Upgrade Your Online Selling

Byline:

By Blair Kuhnen, Contributing Editor

Publication Date:

Mon, 2005-01-31 18:00

Article Image:

Sidebars:
William Ryan Homes, Chicago, Ill.
David Weekley Homes, Houston, Texas
D.R. Horton, Dallas, Texas
John Laing Homes, Newport Beach, Calif.
Ryland Group, Calabasas, Calif.

How do you handle the sales leads generated by your Web site?

If you're like most builders, the answer is probably "not very well!" Such shortcomings are costing you business and hurting your bottom line.

According to the National Association of Realtors (NAR), there are now at least 606 million people online regularly. Together, they share information — equivalent to the entire content of the Library of Congress — more than 64,000 times every day. NAR also reports that in 2003, 71 percent of home buyers used the Internet to research their home purchases.

Builders working in this marketing medium find they are improving leads and sales to customers by several hundred percent — a staggering improvement that leaves builders both dumbfounded as well as delighted.

Three areas of focus seem to lead builders on the cutting edge to these extraordinary returns:

They make Internet technologies and their Web presence an integral part of an overall marketing strategy. The Web site becomes part of a larger marketing system, with processes and tools that glue all the elements together.
They constantly search for Web site best practices and execute quickly on those shown to drive higher response rates from consumers.
They have a systematic methodology in place—both people and processes—to deal with leads and follow up fast to convert them into prospects and buyers.

Make Your Marketing Systematic

Your Web site needs to be part of an overall marketing plan that may include radio, TV, direct mail, print advertising, outdoor advertising, public relations and promotional events. To generate higher sales velocities, lower marketing costs and build momentum in every community, you should integrate your Web site with all of these other activities.

Every ad, no matter where it appears, should prominently feature your Web site address. That site is the hub of your interactive marketing strategy. Use every means possible to drive traffic to it. In the same way, the Web site should reference and reinforce the other elements of your marketing campaigns. Ads that appear on billboards or in TV campaigns for specific communities should also appear on the Web site to link electronic traffic to that portion of the site featuring the advertised project.

Your Web site must be more than an online brochure rack of community information and house plans. If done properly, it will generate more, higher quality leads, than any other source. When your Web site is part of a larger marketing system, it will integrate upstream, to reinforce all your other advertising, and downstream, to make sales people in the model homes far more productive.

Upstream Impacts

Make sure all your external marketing encourages use of the Web site and funnels those prospects directly into an automated system for follow-up contacts. Does this mean every ad should be an ad for the Web site? No, but what it does mean is that every time you plan a campaign on your own or with your ad agency, consider how home shoppers can learn more when they are not yet ready to visit your site or pick up the phone. The Web site is a soft tickle for prospects not yet ready for the hook.

Your Web content should also cater to prospects from third party sites you may use for electronic advertising (such as www.homebuilder.com [1], www.newhomesource.com [2], www.americanhomeguides.com [3] and local media Web sites). In most markets, these third party sites generate awareness and leads at very favorable costs compared to print media.

Several savvy national builders, aggressively promote their Web sites in all offline media and provide external partners (such as www.NewHomeSource.com [4]) with a data feed of their Web content.

Reinforce your print and other advertising media buys (such as Web, TV and radio ads) by featuring them on your Web site. Consumers need to easily find the details of a promotion or featured community on the Web site. On a Web site, you have more space and time to deepen a buyer's interest than a 30-second TV ad can provide. Reinforcing offline promotions and advertising on your site will drive immediate improvement in leads generated.

Downstream Impacts

Downstream integration is where the rubber really meets the road — feeding leads into your automated systems for follow-up contacts. Many large, public builders have become masters at downstream integration. They generate leads on their Web sites or from third parties and have automated systems for importing these leads into sophisticated follow-up systems, and even further — into point of sale applications.

Even if you don't yet have a fully automated system for following up on leads, you can still put a process in place to handle Web-generated leads. Genesis Residential Group, a small suburban infill builder in the Tampa market, does this with just a Web site and an inexpensive follow-up tool. The firm still has manual handoffs, but it has a systematic approach for managing its database of leads to make sure every lead is treated well.

Design Your System For Results

When redesigning your Web site, consult the following practices to ensure extraordinary results:

Make your pages light in content. More than a third of Web site users still access the Internet through dial-up accounts. If your average page download is more than 75K, don't expect those dial-up users to stick around long. Test your pages on a dial-up modem — after clearing your memory cache — to make sure the user's experience will meet consumer expectations.
Make the site easy to use and test it to make sure users can accomplish their goals. Ask someone from your company to carry out these instructions: "You are relocating to this city from out of state. Go to our Web site, find a neighborhood and home you like, get directions, find the elementary and secondary schools, and ask for a brochure." Then, just observe. Where does the search get stuck? What's confusing? If you develop a new Web site, make sure this type of usability testing is part of your early design process. Don't wait until the site is complete to find out it's too hard to use.
Make it easy for users to ask questions and start a dialogue. Invite them to talk with an online sales counselor or on-site sales agent. If you have an online sales counselor, promote that fact on the Web site and offer that person's services to online home shoppers.
Use space on your Web site to leverage current promotions in other media. The clear calls to action will improve lead volume, and since you've already created the content, the marginal cost is near zero.
Add "coming soon" community subscriptions. People are drawn to anything that is "new" or "free." Allow home shoppers the opportunity to receive free information about new communities. Let Web site visitors sign up for a shot at the first release of lots, at advantageous pricing.
Allow users to customize their experience via e-brochures, "my favorites." By letting users interact with your Web site, by selecting what they want or saving their favorites, you provide a reason for them to return. When they do so, you can remind them about communities they might like to visit in person.

Each of these best practices is fairly inexpensive. For the price of one good ad in a major newspaper, a builder can have a first-class Web presence that sells 24 hours a day, seven days a week.

Fire Up Your Follow Up

The key to converting all of your Web leads into physical traffic in the models, is the combination of people, processes and tools that smooth the transition from browser to buyer.

Designate — or hire — a staff member to be responsible for handling incoming Web leads. Since sales people don't always rely on Web-generated leads, it is important to have someone handling Web-generated sales leads.

Having a sales force that does not utilize Web-generated leads often degenerates into slow and inadequate responses that do not meet online home shoppers expectations. Hiring a specialist in online lead generation, follow-up and selling can cure this problem.

The consequences of poor lead follow-up are profound. Each time a prospective buyer asks for help and the plea goes unanswered or is poorly answered, the builder's brand is damaged. It reduces trust and the effectiveness of all sales and marketing efforts.

Bad word of mouth spreads like wildfire, and that's what you're launching whenever you disappoint home shoppers online.

Builders often hire on-site sales people for their closing skills. However, the sales people sometimes lack good prospecting skills or any interest in dealing effectively with leads generated on the Internet.

Centex Homes has developed one of the most effective online sales counselor programs in the housing industry. In many of its strong markets, Centex is now able to generate more than a dozen sales each month directly from contacts initiated on its Web site.

Putting someone in charge of Web-leads makes good business sense. Whether you plan to hire someone, or search from within, the person in this position should have the following traits:

A self-starter. Someone who can work with little supervision and without the exact mix of tools and technology he or she may regard as ideal. The person should be a problem-solver and able to come up with solutions to unique challenges. Some might describe this personality as a squeaky wheel. But these individuals see themselves as business owners.
A salesperson. To do this job effectively, you need sales skills and the motivation level good salespeople possess. But this is service-based selling. Think of an online sales counselor as a concierge. The person needs good writing skills, and a pleasing telephone personality. But first and foremost, this is a salesperson.
Extensive product knowledge. The person must fully understand the product — both house plans and communities — to be effective. After spending a good deal of training time in the communities and talking with on-site salespeople, the online sales counselor can talk with prospects about communities and individual house plans. That helps add value to the home shopping process.
Solid computer and Web skills. This person has to juggle a lot of interactive balls at once. The ability to cut, paste, manipulate and insert links here and there has to be strong.

Methods & Tools To Get It Done

After you have the right person in place, you need a method for processing all those leads your Web site will generate.

Start with a close look at your processes and tasks to help determine your needs. Look at the work now being done and what you can hope to migrate toward. If your organization and the lead volume you are now generating from your Web site are relatively small, you may be effective with less sophisticated systems than the largest builders require.

To determine the right tools for your company, ask these questions:

Will you advertise in builder portals? If so, you need the ability to send data electronically and receive leads in a data format.
Do you have a number of communities and generate many leads? Then perhaps you need a system that will automatically individualize message campaigns.
Do you want different messages going out to leads versus those that go to people who visit the models and those who actually buy homes? Then your system will have to be integrated with online activity.
Do you have a system for generating contracts and production schedules? If so, your system for handling online leads may need to feed that system.

The bottom line is that you need to put tools in place to support your methodology, or what you will generate will be chaos, not sales. When you shop for these tools, boil your needs down to a few simple requirements, and then ask the prospective vendors to show you how their systems will work to accomplish these specific requirements.

Author Information

Blair Kuhnen is a partner and marketing system developer for Realty InfoLinks in Dallas, Texas. He can be reached at 972-661-1975 or via e-mail at blair@realtyinfolinks.com [5].

William Ryan Homes, Chicago, Ill.

Pete Balistreri, vice president of marketing for Chicago-based Giant William Ryan Homes, is serious about speeding up responses to Internet sales leads. To get as close to instantaneous as possible, he's equipped his Internet sales reps with hand-helds.

"We've tied our system to Blackberries," he says, "so when someone on the Web site sends us an e-mail asking for more information, it's automatically sent to the Internet sales rep in that area. She e-mails back, 'I've got your e-mail. I'll get back to you within a couple of hours with the information you need.' We want an almost instantaneous personal response.

"All builders have automated responses, but it's our belief that the person who gets to that prospect first has the best chance of getting the sale," Balistreri contends. "What impresses people most is response time. They really pay attention to it. The whole country is tied to e-mail, but people don't stay online forever. If you can get back to them while they are still online, you've got a real advantage."

Ryan delivers the obligatory canned response like everyone else, but within two minutes the prospect is in touch with a real, live person. "We tell our on-site sales people that if an Internet lead comes in, you have to sell that person differently. They are much more qualified than someone who comes to us off a billboard or a newspaper ad. They've already shopped our competition and narrowed down their search. They're often able to tell us which house they're interested in. Our plans are on the Web site, so they may even tell us which lot they want.

"Quite often, they've jumped in the car and sneaked out to the site to look at the lots without ever coming into the sales office," Balistreri marvels. "When you have a lead that's so close to a buying decision, and your sales people have never even met the people face to face, it's a little scary. You certainly want to handle them with kid gloves."

Balistreri believes most builders' Web sites are way too short on hard information. "A lot of them don't have prices on there," he says. "Some don't even have floor plans. The further you take the customer online, the easier the sale becomes. People go to the Web looking for information. If you don't give it to them, it just ticks them off and you end up being the first one eliminated. That's ironic, because when you ask builders why they don't provide more information on the Web, they often say it's because they fear prospects are using that information to eliminate contenders.

"We believe you've got to give them the information they want, but also excite them with interactive floor plans and some great graphics that almost force them to come out and see what you've got in person," Balistreri says.

He predicts the next trend will be to deepen follow-up right on the Web site. "Right now, all the focus is on converting information inquiries into prospects and getting people to emerge from cyber-space to visit the model homes. But how do you manage those leads after they visit the models? I think you'll soon see builders learning how to manage those leads right on the Web site. It makes no sense to turn them over completely to an on-site sales rep when you already have an open pipeline of communication on the Web site."

In 2004, Ryan sold more than 800 houses in four states (Illinois, Wisconsin, Texas and Florida), and Balistreri credits Internet sales as a driving force behind that growth. "We look at both Realtor and Internet sales as incremental," Balistreri says. But he makes it clear which is more important to him. "We like to run coupons on our Web site that say they are for our Internet customers only—click here, print out the coupon, and bring it to our sales office to get something free if you buy — maybe a washer and dryer. But the coupons specifically state that you don't get the benefit if you come in with a Realtor."

While the largest builders seem to be leading the charge toward better Web sites, on the strength of the investment dollars they can throw into research and development, Balistreri believes smaller, private companies may have a hidden advantage.

"Beyond a certain point, you can't tell how big — or capable — a builder is by looking at the Web sites," he says.

David Weekley Homes, Houston, Texas

David Weekley disdains dictatorial management; however, when he saw his company fumbling sales leads generated by the corporate Web site, Weekley made a change. The change — that has taken place over the last two years — has propelled the Houston-based GIANT to the forefront of Internet selling.

"Our Internet leads were handled — when they came into the company — with distribution to the city where the lead was directed," Weekley recalls today. "If it was for a particular community, it went there. If it was a random inquiry, it went to the marketing department. I saw that our response times were slow. Sometimes we didn't respond at all.

"Internet selling was not the primary function of anyone. It was kind of an afterthought. On-site sales people thought people walking in the door were much better leads than those coming from the Internet. But to me, it was obvious that these people had gone through some kind of search, and they selected us. They asked for more information on David Weekley Homes. We just had to do a better job of handling those requests," he says.

Weekley created a new position — he calls them Internet Neighborhood Advisors — in each division or local area, to specialize in handling Internet leads. Today, many other builders are following his example by hiring similar specialists.

"This is not handled from headquarters," Weekley cautions. "We have one or two people per division, and they are all part of the local management structure. Our challenge was to sell our local managers that this is a good idea. So we piloted it in one area, and learned how to do it. We had some success and then rolled it out to the other divisions. We learned that these individuals need a very special set of skills. It's different from face-to-face selling. It's a job that requires good computer skills, but not necessarily to a high-tech level. It requires high administrative talent. A very organized person."

When Web visitors ask for information on a Weekley community, the request generates an automated response, thanking them for their interest. "We now follow that up with a personal e-mail within an hour," Weekley says. "By that time, the lead has been assigned. The goal is to engage the prospect in an online dialogue, then move that contact from the computer to the telephone. Eventually, we want to get a visit to a community."

Each of the Internet Neighborhood Advisors has his own methods for deepening an online dialogue. "We're getting the Internet Neighborhood Advisors together on a quarterly basis to trade best practices," Weekley reveals. "There's no 'book' yet on how to do this."

The Internet Neighborhood Advisors are compensated on the basis of how many sales they initiate. One of the things that seems to be important is getting the prospect to the 'right' community — the best match, which is much more than just the one they can afford. "When we get to voice communication, the Internet Neighborhood Advisors often move the prospect toward a different community from the one they initially inquired about," Weekley says. "The closing rate goes up by two or three times when we find their real hot button and get them to just the right neighborhood. That's why we call the position Internet Neighborhood Advisor.

"The best Internet Neighborhood Advisors are initiating as many as nine sales a month."

Once they get the prospect to the right community, the Internet Neighborhood Advisors hand those prospects to an on-site sales agent, but even then, they don't let go completely. "They follow up with a phone call to see how it went," Weekley says. "Did this turn out to be the right place? If not, we don't lose them. The job is something like that of a Realtor. We try to get them into one of our houses somewhere. After all, they chose us on the Internet, so we have something they like. The question is, where?"

The firm measures "dialogue conversion rates" of the Internet Neighborhood Advisors, as well as sales conversion rates. Both have been going up dramatically as the Internet Neighborhood Advisors trade best practices. The dialogue conversion rate across the firm was 17 percent in 2004, and the sales conversion rate for Internet leads hit 6 percent. Austin was the leading division, with a sales conversion rate of 12 percent for 2004.

But in December, the whole company hit a sales conversion rate of 8 percent, and San Antonio and Tampa divisions both outpaced Austin by converting 18 percent of Internet sales leads to Austin's 14 percent.

Weekley has a lead over many builders in understanding the potential of the Internet to dramatically improve sales, but even the Texas GIANT may be just scraping the surface of what can be achieved.

D.R. Horton, Dallas, Texas

Rick Horton heads the Dallas branch of No.1 builder D.R. Horton, a massive division that closed more than 4,400 homes in 2004. A cynic by nature, Rick is now a believer in the power of the Web. He can prove his new Web site is already boosting sales by 6 percent, and promises to hit 10 percent by March.

He'll need that proof to keep his cousin, chairman Don Horton, from blanching at a bill for more than $500,000 for Web site upgrades to bring the Dallas/Fort Worth operation to a new level of efficiency in generating and converting sales leads.

"We spent more money on Web upgrades than we spent three years ago on our entire marketing budget," Rick says. "But we can measure the results. We tested it on a small townhouse community in a great location in Dallas. In October, we put up a sign asking people to visit our Web site for more information on the project. The first phase was 30 lots. We sold them all on the Internet. Our prices automatically changed after every six sales. Then we shut down sales because we don't want sell out too far in front of construction. D.R. called and told me to get out there and cut down that sign!"

"In Las Vegas, California and Florida, we're used to that stuff, but I'm in Dallas, Texas," Horton says with a laugh. "How many times do you think I've heard, 'Let's not sell it too fast'?"

I don't ever want to say we were able to cut sales staff, but our bust-out rate on those first 30 sales was zero. All of the buyers pre-qualified through our mortgage company. Our realtor participation rate in Dallas is 70 percent. We didn't have one realtor coop there," Horton says. "We thought if we sold five units it would be worthwhile, now the question is whether we can sell out the entire community without building models.

"We've gone from an average of 12 leads a month from our Web site to 1,800 a month. The upgrade has increased our Web traffic by a number I won't give you, but it's already increased our sales by 6 percent," Rick marvels.

So, exactly what changed?

"Our old Web site just said, 'Call this number or go visit our models,'" Horton jests. "If you go to drhorton.com [6] now and go into our Dallas site, you'll see the difference today. You'll see renderings and floor plans. Very soon, you'll see photos of all our inventory houses. Click on a community like Savannah in Denton County and you can get a video tour with people talking about what it's like to live there.

"We monitor everybody in and out of every portion of our site. We pay close attention to what people are doing right before they print a brochure and ask for information," Horton says.

When people request information, they get an automated response in two minutes or less. "We ask for all their contact information," says Horton, "but we'll take whatever they are willing to give us. The sales people in the community write the auto response. Within 24 hours, someone in every community you ask to hear from will respond personally."

Horton has two full-time, salaried people who do nothing but deal with Internet leads and track follow-up on those leads. "If you're in Phoenix, we're going to ask you to call us collect so our sales people can talk to you," Horton reveals. "Our sales people will e-mail you and ask you to call. Then we try to get you to visit."

If prospects make it to 31 days without signing a contract, they get another barrage of communications about community specials. "Maybe a washer and dryer," says Horton, "or a refrigerator, or extra landscaping or a garage-door opener.

"We're tracking the mortgage side of our operation closely as well. We have 40 loans in process on the Internet for people who have yet to select a house or sign a contract. We're tracking everything people do on our site, and using that information to constantly improve the capability we offer. Within a month, you'll be able to view every lot we have available, sold or with a contract pending.

To boost the buy-in of on-site sales people, Horton pays a slightly higher commission on sales that come through the Internet. Reduced Realtor participation makes that feasible. That carrot means it's unlikely anyone will ignore an Internet lead. The stick is the control and monitoring capability Rick Horton has over follow-up

"Think about this from the sales agent's perspective," says Horton. "People are walking in with the brochure they've printed out in their hands, along with a plat map, and asking if lot 10 is still available. It's an easier sale, and they get paid more for closing it. Life is good for our sales people."

John Laing Homes, Newport Beach, Calif.

If you want to open your organization's eyes about the importance of a Web sales capability and the damage bad handling of electronic information inquiries can do to your brand, try mystery shopping on the Internet just as you would your on-site sales people.

So says Bill Probert, executive vice president of sales and marketing for Southern California-based GIANT (and PB's 2004 Builder of the Year) John Laing Homes. "We're having mystery shoppers contact us on the Internet to see how long it takes us to follow up," he says. "And we're tracking our response rate on requests for information. It's only now that we've got a way to measure it that we know how many people used to get a bad first impression of John Laing Homes. It certainly wasn't the kind of impression we want, in a company that prides itself on customer satisfaction.

"In a hot market like Southern California, where you're getting 100 traffic units a month through the models, it's easy for on-site sales people to let future prospects slide. And that's what your Web site provides — a pipeline of future prospects. That's why having an online sales specialist handle all those Web-generated inquiries makes a ton of sense," Probert reasons. "We know how important word of mouth is. Think about what people are saying about you if you ignore their online inquiry!"

Laing now has sales system administrators in half its divisions, and the improvement in bottom line results is startling, Probert says. "Our Colorado division probably sets the benchmark in our company. That market is not hot. They need those Web sales leads more than the California divisions do and it shows."

Laing used to direct Web-generated sales leads directly to sales managers and new home counselors in the developments for which information was requested. It was up to them to put the lead into the firm's automated follow-up system. "The only way we could track a lead was to look at the e-mail responses or ask the sales person if it was put into the system," Probert says. "Now, when we get an Internet lead, it's tied directly into our sales software, so it's automatically into the follow-up system. Our goal is to turn those leads into prospects, which doesn't happen in our parlance until someone physically walks into a sales office."

The firm separates leads into two categories. "If the request for information is for a community that is already open, our system dictates that we call within 24 hours. If the sales agent does not call within that allotted time, it shows up as a failed activity, and the sales manager sees it on a weekly report. Our metric is, how many of those leads were you able to get in for a visit?

"We're still trying to figure out what a good percentage is," Probert says.

If the community is not yet open, Laing's marketers are trying to build leads for a sales staff that may not be in place for several months. "We still have people who are supposed to respond within 24 hours," Probert reports. "We call and tell them the timetable until grand opening, and ask how they'd like us to communicate with them—e-mail, snail mail, or what. They'll get something from us every two to three weeks until we move inside six months until opening. Then it's every week."

Will all Laing's divisions eventually have the sales system administrator position, to manage Internet inquiries directly?

It's totally up to them, Probert says, without hiding his hope that they will. "It's my job to provide the systems to make it work, then convince the management teams it's something they should do. It's not just the Internet. We have calls into our information phone lines for new projects that pile up until the sales staff is in place, two months before grand opening. It's important for those people to have someone to talk to, someone to put together a waiting list.

"The managers in some of our divisions weren't paying attention to this. I told them, 'It's not a question of whether or not you need these leads. It's what ignoring them will do to our brand that matters.' One manager said to me, 'But our customer satisfaction scores are great for our customers.' I said, 'What about all those people who no longer want to be your customers?'"

Ryland Group, Calabasas, Calif.

Eric Elder, Ryland's vice president of marketing and communications, has come up with one of the boldest innovations in builder cyberspace. Like many others, Ryland has Internet sales specialists in each division of its operations, fielding Web inquiries and probing to establish personal contact. But some of Elder's reps take the relationship with prospects further than anyone else — all the way to closing the sale.

"We have different varieties of Internet sales specialists," Elder says, "because our markets vary in their level of Internet savvy. In all markets, we have someone responsible for intercepting Web leads before they go to a standard sales office, but in some of them, like Denver and Phoenix for example, we have people who fully manage their leads all the way to a sales agreement."

Ryland calls these specialists "personal home managers." Their modus operandi is to take the relationship established online all the way to meeting the prospects in person, and physically touring them around to the firm's various communities that seem likely to strike a hot button. This is the closest any builder Internet rep has yet come, in our knowledge, to duplicating the relationship of a Realtor to a prospect. "Not everyone on the Internet will want this level of personal service," Elder says, "But we don't want to say 'no' on the Internet. So if a relo prospect is flying into Phoenix from Chicago, and wants someone to meet him at the airport and drive him to the communities he found interesting on our Web site, we have a specialist to do that.

"Even if the personal home manager only meets one person a day, the conversion rate is so high, he may sell two homes a week," Elder notes. "A typical community in our company sells 50 to 75 homes a year, so adding a personal home manager to a market can be like adding a whole community (one with very low overhead)."

Elder's goal is to give every Web visitor the exact level of service desired. "It's been my prediction for years that the housing industry will eventually break into myriad kinds of sales reps," he says. "Now we're seeing it. The on-site sales rep is just one option available to provide what the customer wants—from self-serve to full service.

"We have sold people houses right on the Internet, sight unseen," Elder says, "but it doesn't happen often — and other than the case of a relocation in a time crunch, we wouldn't want to do it. After all, it's real estate. You really need to walk the site at least once."

Ryland is building more interactive capability into its Web site with every passing day, and Elder sees enormous rewards in market and consumer research flowing from that interactivity. "We can almost read people's minds," he says.

"We see them making choices. Should there be a kitchen island or a wet bar? What kind of mortgage loan option is best? We see the gap between what they want and what they can afford. Knowing they have to move from a fixed-rate to an adjustable mortgage in order to qualify for the home they really want helps sales people prepare to take their prospects through that decision process.

"The other thing the Internet gives us on the market research side is the ability to do instant small surveys," Elder says. "In the old days, we had to do exit surveys or focus groups to get this kind of feedback from shoppers. Now it's easy to post a five-question survey on the Web site and get hundreds of responses in a matter of hours."