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Schultz Tells Builders What to Do to Step Up Sales
Florida’s overall housing industry will have to endure more pain before it finds the road to recovery, a process not being helped by economic conditions suggesting that the state has fallen into a recession, economists said during a July 31 presentation at the Southeast Building Conference in Orlando.
But simply waiting for conditions to improve is a losing proposition and there are things that builders should be doing to meet their business objectives, said Bob Schultz, MIRM, CSP.
“The market is what the market is,” said Schultz. “You have to decide if you want to stay in this business — decide where you are, where you want to be and how to get there….Let’s diagnose where we are and what we’re going to do about it.”
“Doing what we did during boom times will not get us to where we need to be,” Schultz said. “We must be extra-ordinary to get through it, and hope is not a strategy.”
Schultz made several points on what builders should be doing in today’s down market:
- Builders need to be creating a positive perception of the current market. “Our opinion of what’s happening is critical and positive belief systems have to start with me,” he said. “We have to believe there is a ray of hope, or nobody will follow us,” and sales people trudging to their job and down in the doldrums are not going to inspire prospective buyers to celebrate the opportunities that exist in a buyer’s market. The constant barrage of negative reporting on housing by the media sells newspapers, but it also has created confusion in the marketplace. “You have to know what the newspapers are reporting,” he said. “We above anybody cannot be confused.”
- “Analyze everything you do,” he said. Then, “try to be 2% to 3% better in everything you do and extraordinarily better in a few things.”
- Schultz told builders not to worry about the things they can’t control, such as interest rates or what their competition is doing, and instead focus on things they can control, such as the buyer’s perception of interest rates. “Sell against rising interest rates,” he suggested. “Every one-quarter increase erodes their buying power.” Remind prospective buyers who are waiting for the market to bottom out that nobody can know for certain when that will happen, but “once it has happened, it goes up fast,” he said.
- Sales personnel should “dress to sell, not to kill,” he said; low blouses and short skirts are inappropriate.
- Builders should emphasize “any sales success whatsoever,” he said. “Find your good news and write about it; put it on your Web site.”
- Remember that selling houses is not about selling a commodity. “There are other builders who can build a similar house for less. It has to be about the total experience,” Schultz said.
- Have a Web site that comes up in the top five of a Google search, he advised. People use a process of elimination to narrow down their choices. When they go to your Web site first and then come out to see your homes, “it’s not their first visit. It’s their second visit,” and that presents a higher chance of selling.
- “The conversion ratio and market share indicate how you’re doing,” Schultz said. Builders should receive traffic reports daily. “Constantly ask yourself, how many sales and how much revenue are we missing,” he said.
- “We are in the retail business, not real estate,” Schultz said. “Be open for the convenience of the customer, not the company.” If weekends are the hottest times for prospects, then capitalize on that and keep longer hours on those days.
- Assess your sales organization. “If you have people you wouldn’t hire today, then why are they there?” he asked.
- “Be unreasonable,” he said. Don’t accept reasons or excuses for poor performance. “If a sales person can’t role play, find somebody who can.”
- “Sales people need to know how to present value and defend the builder,” Schultz said. “Don’t listen to their opinions about themselves and their comfort zone. It’s just manipulation.” He called buyer incentives “knee-jerk reactions” and “no strategy whatsoever” if sales people are allowed to give them away up front.
- The experience of sales people — especially if it was shaped during the housing boom — “can have a negative impact,” he said. Sales people who did nothing during the boom times but confuse the size of their paychecks with their skill levels probably also developed some bad habits while doing it. It’s time for them to get back to basics.
Schultz reminded his audience that builders have managed to survive hard times before under conditions that were arguably worse than those that exist today, such as the 1981-82 period when unemployment, inflation and interest rates were all far higher.
However, he cautioned that maybe only 10% to 15% of today’s builders will have the will to do what they need to do.
For anyone interested in seeing what a difference going to new home sales boot camp can make, Schultz recommended his Web site — www.NewHomeSpecialist.com.
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