Hill, and not a baseball expert, who understood that a win is not a thing that just happens. It is the end result of consistently getting on base, and then scoring. 

 

In the business of new-home sales, a sale doesn’t just happen. True, a contract to buy and sell has been achieved, but a sale is really the end result of a series of well-defined and executed steps and tactics that can be measured and improved. As each step is improved, an increase in profitable sales is the result. For example, marketing and promotional spending must be measured for ROI (see “The Opportunity For a Breakout Year in Sales,” Professional Builder, January 2014, p. 29).

POP Benchmarks 

Now when we look at POP, or point of purchase activities, we want to see what happens when a prospective buyer comes in contact with a new-home sales representative. We also need to measure, benchmark, and improve critical steps of that process. Some of the essential and fundamental stats to examine for each salesperson, each community, and the company as a whole include the following:

 

• Conversion of traffic to sales by sources of traffic

• Percentage of traffic and sales generated by Realtors

• If sales are negotiated, what is the percentage of total sales where concessions were involved, and what was the dollar amount given away by each salesperson.

• Sales accomplished by visit, i.e., first, second, third, or beyond

• Cancellations

• Follow-through activities with prospects who have been in contact but have not purchased. We use a system called Customer In Process (CIP) Analysis and Action Plan.

Passion To Know 

I am always mystified when I ask a salesperson or sales manager, “How many sales do you have for the month?” and the response is something like “I’m not sure” or “I don’t know.” The fact that they don’t know is not as troublesome to me as is the issue that they don’t have a passion to know. Peter Brand demonstrated an unbridled passion to know who gets on base and who scores as his fundamental benchmarks. Then he motivated and involved Oakland A’s general manager Billy Beane, played by Brad Pitt, to the same level of passion. I encourage all sales managers and builders to develop a passion for knowing the important numbers critical to your sales operation. Understand what they mean and know how they will benefit you to increase sales revenue and profit.

 

In keeping with our format of presenting real-world experts, active salespeople, managers, and builders who each day are challenged and charged with the responsibility of generating a consistent level of profitable sales, I introduce Jay Webster, vice president of sales and marketing with Marrick Homes in Prince Frederick, Md.

The Marrick Method 

“We have made a practice that has become part of our culture to measure all of the benchmarks that are referenced,” Webster says. “The benefits to us are measurable. Both management and the sales team, collectively and individually, are tuned into the process that produces sales.

 

“Building on Professional Builder’s January article, ‘Debunking The Myths of Social Media and Internet Marketing,’ we focus on tracking each appointment that we have from our online and other marketing efforts. Our Prospect Process Tracking  (PPT) form is the primary tool our sales team uses to ensure that each prospect is given the attention needed at each step of the decision-making process of purchasing a home.”

 

Webster adds that the Marrick sales team meets weekly as a group to review and discuss these details:

 

• Contracts written month to date

• Number of closings month to date

• Review of top prospects for each community, which often leads to a Customer In Process (CIP) group discussion. The CIP review process is directly credited for generating approximately 10 percent of all 2013 sales.  

• Appointments scheduled or that need to be scheduled for the week with top prospects. This review also often leads to a group discussion on individual prospects that have visited more than one of our communities to create a specific strategy to get them back and buy. “As Bob says, ‘Selling is a contact sport,’” Webster notes.

• Contingent contracts are discussed with group input, which often leads to strategies that can be helpful in selling the contingent property.

• Community events that current homeowners and prospective homeowners are invited to attend. This interaction has proven to be an excellent tool to promote our company and community.

• Realtor outreach, including presentations at Realtor sales meetings and events for Realtors at our communities

•  Available inventory homes

• Current month sales goal per community and year-to-date sales per community

 

 “The PPT is updated during the week to reflect appointments that have been confirmed for the week,” Webster says. “Appointments are the key to turning prospects into sales. I manage and lead by objective, and our team constantly strives to improve that which we measure.”

Bonus Tips 

Remember that the goal is to measurably increase profitable sales and always ask this question: Doing what we are doing the way we are presently doing it, how many sales, how much revenue and profit are we missing, and how much time, money, and human resources are we wasting in the process? If you aren’t tracking activities critical to improving your sales process through each step of the system, you won’t really know if your efforts are resulting in increased sales. Having and properly utilizing CRM (Customer Relationship Management) software that is specific and custom to home builder operations is critical. To receive a complimentary outline of the CIP system, email: info@newhomespecialist.com and mention “ProBuilder and CIP.”

 

Jay Webster is vice president of sales and marketing for Marrick Homes in Prince Frederick, Md. Contact Jay at jwebster@marrickinc.com. 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 atbob@newhomespecialist.com.

1/10/2014 The Opportunity For A Breakout Year In Sales

The Opportunity For A Breakout Year In Sales

NEW HOME SALES

Debunking the myths of social media and Internet marketing

Bob Schultz, Contributing Editor

January 10, 2014

Warren Buffet often says the time to buy stocks is when everyone else is selling, thereby taking advantage of the vacuum left by those who fail to see the hidden opportunities to make a killing. That axiom is true for home builders as well. In the constant quest to increase sales revenue while reducing costs, it is easy to be seduced into complacency by good market conditions. I have seen it happen over and over again during the past four decades and through four significant economic downturns.

The ability to find opportunities others ignore comes from developing a mindset and a culture that foster a constant and intense focus on improving the fundamentals of your business. This competency comes from not allowing yourself to be seduced and distracted by anything offered as an easy panacea. These pitches include but are not limited to presentations that tout “the new rules,” “secrets for success,” or “the one thing you need to do.”

 

To help you stay on track for a breakout year, my 2014 articles will be serious about staying focused on the fundamentals by presenting strategies, processes, and systems that have proven to be timeless and effective in all market conditions. Select home builders, salespeople, sales and marketing managers, and Realtors—all currently and actively involved on a daily basis in producing profitable new-home sales—will co-author and explain the what and how, and the results that they achieve by implementing these break-ahead strategies.

 

Through analysis and examples, we will help insulate you against being distracted by “experts” whose biographies and track records demonstrate very little or no real-world, hands-on, practical industry experience in actually creating provable and profitable sales revenue.

 

We kick off 2014 by debunking the myths of social media and Internet marketing. Kristi McArthur Allen, sales director for Salt Lake City builder McArthur Homes, is our expert. Why? For openers, she is a highly experienced and successful new-home sales professional who developed, implemented, and measured a process to use the Internet and social media to make sales, not just friends. In addition to her responsibilities to lead, coach, motivate, and manage the entire sales operation, Kristi is in charge of all of McArthur Homes’ online marketing efforts, which currently account for more than half of its sales revenue. Proof positive that when something becomes personal, it becomes important.

 

Kristi says that it is very easy to get distracted by the glamour and fun of social media and the confusing messages from “experts” who declare that social media’s purpose is increasing brand awareness, keeping customers satisfied, and improving search-engine optimization. Their promised results are fantastic and extremely vague. Kristi offers the following:

Social Sales Media 

 

To be successful, we must be more specific about our goals. Stephen Covey, the author of “The Seven Habits of Highly Effective People,” said, “Begin with the end in mind.” What is our end goal as home builders? Is it to increase brand awareness? Is it making people feel warm and fuzzy about our company? Is it to be popular and have lots of friends and followers? Not in my world. Banks will not accept a list of followers and friends in lieu of money. It’s clear that banks are not social, warm, or fuzzy. Our goal must be to sell homes.

 

We began by assessing where we were and setting expectations as to where we had to be. In 2011, our online efforts produced 10 percent of all sales. Not acceptable. In 2013, that number jumped to 52 percent. As an on-site salesperson, I was taught that selling is a contact sport. Pretty simple. The more contacts I make with people who visit our website and provide me with contact information, the more appointments to visit one of our sales centers are confirmed. The more appointments that actually show up, the more sales we make. Extremely fundamental. Of the more than 800 online leads in 2013 that provided contact information, 39 percent kept an appointment to tour one of our model homes.

 

The following are my top-10 tips for debunking the social media myths and measurably increasing sales through your online efforts:

 

1. DO gain good fans and followers by asking prospects to like you when they visit the model home.

 

2. DON’T use marketing sites or gimmicky giveaways to gain thousands of insincere fans. Sure, you might gain a thousand new fans by spending a few hundred dollars, but now you have a thousand people following you just to get free stuff. These new fans may or may not be from or interested in the area where you build. They may or may not fit the profile of your target buyer, so don’t waste your time or money. People who foster these activities probably have never been responsible or accountable for generating a provable ROI. I was taught to always ask myself this question: Would I do this and spend the money if it were my own?

 

3. DO use homeowner involvement and offer well-planned contests for your homeowners, encouraging them to get their friends to like you. Friends and family of current homeowners make great prospects.

 

4. DON’T create contests or incentives that violate rules for the social-media platform you are using. Many builders fail to follow these guidelines and risk having their entire website shut down.

 

5. DO keep in mind that sharing online content from your company is good, but getting others to share that content is much more valuable. Our most successful campaigns include photos of buyers’ homes under construction. Who doesn’t love sharing photos of their beautiful new home?

 

6. DON’T post “Buy a home from XYZ Builders!” or “10 Percent Discount on Homes Today! Buy Now!” No one wants to read your sales pitches on a social media site. 

 

7. DO entice social media prospects to your website with good content. Catch their interest with a beautiful photo or an intriguing headline and then link to an article on your blog, to a neighborhood, or floor plan that you mentioned.

 

8. DON’T be shy about asking prospects for their contact information once they move from social-media sites to your website. We want to motivate, entice, encourage, or tactfully provoke when appropriate as many people as possible from our website to our model homes. Remember, selling is a contact sport. Capturing contact information is a crucial step in this process.

 

9. DO ask for contact information in several different places and on each page of your website. Besides the typical “Request Info” button, use calls-to-action such as “Find Out How Much Home You Can Afford.” Test different types of contact request forms to discover which ones are most effective in capturing lead information.

 

10. DON’T work hard at gaining new leads and then fail to follow up. Have a solid follow-up and sales system in place in order to convert as many prospects as possible to a sale.

Bonus Tips

 

Don’t forget that the goal of using social media and online marketing is to measurably increase sales. If you aren’t tracking your prospects through each step, you won’t know if your efforts are resulting in new sales. Using Google Analytics, an affordable customer-relationship management software, and a simple spreadsheet, you can track the following:

 

How many people visit your website?

Where they are coming from?

How many give you contact information?

What percentage of prospects was contacted in a timely manner?

How many resulted in appointments and which of those led to sales?

 

You’ll know which posts are moving prospects to your site and yielding the highest percentage of contact information. 

 

To read more about Kristi’s implementation process and receive an example of the tracking spreadsheet, contact bob@newhomespecialist.com. You also can see Kristi Allen discuss her online marketing tactics in “Secrets of the Internet Marketing All-Stars” at the 2014 International Builders’ Show, Feb. 4th in Las Vegas. Bob Schultz also will present a variety of ideas and tactics at three IBS programs. For a specific schedule go to www.newhomespecialist.com.

 

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.

12/20/2013 Goal Setting For 2014

As the end of the year draws closer, determine where you are in relation to the sales, financial, and customer satisfaction goals you set for 2013. If you are behind where you projected yourself to be, then assess and analyze to determine what you have to do to get back on track.

Bob Schultz, Contributing Editor



December 20, 2013

What did you accomplish in 2013?

A good way to plan for the new year is to ask yourself that question. Why? Because past performance is always a good indication of potential future success. So, look back before you move forward. Review your goals, activities, and performance benchmarks for 2013. Here are some items to consider as you make your assessment.

Carefully assemble the data needed for this review. As the end of the year draws closer, determine where you are in relation to the sales, financial, and customer satisfaction goals you set for 2013. If you are on track, great, and congratulations.

On the other hand, if you are behind where you projected yourself to be, then assess and analyze to determine what you have to do to get back on track. Next, think through all the actions, activities, and tactics you executed exceptionally well throughout this year. Determine why you performed those tasks so well and identify what you need to do to assure that you keep doing those tasks throughout 2013 and into 2014.

Likewise, review what you didn’t do as well and determine what you must immediately do to become more proficient in each and every one of those areas as you go forward.

Consider using 69 benchmarking segments—52 weekly, 12 monthly, four quarterly, and one annual—if you really want to drill down in the historic data. This rear-view mirror assessment will give you a sense of what you may need to do more systematically as you move forward. By keeping the focus and attention on shorter weekly segments, you’ll be able to achieve much more consistency and urgency in gathering information. Reviewing and assessing each of 12 months will allow more time to make quick adjustments as needed, and major reviews and corrections over four quarters will provide a much stronger possibility of achieving, or exceeding, annual goals and objectives in the future.

After you have assessed and determined what you did well and what needs to be improved, meet with the appropriate members of your team to create an action plan with time lines for implementation to achieve measurable improvement in the year ahead. Here’s an additional tool to help you assess what you accomplished in 2013: I presented a list of “25 Proven Ways to Increase Sales” in last month’s Professional Builder (see PB November 2013 or ProBuilder.com). Take that list, create a simple spreadsheet, and score each of the 25 items as you see it today on a scale of A to F.

A—Got it covered, do it all well and consistently. Identify why and how this has been accomplished. Action Plan: Maintain.

B—Somewhat covered and fairly consistent. Identify why and how this was accomplished. Action Plan: Improve where needed.

C—Varies as to levels of excellence and consistency. Identify why. Action Plan: Immediate improvement.

D—Not even close to a process or system to achieve success. Identify why not. Action Plan: Critical action needed immediately or concede defeat.

F—No clue where we are. Action Plan: Your call as to if you intend to try to stay in business.

A few more thoughts to consider:

• “When something becomes personal, it becomes important.” Builders want sales revenue and salespeople want financial compensation for their sales. For the most part, builders are responsible for nearly all (if not all) of the costs and expenses related to generating the leads and prospects to produce the sales. Pretty simple, straight forward, and personal.

• “You cannot manage and therefore improve that which you do not measure.” To increase the ROI on all sales-related costs and activities, builders, sales and marketing managers, and salespeople should have a passion for knowing and understanding the important metrics of their business.

• “In new home sales, if we only look at a sale as an objective rather than as the end result of a series of activities, actions, and expenses measured against acceptable levels of performance, then we really do not know where we are or what we accomplished.” Develop a vision for those possibilities.

Be sure that you have a system and process in place that consistently provides the costs, numbers, and ratios. Then you can more easily and accurately answer these questions: What did you accomplish in 2013? How did you do it? How many sales and how much revenue and profit did you achieve? How much time, money, and human resources were invested in the process? What was the ROI on the financial and human resources invested?

Using all this information as a frame of reference and creating an appropriate and formative action plan, I promise that you will be able to increase sales conversion ratios and begin to reduce unnecessary costs going into 2014.

But beyond these assessments and reviews, attitude is critical. Remember that success can often times be the biggest breeder of complacency. The recent upturn in many markets is starting to show some signs of that. Also know that no market ever remains great or bad forever. Always stay grounded in reality and be focused on the fundamentals, disciplines, measurable benchmarks, and accountability that are required for consistent optimum performance. Increase sales revenue and reduce unnecessary costs without sacrificing quality, integrity, and sound business practices. Do not allow yourself to get distracted by irrational exuberance or unfounded optimism.

Being a pragmatist with more than four decades of experience in our industry—enduring four major housing recessions along the way—I am convinced that history does repeat itself. With the continued upward pressure on all of your construction and land costs leading to price increases, and the strong potential of increasing interest rates over time, affordability will become a major issue. Also, there is always the omnipresent possibility of any national or global event that could quickly cause fear and pushback from potential buyers.

Then all of a sudden, just as the market did not that long ago, we could go from hot to not in an instant. Don’t plan on that to happen, for that outlook would be pessimistic and not appropriate; however, you should always be preparing for that possibility. Doing so is good judgment and very appropriate. A final thought: Where does good judgment come from? Experience. Where does experience come from? Bad judgment.

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11/15/2013 25 Proven Ways to Increase Sales

A comprehensive strategy for reviewing and improving your sales operation

Bob Schultz, Contributing Editor



November 15, 2013

If you look at what you are doing and the way you are presently doing it, how many sales and how much revenue do you think you are missing? How much are you misspending in the process, and what can you do to fix it?

To begin, it is imperative that you understand the differences between marketing and sales, and that you have a process to consistently manage and measure the objectives and results of each. For home builders, marketing takes two predominant forms. The first involves research, analysis, and interpretation of information to determine whether your product is well positioned in your marketplace. The second is to provide a reasonable projection of what your sales absorption should be expected to produce.

The following list offers 25 ways that your sales operation can benchmark, assess, and improve its processes. A single step, in and of itself, will not make a substantial difference as none of them is a silver bullet, the one thing, the big secret, or the newest strategy guaranteed to increase your sales. Review them all and evaluate your current standing against the entire list. Commit to an action plan for making improvements where they are needed, and you will begin to make a significant difference. The magic is in the mix. These steps are not easy. Embarking on this path will require focus and  an understanding of the value of these principles. Only then will you be able to motivate your team to take the action needed to create more sales success.

Measure 

1. Periodically conduct an independent competitive market study and positioning assessment of your company and its offerings.
2. Track monthly sales and closings in your competitive resale market areas and price ranges. Analyze trends, such as the number of closings, days on market, and who the selling agents are, on a quarterly basis.
3. Review and print the complete website of all competing home builders and check each one again monthly, noting any changes in offerings or the status of sales.
4. Send salespeople to personally visit and provide a competitive shop report of all competitive builders at least quarterly.
5. Conduct Realtor focus groups twice annually.
Another critical role of marketing is the creation, implementation, and measurement of resources used to draw homebuyers to interact with your sales people. This is especially important when using social media. Being liked is highly overrated if it does not lead to a measurable number of contacts, and then to sales. Measure the following; this data will let you know if the likes are producing sales:
6. Website visits against source, customer contact information provided on website, contacts made, appointments set, and sales converted.
7. Cost of traffic units by source.
8. Cost of sales by traffic source.
9. Conversion ratios by salesperson, by source.
10. Referral sales.

Mine Those Contacts 

Selling new homes is a contact sport. To maximize the number of contacts, take these recommendations to heart:

11. Be open for the convenience of the customer.
12. Be properly staffed, especially during peak traffic times.
13. Utilize assistants. One good new-home salesperson, working in conjunction with a well-trained, motivated assistant will outsell two salespeople in the same situation.
14. Hold a monthly drawing to acquire basic and accurate contact information from all visitors.
15. Have your sales team focus on follow-through and contact all prospects. Measure that activity and its results.

Sales Prep 

The point of purchase is where the rubber meets the road. Spending money and human resources just  to generate traffic is wasteful and simply gives your salespeople more chances to fail—unless your team has mastered the necessary skills. To improve your conversion ratios, follow these tips:

16. Use a targeted form of compensation where money is earned and escalate for achieving and exceeding levels of sales on a quarterly basis. The compensation should be calculated to be congruent with profit levels, and restarts each quarter. Do not use a fixed percentage of the sales price as your gauge.
17. All that the customer sees—signs, landscaping, models, sales office, amenities, selections center, and the like—must be show ready at all times.
18. Communication, demonstrating, closing, and negotiation skills must be highly developed through inculcation and become second nature when interacting with a customer.
19. Every sales representative that a customer encounters must be psychologically and emotionally ready to sell.
20.  Everyone must expect a sale to occur on the first visit, or if that doesn’t happen, a conditional sale; or if that is not going to happen, an appointment to meet again will be made; and if that doesn’t occur, an agreement for a call or contact; and if that doesn’t happen, it’s time to assess why not.

Sales Management 

You cannot manage and therefore improve what you do not measure. To create a high-performing sales team:

21. Learn to hire right, and when required, fire right. Do not hire for experience as far too frequently that experience is the greatest barrier to becoming extraordinary.
22. Train for the purpose of skill development and to provide a well-proven basis for change of behavior. Motivate to provoke the use of those skills, and don’t confuse the two.
23. Use simulated selling drills to increase sales competence to a high level of accountability performance. These drills, which salespeople know unfavorably as role playing, are not an option and should not be subject to popular opinion and consensus.
24. Mystery video shop and score against a high standard, view with your salespeople, and coach using the video shop at least twice annually.
25. Lead with a purpose. When placed in command, take charge.

Given the uptick in the market for many builders, the prospect of having a modicum of success can become the biggest breeder of complacency. Don’t let that happen. This list is just the tip of the iceberg, but it’s a good place to begin an assessment; consider converting it into your own self-evaluation tool. And please feel free to contact me with any questions or situations you would like to discuss.

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