Credit: Craig Jones
The importance of preparationcannot be overstated. It’s often the difference between success and failure, between best in show and also-ran. Add strong execution to preparation and you have the ingredients for powerful success.
An opening-round game in the March 1996 NCAA basketball tournament illustrates the point. The fourth-ranked defending national champion UCLA Bruins are playing the over-matched but well-coached Princeton University Tigers, ranked 13th. By all accounts, this game should have been a routine drubbing. Instead, a well-prepared Princeton team executed unsexy, archaic offensive sets, court spacing, and timely shooting to pull off perhaps the greatest upset in the history of the tournament.
What does this story have to do with selling homes, you ask? Lots, really. It shows that with great preparation you can win despite steep odds, and the current housing market certainly presents those.
Strong execution takes on added importance given the pending expiration of government tax credits for buying homes. Builders must not only secure signed contracts by April 30, but must close on the homes by June 30.
To do that, companies will need to have both their sales and production game plans in order. Marketing must be on message. Extra laborers may be needed to ramp up production. The back office has to turn paperwork around quickly. And the sales staff needs to put on its best game face.
There are many ways to prepare your company for the spring selling season, but some will undoubtedly be more effective than others. Here are 10 of the best ways we found to get your team ready to sell as many homes as possible in a depressed housing market. Pick the ones that make sense for your business and get the season off to a good start.
1) Preparation, Preparation, Preparation.
This can’t be emphasized enough. The last thing you want to do is be caught flat-footed when the selling season is at its peak. Don’t wait to get things in order. Unlike previous years when the getting was good, this will be another lean year for the industry so builders need to do everything right. If you have inventory to sell, make sure it’s in move-in condition. Get your sales team primed and ready to close deals. “You need to have a salesforce that knows what it’s doing,” says Bob Schultz of New Home Sales Specialists in Boca Raton, Fla. They need to be well-trained in engagement selling, and they need to get in a mindset that fosters productivity. “[Salespeople] need to understand they are in a retail business not a real estate business, so they must show up on time everyday and have the models ready,” he adds. Lastly, plan your marketing schedule now to formalize what message you want to convey.
2) Have Specs in the Ground and Ready To Go.
This year, the spring selling season will be a make or break time for many builders. Those still looking for capital and those who are far behind in construction could be toast. “If they don’t have inventory, they might miss the season,” says Chuck Shinn of The Shinn Group in Littleton, Colo. The problem is that most banks are still slow to lend, and with the deadlines approaching, a builder will need to have houses ready to go pretty fast. The tax credit requires that homes be purchased by April 30 and closed by June 30. If a builder is starting from scratch, homes will need to be in the drywall stage and beyond by April 30, Shinn says. This would be tight under the best of circumstances, which is why starting earlier is better.
3) Organize Subs and Crews To Build Efficiently In A Short Amount of Time.
After the housing market crashed, many construction workers were forced to find employment in other fields, leaving a dearth of qualified and reliable subs to build houses. The problem may be more serious in some markets than in others where the job pool is deeper. This means that builders will need to create a pool of good people to finish their houses and do the job efficiently. Start looking for people and subs now through employment agencies or check with immigrant workers’ centers where you can hire legal day laborers. Now is also an excellent time to strike deals and incentives with subs to get consistent work performance in exchange for a specified amount of work.
4) Use Dynamic Marketing Media.
Yes, newspaper ad placement worked for you in the past, but times have changed and the audience is much more fragmented. “There has been a shift in media, but print is not dead,” says Mollie Elkman, vice president of Group Two Advertising. “You can still incorporate it, but in a new way.” Elkman recommends adding social networking media such as Facebook, Twitter, and even YouTube as a way to augment old-school print. The idea is that you never know who your buyer will be—young, old, single, tech savvy—so casting a wide net can help. “Part of the social media strategy is reaching out to find people instead of waiting for them to come to you,” Elkman says. The added benefit of using social media is that it’s inexpensive and you can easily track the effectiveness of your ad dollars based on the traffic, followers, and hits.
5) Educate Your Buyers.
It might seem counterintuitive to educate consumers on the various issues associated with buying, only to watch them buy somewhere else, but it can benefit your business in the end. For one thing, it can make life easier for your sales team. Earlier this year, KB Home hosted nationwide “How to Buy a Home” events to help the public understand the ins and outs of home buying. The educational events, says Wendy Marlett, the company’s senior vice president of sales, marketing, and communications, were designed to provide home buyers with useful information and answer any questions about purchasing a home. “This will help buyers determine if homeownership is right for them and find out why now is a great time to buy,” she adds. Educating buyers also helps them understand why an energy-efficient house costs a little more but is worth every penny, or why upgraded insulation will save money on utility bills every month.
6) Give Your Website A Shot of Adrenaline.
It used to be good enough for a company to merely have a Web presence, but in this new fast-paced world of changing technology, simply having a website is not enough. If you do more with your website, it will do more for you. Your website can be used to educate and entertain your buyers, and it can be used to promote your communities. Explore the idea of streaming third-party video content on your site or produce and develop original content with company personnel as a way to get and keep potential buyers on your site. In the Web world, it’s called creating a “sticky” site. “People are visual, but they like to hear about things as well,” Elkman says. “From a marketing standpoint, it comes down to message and messenger. Video is huge.”
7) The Home Buyer Tax Credit Is Your Friend, So Get the Word Out.
Last fall home buying spiked as buyers took advantage of the $8,000 tax credit. The National Association of Realtors reported that first-time home buyers drove existing-homes sales in October up 10.1 percent over the previous month. But Shinn says he spoke to many builders whose buyers were clueless about the credit. “A lot of people did not even know they qualified,” he says. “Our industry did not do a good enough job of promoting it.” His suggestion: Promote the tax credit in all marketing campaigns and have the sales teams adopt it as part of their presentation. Reminding potential buyers that the credit is set to expire also creates urgency. And don’t forget, this time around there’s also a $6,500 credit for existing-home buyers.
8) Personalize Your Communities and Your Ad Campaigns.
If you’re lucky enough to have whole communities to sell, then you should think about giving each one its own website for promotional purposes. For example, if ABC Builders is working on a community called Village Green, it could set up www.livevillagegreen.com as an additional website. The same strategy can be applied to special promotions. You can get your promotion of the home buyer tax credit its own URL using something like www.homebuyertaxcredit.com or perhaps www.8000taxcredit.com. A builder could also use www.800month.com to promote houses with an $800 per month mortgage. Setting up a separate URL is relatively inexpensive, but it gets the word out and allows you to track if the dollars spent were actually effective in driving traffic to the community. “It’s retail thinking applied to the home building industry,” Elkman says. Just make sure the special URL drives traffic back to your main website.
9) Organize Your Back Office to Facilitate Transactions.
In a crunch, there can be no wasted time. This is not the moment to be securing financing to build houses; that should have been under way last fall, so if you’re doing it now, you’re too late. All the proper forms should be close at hand, and all handouts for buyers—warranty information, user’s manuals, and community information—should be stocked and ready to distribute. Moreover, all work, repairs, and punch-list items need to be resolved by early spring.
10) Remember That the Surrounding Community Is Just As Important As Your Houses.
Everyone knows that in marketing you don’t sell the steak, you sell the sizzle. But in home building, both are important. You can have the greatest house with the best kitchen and most awesome master bathroom suite, but if the house is perceived as being too close to a highway, in an undesirable school district, or out in the sticks, it will sit ... and sit for a long time. Publicize the ancillary benefits of buying one of your homes. Highlight the fact that there is a farmer’s market one mile away, or that it’s located near transit or within walking distance to coffee shops, bookstores, or a swimming center with after-school programs. Promote the community-oriented nature of your location that will make a buyer think, “Yes, this is the house I want to buy in a place I want to live.”