Builders Getting Back to Work

The sky is falling! Well not really, but the market in California has weakened. While I was at PCBC at the beginning of June, I heard about inventory building up in the Inland Empire. However, my pre-conference workshop attendees still seemed very bullish. Times are changing. No longer a strong seller's market, it's time for some builders to get back to work. "I don't believe there is anyone bullish, there's not one." said Roger Anderson of Anderson Marketing.

I asked Roger what he was seeing. He felt that the market had clearly turned earlier this Summer. "Traffic counts are 50% of what they were." He saw 3 factors influencing the downward trend:

1. Interest lists have diminished tremendously - "When they release 5 or 6 homes they are selling 1 or 2 instead of selling them all. That's the big change from four months ago."
2. Pricing is way up - Prices that were in the $250K's are now over $500K. So, many consumers need to sell their existing home before they can buy. With existing home sales slowing, new home sales are turning as well.
3. Investor sales are down - This summer many of the builders decided to discontinue sales to investors. In some cases this was 35% of the market.

So, if this hits your market, what are you going to do? Start with your follow-up process and sales training. By fine tuning your follow-up program now, you will be prepared to weather the storm. I asked Bill Probert, EVP John Laing Homes, how he had prepared. "I've been preparing for this for seven years." The key is to have a process in place to follow-up on leads, prospects who have visited, and buyers who may be able to generate referrals for your business. "Those with a good process will still be able to generate a reasonable profit in a down market." said Anderson.

Laing has a sophisticated process and systems to support their process. One new part of their process is their "Lost Looker" program. "The Lost Looker is a part of a prospect follow up system that we are using. Home counselors are required to identify 'A' prospects and follow up. We measure the conversion rate and then talk to prospects who become lost." said Probert.

Unfortunately, programs like Laing's are not created overnight. So what can you do to kick start your follow-up program? Start by asking yourself how you would want to be treated from the time you asked for information until you decided to visit on-site. Dedicated follow-up is the key. Then carry this through for your prospects that have already been on-site.

This will prepare you for the future, but you still have to salvage what you can from your old process or lack of follow-up. Those old leads and prospects may still be of value. What can you do?

A Simple but Effective Prescription

1. Gather all your registration cards, internet leads, and phone leads from the past three months. Get all of these into a database with names, email, address, and phone numbers.
2. Plan a new event tied to your next release or grand opening. This can be a simple event. Let's say you have a family-friendly first move up community. Plan a simple event with food and activities for the kids. It has to be interesting enough that those in your database who are still looking will be inclined to respond.
3. Kick off your blitz at the next sales meeting. Ask your sales counselor to call every non-buyer from that past three months and invite them to the event. Don't worry about it being an event not at their community. Provide prizes and recognition for each RSVP and attendee driven by your sales team. Also explain that this is an opportunity not only to invite their old prospects to an event, but an opportunity to ask if folks are in still in the market and inviting them to their community.
4. Send out a series of emails perhaps 14 days, 5 days, and 1 day before the event. Offer an RSVP link in the email.
5. Don't use automation to replace your personal touch. Call leads who respond to the invitation and all your on-site prospects. The personal call can be a voicemail and still be effective. Think about the messages your doctor or dentist leaves you the day before your appointment.
6. Make sure every responder is personally called with an enthusiastic reminder the day before the event.

Will this work for you? Not only might it work, but you might find a great morale benefit among your on-site sales counselors. Let me know how it goes. bgk

FloorPop is published on the first Wednesday of each month. We welcome your comments, thoughts, and questions. Please write or call anytime. kuhnen@earthlink.net.

Blair Kuhnen is the publisher of FloorPop and can be reached at 817-658-7698 or via email at kuhnen@earthlink.net. Roger Anderson owns Anderson Associates, a full-service marketing company focused on California's Inland Empire. He can be reached at andersonmarketing@adelphia.net