New-home sales techniques: 12 action steps for 2012

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As the home-building market continues to heal entering the new year, I feel this is a great time for builders to create an action plan for boosting business results. Having recently completed our New Home Sales Boot Camp and Serious Sales, Marketing & Profit Management training programs in Boca Raton, Fla., what I have known to be true for many years was reinforced by the participants from all across the globe. Generating new-home sales revenue and reducing unnecessary costs are not all that complicated — when you have a clear and concise action plan and focus on diligent implementation. All too often, people make it much more difficult than it needs to be.

As part of their involvement in our training programs, each of the 100-plus participants — owners, CEOs, CFOs, and sales managers from as far away as Mumbai — created an individual action plan based on concepts, strategies, and tactics that were presented during the sessions. With the objective being to increase sales revenue while reducing unnecessary costs, here are 12 common action steps listed on their worksheets. You’ll notice that there is nothing new on this list. Fundamentals, applied at all levels of the organization, are needed to achieve increased market share.

1. Recruit with a specific purpose in all departments of your company. A company is the people it keeps. Hire based on enthusiasm, attitude, skill, and coach-ability, and consider hiring returning veterans — they have proven leadership skills and are professional, hungry, and driven.
2. If you’re green, make it work for you. It’s not easy, or cheap, building green homes. To sell green homes, you must both sell the emotion of green (e.g., healthier living) and demonstrate the monetary benefits. For example, if you can prove that one of your green homes will save 30 percent on the overall energy bills, that must be converted to buying power. If that 30 percent equals $60 per month, that is equal to the buying power of $12,000. Why? Because $60 per month would pay down approximately $12,000 of mortgage borrowing.
3. Demand franchise excellence. People take better care of items that they own. When a sales team takes ownership of the model center and sales offices and begins to function as if they had purchased a franchise to sell the builder’s homes, a different mindset takes place.
4. Measure and improve customer satisfaction. Referral sales are the least expensive sales that can be accomplished. It all starts with customer satisfaction, and that starts with knowing what your customers really think, not what you think they think. A series of congruent customer-satisfaction surveys conducted consistently over time is critical to understanding what your buyers think about your company and your home-buying experience. The perception of their experience is the basis for the creation of a proactive referral-generating program.
5. Utilize an effective CRM system. In new-home sales, the battle is won or lost in the trenches. The worst question a sales manager can ask a salesperson is, “How is your traffic?” The answer will always be, “It’s not enough.” The proper question is, “What are you doing with all the traffic that has been generated?” The answer to this cannot be provided or measured without an appropriate customer relationship management system, used daily with accountability.
6. Don’t give away the farm. It’s a nationwide epidemic. Buyers are walking in the door and asking builders, “What kind of deals do you have?” Bless their hearts, many salespeople who are not adept at building value, managing objections, and skillful negotiation — as I call it, “defending the builder” — simply give away the farm. Like the old adage, “We’re losing money on every sale, but we’re making it up in volume,” nothing good comes from heavy discounting.
7. Measure what you need to manage. Develop a passion for the important business-related numbers critical to your strategy. Read the book Moneyball and apply its principles to your business.
8. Inspect what you expect. Set the highest level of accountability for sales performance with consistency and accountability. The two most effective ways to do this are through simulated selling (i.e., role playing) and mystery video shops used as a coaching tool.
9. Aim for continual improvement. Refine all aspects of your sales operations by relentlessly measuring and improving each and every metric that matters.
10. Implement a congruent marketing effort. A key point here is recognizing that social media is just one part of an integrated marketing program. Do not let social networking become “socialized not working.”
11. Decrease unnecessary costs. Have a laser focus on reducing ineffective methods and eliminating unnecessary costs. Implementing targeted compensation will help you avoid overpaying for underperformance.
12. Focus on increasing sales revenue. This should include a strategy for creating more options and upgrades (i.e., luxury features) sales.

Using this 12-point checklist as a start, put together your action plan for 2012. The result will serve as the beginning of a transformation for your company.

Bob Schultz is president and CEO of Bob Schultz & The New Home Sales Specialists, a full-service management consulting and sales company 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 NAHB in 2010. He can be reached at bob@newhomespecialist.com [1]. For information, visit www.newhomespecialist.com [2] or call 561.368.1151.