Lets Set the Record Straight

February 6th, 2008 by Tom Richey · 313 views · No Comments Print This Post

There’s a great deal of false information floating through the new home sales and marketing arena, so it’s time to set the record straight. As we prepare for the new century, it is time to purge these erroneous ideas from our mind and fashion a selling philosophy that’s on target. Following are 12 absolutely false beliefs that will derail the soundest of marketing plans. I call them the “Dirty Dozen.”

THE OLD CRITICAL PATH IS STILL IN
To turn a phrase, the critical path is in but it’s not so critical! Here’s why. The old critical path was a mandated selling progression that ran critically through a seven step process — Prospecting … Approach … Qualifying … Demonstration … Objections Handling … Closing … and Service. Salespersons were trained not to deviate from the path and if they did, they got gigged! The path was focused on a canned presentation oriented to the Salesperson’s agenda. Today that path is an expanded counselling course driven by the buyers’ agenda. In a word, today we are smelling not telling. The smelling represents the fine art of Discovery which is at least 50% of the new home counselling process.
FEATURE DUMPING IS OK!
Some trainers teach engagement at the front door with 5 minutes of feature dumping monologue. If anything, that process should be reversed by counselling with 5 minutes or more of Bonding, Connecting, and Discovery. Today, buyers don’t want to be sold they want to buy. They crave leadership that Counsells them into a proper decision. And they will reward the salesperson that asks the appropriate questions, listens to the feedback, and structures the counselling course that personalizes the purchase.
TOUCHY-FEELY SELLING IS IN!
Not on your life! Being too touchy-feely and socializing with prospects is cited by mystery shopping firms as the industry’s greatest occupational hazard short of not closing. Sure we’re in the world of relationship selling, but not to the point of avoiding the close. The old adage … “There’s no tomorrow if the prospect meets a closer on the way home” applies to the feel good sales counselor who fears rejection. Waiting for the buyer to close is sales suicide! Create the 1-of-A-Kind and then step up and ask for the sale!
THERE’S NOTHING NEW!
Whoa Nelly! Where in the world did the pundits get that idea. There’s been more change in new home selling in the last three years than all the other 39 put together relative to my 42 years experience in the business. Why? Different buyer, more competition, changing cultures, custom product, and technology. One example: In California last year, 40% of all home buyers surfed the WEB seriously before purchasing. They entered sales offices often with a pretty good idea of what they wanted. We had better train our salespeople to discover where the buyer is in their information gathering before they launch a presentation. To do otherwise is espousing the Ready … Fire … Aim mentality.
CLOSING IS OLD HAT!
Let’s hope your competition believes that. The idea that anyone who teaches or executes focused closing is a dinosaur couldn’t be further from the truth. Fact: NAHB surveys that 60% of the salespersons never ask for the sale. Fact: Recent research shows buyers are fed up with salespersons who can’t or won’t close! Fact: The American Management Association says in the sale of big ticket items, 80% of all sales are made after the 5th close. In an editorial, Sales and Marketing Management magazine suggests that selling in the US has gone soft on closing. They say … “It’s time to take out the old closing processes that were so successful … dust them off … tweak them to the new buyer … and start using them again in earnest.” Case Closed!
IT’S NOT MY JOB TO PROSPECT!
It is the responsibility of any salesperson to make the sales the firm requires. If it takes self generation of prospects, so be it. The rule is — “Never let a week go by without registering 10 new prospects.” If the market or advertising can drive just 5 to the door, you make up the difference. The triple threat sales counsellor works to this code:
1. Self generate your own prospects.
2. Counsell and close what comes on site.
3. Work to a referral ethic.
I know one sales counsellor who earns an additional $100,000 per year through self prospecting. How? By cultivating Realtors, working Referrals, and exercising Radiation.
NEGOTIATING IS THE WAY YOU SELL HOMES!
Not in my book! The hallmark of a true professional is how much profit they generate for the company. Many firms are rating their sales personnel on individual profit effectiveness. It is critical to know how to neutralize the negotiator.
1. Say …“Your request for the discount tells me you’d like to own this home.”
2. “Are you aware that when appraisers discover random discounting in a community, they appraise the value of the homes at the lower level of the price reductions?”
3. “Wouldn’t you rather buy from a builder who protects your sacred equity?”
And in your negotiation strategies, remember to hold any add-to-value until the very end of the transaction. Wrap up the sale and close the door. There’s no more negotiation. And cement the sale with a review of the benefits. They must feel signed, sealed, and dealivered!
DEMONSTRATION IS HAWKING THE BUYER
Let’s define demonstration: It’s where “a highly trained and motivated sales counsellor gets next to a curious home seeking family and through involvement causes values to be perceived that would not be seen on a self tour.” Demonstration allows the buyer to see the home in another dimension, primarily in three areas, style and design, value-added components, and exclusive building points. Hawking only happens if the salesperson demonstrates to their own interests, not the interests of the buyer. If demonstration begets value, and value fuels sales, I believe I’d do more demonstration!
THERE’S LITTLE OR NO URGENCY!
How so? In new home sales, unlike many other sales industries, we’re blessed with urgency. It’s all around us! Any sales counsellor who complains of no urgency misses the point: Urgency is the fuel that propels buyers into a contract, so it’s imperative to harness every drop of urgency energy and wrap it into your presentation. To wit: Rising interest rates fuel urgency. So do rising land, lumber, and labor costs. Fear of loss abounds if you correctly demonstrate to a 1-of-A-Kind. Timing can trigger the close. For example, “Wouldn’t it be memorable to be in your new home by Christmas?” Lifestyle foments urgency. “We can have you moved in just in time for summer vacation so this year you can holiday at home.” The savvy salesperson conceives urgency by relating a property benefit to a buyer’s desire. “This last homesite at the end of the cul-de-sac is safer for kids. Should your toddler wander onto the street, there’s no through traffic. Kind of like an insurance policy, wouldn’t you agree?” Remember that urgency is reflected in your walk; your talk; your eye contact; your voice inflection; your pacing; your total demeanor. Urgency is the key to closing the often contrary buyer!
PEOPLE DON’T WANT TO BE CALLED BY A SALESPERSON
To the contrary, research shows that smart shoppers respond favorably to a follow-up phone call if there is a reason for the call relative to the home purchase. Just calling with a … “How are you coming with your house hunting,” will shut you down, while calling with … “The reason for my call is I have special information for you about the school system” will single you out as a responsive, responsible housing consultant (And consulting is in!). Remember the 5 Rules of Follow-up:
1. Have a reason for the call.
2. Call the most sold spouse.
3. Call with 1-of-A-Kind info.
4. Set in urgency.
5. Close for the appointment.
BUYERS DON’T WANT TO REFER
That’s nonsense! I know many salespersons whose personal referral sales exceed 50%! Buyers will refer if you set the proper expectations. Tell it like it is, and service them professionally. We don’t get referral sales because we don’t ask. Plain and simple! To provide the posture for asking, set up a 7 points of contact program. At each contact, ask the magic seven words … “By the way, who do you know?” Example: contact 1. Signing of contract. 2. Loan approval. 3. Color selections. 4. Pre-construction meeting. 5. Pre-move-in orientation. 6. Post sale questionnaire. 7. 12 month anniversary. Resolve to go 1 4 1 … that means, “I will write one referral sale for every one new home I sell the rest of my career.” If you reach for the stars, you won’t come up with a handful of mud!
SALES MANAGEMENT IS EXCESS BAGGAGE
In the home building enterprise, there’s nothing to build until someone sells something! Sales management is the fulcrum function that sets staffing parameters … recruits and selects personnel … trains … motivates … and coaches and monitors the staff to peak performance. Since the majority of salespeople do not function without structure and coaching, what happens if you eliminate sales management? You lose business to the competition and may go out of it. Those who endorse eliminating sales management forget that the AMA has found that only 3% of the U.S. workforce can or will work in an unstructured, unsupervised environment. The other 97% must be kicked, cajoled, and supervised to do their jobs. Secondly, good markets create bad selling. I wouldn’t want to enter a downturn with unseasoned sales management. Third, professional sales management keeps the team tuned to a cutting edge pitch which results in the incremental sales essential to profits today. To put the case for sales management another way, would you sleep well at night if your competitor hired a world class sales manager who began making hiring overtures to your star performers? Not well, I suspect.