Is Training an Expense or an Investment?

A six-point case study shows how LGI Homes has increased sales despite the current housing market.

February 26, 2009

Hartford, CT - February 23, 2009 - Some businesses look at training as an expense, instead of looking at the long-term return. Why does one company seem to have all the success and others just seem to plug along? You may have more control about your success than you think. Your company does not exist without customers and more importantly your long-term success increases when you have customers that keep coming back.
Let's simplify the thought process as well as use a case study. The case study in this article is based on LGI Homes in TX. Despite the current housing market, LGI Homes has had their third consecutive year of increased sales. In 2004, 2006 & 2007, LGI Homes was listed by Builder Magazine as one of the top 200 builders in the country. According to industry reports, they were only one of nine builders in the top 200, to increase closings from 2006 to 2007 and is probably the only builder to increase sales in 2008. A three-year consecutive increase, definitely puts them in a class by themselves!
#1 It's about attitude.
No matter how things are, the majority of the people complain. It's never good enough and you spend way too much time focusing on the problems. Dr. Wayne Dyer's famous quote says, "When you change the way you look at things, the things you look at change."
Case Study: In an interview I conducted with Eric Lipar, President of LGI Homes two years ago, he said "When I first heard the news reports about the housing slow-down, I decided that I would refuse to participate in it. Instead, we set our course for our company to sell more homes at a record pace, in three communities."
#2 It's about the people you hire.
If you think your business is built on your product, think again. Your business is built first, on the people you have working for you. You can have the best product, but if you don't have the right people, you'll find it hard to keep your business growing.
Case Study: LGI spends an enormous amount of time finding the right people and then spends the time in training, before anyone is allowed to spend time with a customer. They generally never hire from within the industry, as they prefer to start their people off on the right track.
#3 Once you have the right team, it's not about the product and it's not about the employees. It's about the customer and how you interact and treat them.
Show your customers that you appreciate their business, and they in return will continue to do business with you. Once management gets it, and the employees understand, the fourth rule comes into place. It may sound simplistic, and it is. The hard part is to understand that everyone you hire does not have the skills required to make all this happen. Who is to blame, the employee or the employer? Make no mistake, it starts at the top. I don't understand the logic of why some retail operations have their staff take their lunch during normal lunch hours. Isn't that the time consumers are more apt to connect with you, by phone or in person? One mailing service in our area closes during lunch hour. Go figure. Who is more important in this case? The consumer or the employee?
Why is it some retail businesses close their businesses at 5PM? When do you expect your shoppers to buy? The funny thing here is that local retailers wonder why people shop on line. Isn't it all about convenience?
One nationally known speaker, Bill Webb, who I have had the opportunity to work with says, " When a company has their phones answered electronically, the emphasis is on the company. When a company's phone is answered with a real human being, the emphasis is about the customer." What is more important to you?
If your business is about the customer, it is so easy to excel because the standards of customer service are so low. Your customers will keep coming back, when they realize that you really do care.
I've heard the comment that training is expensive and time-consuming. I guess it is, if you don't follow-through and you don't look at the overall picture. A noted speaker and author, Zig Ziglar says, "What is worse than training an employee and having them quit, to go work for the competition? The only thing worse is not training them, and having them stay."
Case Study: LGI focuses on the customer and helps them build dreams. Lipar says, "When a call comes in, it must be handled professionally. We make sure there is a 'live' person that answers every phone call and we keep sales offices open, when people are likely to shop. Our sales offices are open 8:30 am - 8:00 pm, 7 days per week. We keep 5-8 salespeople, an administrative assistant, a sales manager and a loan officer in all offices, to handle the calls and sales volume. We maintain a staff of 8-11 people per office, when most of our competition has 1-2 per office."
#4 It's about staying in touch, making your customers feel appreciated and targeting your audience.
Sometimes looking at our everyday experiences helps us to realize the bigger picture. I visited a new deli in town and they really appreciated my business and I felt welcome. Wow, I think I'll go back and spend some more money! You don't need to have a degree in marketing or business, to understand what you need to do to improve your business. It's all about common sense and the rules your grandparents taught you.
Case Study: LGI Homes sells to first time homebuyers. Knowing who their market is, they do targeted mailings to thousands of potential homeowners, every six weeks.
#5 It's about Training.
If you think training is expensive, you don't understand. Training is available by reading books, listening to audio programs, podcasts, one-on-one coaching, webinars and formal programs, put on by organizations and associations. You can even hire trainers to conduct specific programs for your company. If you are looking for a high return on your investment, try training. It pays ten-fold.
Case Study: In order to have the best people working for them, LGI keeps their emphasis on training and maintaining a professional sales force. This focus is so important that they established LGI College, for training new salespeople and employees. They spend a lot of time with new people before they get to work with customers, one-on-one. During the first 30 days they have to learn about the company, understand the product, shop the competition, know the local community, become familiar where all the key retail stores are located, and even have to shop the various apartment complexes in their area to see what is available and what kind of rental units that their potential customers live in. Once they have progressed to this point, they spend another 70 days in sales training. After 100 days, they are ready to serve customers and to start making sales.
All sales people are required to participate in a weekly four-hour training program, so they can improve their skills and must walk through all inventory homes every week. Expectations are very high and top performers earn a very high income. Those that don't have the right mindset and standards, are not allowed to stay on the team.
#6 It's about the management mindset.
Remember, it starts at the top. Our postal office in our community, recently changed supervisors and now customer service has changed drastically, for the worse. They are focused on the wrong things. My feeling is that they are focused on the bottom line, instead of helping and providing more service. Like all situations they will receive what they are focused on, because now I am considering getting my postage online. Be careful of what you desire.
Case Study: Top management at LGI is so focused on the process and why this is so important to consumers, that everyone else in the organization understands and maintains the same mission statement. The company focuses on three main business practices.
1. Adhere to self-imposed quality standards, far exceeding those in the industry.
2. Deliver customer service, unequalled by their competitors.
3. Embrace a corporate culture that upholds honesty, integrity and personal
accountability, at every-level of the organization.
As LGI Homes has found, there has never been a better time than now, to position your company to become the leader in your area! 


About the writer:
Jerry is the founder and co-host of the popular weekly radio program, BuilderRadio.com. He is a speaker, author, coach and consultant, that specializes in public relations, marketing and sales training for builders, housing companies and building product suppliers. He is also the author of four books and a frequent article contributor to numerous building trade publications. 
Jerry can be reached at jerryrouleau@comcast.net or via phone at 860.589.7391. www.jrouleau.com 


About LGI Homes:
Information on LGI Homes can be obtained at: http://www.lgidevelopment.com/


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