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Generate Sales with a Wide-Ranging Incentive Program
 One effective way to generate more sales is to create a comprehensive price incentive program that encompasses all the various aspects of home building.
The program should include a combination of any of the following — monthly price increases; financial incentives; product incentives, including appliance packages; and delivery incentives, including landscape packages, discounts at furniture stores and more.
One element of the sale that should not be discounted, however, is the price of the home. Discounting the price would affect the appraisal value of the homes you already sold in your community — and foster some ill will among your previous purchasers.
When initiating an incentive program, establish start and final dates for the incentive. By incorporating a final date, you sales team can create a better sense of urgency with potential buyers.
Incentives Worth Considering
- Monthly Price Increases — By creating — and sticking to — a regularly scheduled price increase program, you create a sense of urgency among potential buyers who would otherwise dawdle. Regular price increases get them off the fence and into the sales office.
The monthly increases should cover one of the following on any given month: base home price increases, option price increases or lot premium price increases. Please note: only one of the aforementioned price increases should be offered during a given month.
An example of a typical monthly price increase program follows:
With a lower rate to work with, a potential buyer may be able to buy more home for the money, add more or even choose a premium location within your community.
- Product Incentives — Product incentives are a good tool to get movement from fence sitters, or to get buyers to use your design center or purchase more options.
For example, you can offer the first five, 10 or 20 purchasers within a particular time period an appliance package — a washer, dryer and refrigerator, for example — included as part of the purchase price.
Or you can give a face-value credit for options available through your design center. For example, you can offer a $2,500 credit for a flooring or countertop option that can be applied to the purchase price, again if it is redeemed within a specific time period.
- Delivery Incentives — As with product and financial incentives, you can also offer a price incentive for homes that can be delivered at a certain time. Be sure this is structured so that it is an incentive based upon delivery and not one that appears to be a discounted home offer.
The delivery incentive can take the form of additional front yard landscaping, shutters, drapes, furniture — arrangements can be made with a local or brand name company — for closing in a timely manner.
When instituting an incentive program, market your program creatively and be sure the program is available to all potential buyers.
Once in place, determine which incentives work best for your particular market and repeat them as necessary. Also, continually adapt and institute programs until your last home is sold and has closed.
S. Robert August, MIRM, is president and founder of S.Robert August & Company, Inc., a national marketing and public relations firm based in Denver that specializes in providing home builders, developers, Realtors®, manufacturers and lenders marketing/management consultation and sales training. August is an owner of Colorado-based RealtyWorks, Inc. a real estate brokerage company. He is also past chairman of NAHB’s National Sales and Marketing Council. For more information, contact August by phone at 303-220-8480 or via e-mail.
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For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas Magazine (http://www.smimagazine.com/). Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.
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- The MIRM designation programs for new home marketing professionals
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For more information on these designation programs, click here.
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