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schedule to one-third on earnest deposit, one-third on cabinet installation or hard loan approval and one-third on closing. Get sales managers out of their offices and into the field at least 60% of the time.
Taking a somewhat different view, Larry Kush, president of Montevina Homes in Scottsdale, AZ, believes that a two-person sales office creates healthy competition and that hostesses don’t pay off in any environment. But he does agree that builders need to take a hard look at staffing. “Don’t do it in marketing or sales,” he advises. Target office staff or assistant superintendents instead.
Cultivate the Realtor® Community
When traffic slows down is the time to tap into existing resources, says Jerry Costanzo, MIRM, vice president of marketing and sales for Creekstone Homes of Colorado Springs. “If you’re not already jazzing up your Realtor® program, now is the time to do it,” he says. But he warns that if you haven’t maintained good relations all along with the Realtors® in your community, don’t expect their support overnight.
This is also the time when salespeople more than ever need to be obtaining cards from their prospects and following up on their visits, and model homes need to look their best.
Rather than jumping to lower prices as a way to increase traffic, Costanzo recommends meeting margins by adding value. Another strategy is to redesign an existing model by cutting costs and renaming it. If you reduce prices on an identical model, you’ll be in trouble with all of your contracted buyers, not to mention scooping your appraisals. Above all, review your product and your market and make sure your offerings are competitively priced.
The Customer Is King
Swallow says that difficult periods require switching from a volume-based strategy to one oriented to the customer. No one agrees more than Joe Turner, a customer service expert and consultant out of Northern California.
One approach is adopting a dual walkthrough system. When deficiencies are corrected before the buyer moves in, the builder will have fewer callbacks in the first year and realize substantial cost savings.
Another cost-saving strategy is to tighten the terms of the warranty policy so that cosmetic items, when corrected before the buyer moves in, are not subject to warranty service requests after the close of escrow. This alone can reduce first-year requests by as much as 80%.
Costanzo suggests going straight to the buyers for their help. “This is a time to do the market research you didn’t have time to do before. Find out what your customers are looking for. Within a reasonable price range, those extra touches can make the difference.”
Jan Mitchell is senior editor of Sales & Marketing Ideas magazine and a writer for the housing industry. She is the author of “Sales & Marketing Checklists for Profit-Driven Builders,” published by BuilderBooks.com, and a member of the National Association of Real Estate Editors.
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