Tactics, Tools and Timing for New Home Sales Success in 2016
2016 new home sales projections were recently released and of the four key Texas new home markets, it looks like Dallas / Ft. Worth was the only one left without a nick. Sinking oil prices left Houston with an 8%-15% projected drop in units, and Austin and San Antonio were essentially flat with growth only anticipated in the lowest price points sufficient to counter unit reductions in the higher ones and hold sales unit numbers close to those in 2015. The challenge is compounded by many builders setting 2016 sales expectation numbers 10-25% higher than those they achieved in 2015! To meet these ambitious goals, builders will need to find a way to grow overall sales unit numbers and increase their market share in a shrinking or flat market. The math is simple: if your total market sold 100 units, and your division sold 10 of those units, you had 10% market share, but when the market shrinks to 80 units and your projections increase to 12 units, not only do you have to get two additional sales (a 20% increase in a smaller market), you also need to grow your current market share from 10% to 15% and that takes some doing! Growing units in an expanding market is easy, but growing market share in a shrinking market is how you tell the smart operators from those just along for the ride. 2016 is going to be a Battle for the Buyer, and here are a few strategies to help your sales and marketing teams win.
2016 Battle for the Buyer
Since growing the new home category (the number of new homes sold in a market) is influenced by things out of our control (employment, migration, interest rates and …oil), marketing teams should focus on the buyers the market is already producing, expand their influence within the market to reach as many of them as possible and then capitalize on every single opportunity that crosses their virtual or actual threshold. Builders that don’t approach this year with buyer centric campaigns featuring the right tactics, tools and timing will be left in the shopper’s dust
Part 1: Tactics for a Shrinking Market
- Focus on the shopper you have, not the shopper you want. Today’s market is already producing buyers, they’re just scarcer than they were last year. Find the places where shoppers hang out and deliver your information to them to create “1 on 1” influencing opportunities. In other words, go to the shopper instead of trying to get the shopper to come to you. Don’t waste money on trying to grow the new home category or trying to pull shoppers from the pre-owned home market. Target the buyer who has already shown intent to buy new construction. You know who buys your homes; go get more of them. Focusing on the wrong demographic is messy, inexact and expensive. Millennials are sexy and fun to talk about, but you’re not selling shoes and iPads; you’re selling houses and less than 15% of that category (Leading Edge Millennials) are considered viable buyers. Most projections still target Gen Xers as the “low hanging fruit” in the new home market. They have money, jobs, don’t currently live with their family, are not afraid of a new home purchase, have already paid off their school loans, have children and partners and are responsive to traditional advertising. Remember, Millennials lived through the last downturn where many were personally touched by the loss of a family or friend’s home and were inundated with horror stories for years about the housing and mortgage industry collapse. As a group they are timid with this purchase, and we’re already seeing news stories about the housing downturn hitting the news cycles. Since advertising resources are limited for most of us, moving ad dollars away from proven buyers to unproven ones may make you feel edgy, but it will keep you on the sidelines and playing from the back of the pack in 2016 and 2017.
- Focus on Comparative Value. How does your value, lifestyle, product, presentation and packaging stack up against the builder they just saw or the one they’re going to visit next? Since very few shoppers buy on their first visit to a community, the real goal of your initial encounter is to get them to come back for the second meeting where you really do the heavy lifting. Your team must be effective selling against apartments and pre-owned homes, but if you don’t have a compelling pitch against the builder down the street, get ready for a tough year. Most sales people can’t win the sale on the first visit, but you can certainly lose it on the first visit. What makes shoppers come back? Trust, professionalism, product knowledge, active listening, new information and value. This approach makes the sales person emotionally vital to the shopper as an agent of positive change. Builders don’t sell homes, people do. Make your people important to the shopper with value-driven collateral, presentations and new information they can’t get anywhere but from them and they’ll sell more homes.
- Leads. Leads don’t buy houses, people buy houses. The sooner your team can humanize any lead by putting a face on it, giving it a street address, children, discovering their hopes and dreams, the better shot you have of delivering relevant information to them and getting them into your model. In most cases, web leads will let you know exactly how to market to them if you just look at the lead. Here are some easy points all sale people and online sales people should do with digital leads. Immediately respond to the person with a short email containing all your contact information, let them know you’re available and are putting together some helpful information that you’ll deliver to them later in the day. Next, “Read the Lead” and learn everything about the shopper that you can. Many lead forms contain information about their current neighborhood, what time they shop online and what communities or builder’s websites they’ve visited online. You can also look many shoppers up on Facebook, LinkedIn, Pinterest, or Google and can then tailor your follow-up to the shopper’s relevant points. Responding to an e-lead can’t be about you or your products: it has to be about the shopper, their situation and their dreams. Don’t attempt to sell the shopper a home in an email. An email is a marketing tool and marketing is about moving people, not moving products.
Parts 2 (Tools) and 3 (Timing) will be posted in upcoming weeks.