ShareThisBuilder Sales Tips to Increase Your Closing Ratio
Home builders and new homes sales professionals had it easy not too long ago. Practically anywhere in the country in 2004, 2005 and 2006 all one needed to do was stick a sign in the ground announcing a new home, or community, and the orders poured in. Our salespeople became order takers, and consequently some basic selling skills weren’t practiced and became rusty. For the sales rookies during this time frame new home sales strategies were sometimes never introduced to them. Why bother? We were all too busy getting rich.
The basics of new home sales are not any different from selling any other big ticket product.
1) Sell yourself before you sell your product. People buy from people they both like and trust. Listen to your customers, pick up on their needs, and be genuine.
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2) Have a sales process. A sales process allows you to control the presentation, the release of information, and every follow-up step. This sales process should be mostly scripted and then practiced over and over again. The large national builders I have worked for routinely have their sales people engage in role playing, and I would say this one discipline is what separates the pros from everybody else. As the boxer George Foreman once said, “Training should be harder than reality.”
3) Learn the sales language. Words shape and define our perceptions and biases. A great salesperson never criticizes the competition, but instead uses prejudicial wording with negative connotations to make the point subtly. To create positive associations we don’t use the word “agent,” rather we call ourselves “representatives” or “consultants.” The purchase of a new home is not a “deal,” it is a “value” or “opportunity.” Similarly, our lowest priced home is not the “cheapest,” it is the “best value,” or “less expensive” home. Notice I didn’t say it was a “house,” which sounds cold and unemotional. I called it a “home,” conjuring up images of family and togetherness. I don’t build “spec homes,” but I do have special opportunities on “quick delivery homes” from time to time. One of the most common errors? We don’t call our dream parcel of land a “lot,” we call it a “home site.” Finally, we don’t say “sell,” but rather we help the buyer to “own” or “acquire.” Therefore, I would not be criticizing my competition if I told a prospective homebuyer that “Frank Sands is a fine agent. He sells some of the cheapest houses on lots that his conglomerate bought at a bankruptcy sale. I hear they have a lot of empty spec homes in his subdivision that are real deals.”
4) Leverage product knowledge. Selling a new home offers many advantages over selling a used home? The most obvious difference is that the new homes sales professional is wed to their product, they can’t sell anything else. Therefore they are far more knowledgeable about the features, advantages and benefits of their homes, as well as the builder’s story. For the sellers of certified high-performance homes this is very important, as product knowledge, building science comprehension, the builder’s accomplishments and reputation can’t be glossed over. However, those attributes must be communicated effectively to establish perceived value.
5) Co-operate with Realtors. If you’re a smaller builder, list your home with the Realtor who knows your market and target demographic best. The builder, who does not have in-house sales staff, should inform the Realtor that he will conduct the sales presentation when the Realtor has an interested buyer. The builder knows the home better than anyone, nobody is as enthusiastic and passionate about the home as the builder, and it is the builder who must establish an iron-clad bond of trust with the buyer in order to close the deal. Home buyers today are leery of what kind of service they will receive after the sale. They’ve heard all the horror stories of home builders not standing behind their product, so it’s imperative that they buy the builder before they buy the home. As a small builder I have personally seen this dynamic in action. My homes were complicated, with a lot of high-end features. My Realtors were happy to let me do the talking as I asked the prospective buyers about their lifestyle, likes and dislikes in past homes, and demonstrated my home in a way that emphasized location, community, and the home’s features and benefits that they just told me they valued. Successful presentations were almost always accompanied by a certain look in the eyes of the buyers, a look of 100% emotional commitment that caused me to call my partner and tell him an offer was forthcoming. Rarely was I wrong.
6) Ditch the monologues. In the past several decades sales techniques have evolved considerably, to what is known as the New School of Selling. The Old School of Selling, adhered to by many up to the 1970’s, consisted of strategies such as features and benefits presentations, or the “Ben Franklin T-close.” These presentations are largely monologues. They suffer primarily because there is a lack of meaningful dialogue between the seller and buyer, and consequently the seller rarely understands the buyer’s motivations and “wants”.
There is a profound difference between “wants” and “needs” that salespeople need to understand to increase their closing ratio. Our needs are basic and logical. We need food, water and security. Conversely, our wants are endless and emotional. You can learn the buyer’s wants simply by asking the right open-ended questions that are simple and that encourage long answers. Then listen attentively. This is known as “discovery.” Use what they divulged to demonstrate how your product satisfies their wants. Your customers will ultimately decide to purchase your homes based on emotions. Once emotionally committed they are as good as sold, at which time they’ll use logical rationalizations to justify their purchase decision. Give the home buyer what they “want” and they will give you what you want, another signed contract!
The Old School of Selling was discredited because the buyer perceived it as manipulative. Very little time was spent on developing rapport and trust because most of the focus was on the closing, which may have been 40% of the emphasis. The New School of Selling stresses that 40% of your time should be invested in building trust with the prospect, 30% of your time is devoted to discovery, presenting solutions should account for 20%, and the actual closing only takes 10% of your time. Why only 10% for the most important aspect of sales? Because if you’re a professional who takes the time to build trust, discovers your prospect’s agenda and motivations, and helps them find solutions to their problems the close will often be a matter of “your pen or mine.”
7) First impressions are important. It’s what your mother told you. When first meeting a prospect you must convey enthusiasm, efficiency, competency and confidence. Make sure your community, job sites, model home, and sales staff all exude an air of professionalism. People don’t buy many homes in their lifetimes, so they are likely going to be confused and uncomfortable with the process. They are dependent on you to consult with them and be their guide. Use this dependency to establish yourself as their trusted advisor and you’ve cleared hurdle #1. Many buyers will tell you they’re in a hurry because big ticket items are purchased by utilizing the process of exclusion. They’re in a hurry to cross you off their list. Other buyers will deploy a self defense mechanism known as “I’m just looking”. That is almost always the universal response to the sales professional saying “may I help you?” You know the response – “No thanks, I’m just looking.” In my next blog I’ll detail exactly how the new home sales professional converses with a home buyer and give several sample scripts for the most common responses, including how to ensure you never hear “no thanks, I’m just looking” again.
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