Today we are introducing a six week series on how to takeover a new home community where sales have stalled. We will be running a new installment each Wednesday leading into 2012. Although the focus of this series is on communities where the sales and marketing team has been replaced, a takeover is not required. These steps can be taken at any new home community to regain momentum.
In my career I have done many takeover projects, from condo conversions to new single family homes to luxury move-up and resort. There are few things as exciting as taking a stalled out community to consistent sales. Even better when it can be done while preserving, or even increasing, price points over time.
We’re not talking about short term takeovers which typically entail across the board price slashing to move a few homes, only to leave community back at square one in a month (and now with a bunch of homeowners who are disgruntled about lower comps).
We are talking about a takeover that creates short-term and long-term sales and positions your community for lasting success month after month. This kind of takeover takes time and effort, but it can be done.
In our experience, this process takes about six weeks to begin producing consistent sales. In this six-week series, we are going to walk you step-by-step through the action items for each week. That means that if you start this process now you will be positioned to start 2012 strong.
Week One: “Dirty” Research
Creating a takeover campaign that is successful for months, not just one weekend, takes
research. Not just what I call “white-glove” research (charts and graphs and conference room meetings with expensively-clad consultants), but roll-up-your-sleeves-and-dig-into-the-muck research. It’s tough to face, hard to hear, and few can stomach it. But if you have the guts, it is the best way to fast-track your community to more sales without an unnecessary waste of marketing dollars.
The “dirty” research steps below should begin the day you get the keys and will take a full court press from your sales and marketing team for the entire week. When the week is over, you will have the vital information needed to create the most effective marketing campaign to jump start sales, and you will also plant the seeds to create post-takeover success in the shortest period of time.
1. Call Every Buyer Currently in Contract
If sales have stalled, it is very likely an issue that is impacting every aspect of your new home sales community. Job number one on any project takeover is to save your existing transactions. This is the first thing you must always do as soon as you get the keys. Call each buyer proactively and explain that there has been a change (never let a buyer “wait to find out” about a change). Tell them who you are, how to reach you, assure them that the transition will be smooth for them, and ask them open ended questions about their experience so far.
Goals: Solidify the sale. Whenever there is a team takeover to create fast results, there is usually a high profile, sexy campaign designed to drive a lot of interest: additional incentives, short-term price reductions or loss leaders, increased broker referral, contests, whatever. Before those decisions are made, it’s imperative to get a read on current buyers and how to launch a campaign without compromising current deals.
2. Send a Survey to all Existing Homeowners
This is the leaky bucket. If your homeowners are unhappy, they are likely creating negative word of mouth online or offline. Nothing adds fuel to a potential firestorm of disgruntled homeowners more than a deaf ear from the builder or developer, and buyers have too many ways to vent online if ignored.
Create an email that explains the recent change (or ongoing commitment to a positive homeowner experience) and add a link to a survey on your site. Ask them to take five minutes to complete. This survey should be set up as multiple choice with room for homeowners to write about experiences, good or bad.
3. Follow Up with a Call and/or Visit and/or Meeting
There are two things that this will achieve. First, you will know how to close new prospects by asking homeowners what made them decide to purchase at that community. This will be critical information for your first post-takeover campaign. The second is that you will identify any homeowners that are disgruntled and might be creating a negative word of mouth. If there are issues, you will be able to identify which are consistent so you can resolve them and prevent further reputation damage.
Dig in as deep as you can on this, there is gold in it. Call more than once, knock door to door, or call a homeowner meeting. Create a homeowner mini-site where owners can submit direct feedback anonymously. You may take a beating, but if you are sincere about wanting to solve the problems and give them a forum to vent, you can turn disgruntled homeowners into future referrers.
Goals: Discover the top three reasons buyers really decide to buy at your community (don’t guess, don’t assume, and don’t default to cliche marketing messages or price slashing). Find out the top three issues homeowners have with their home (the leaky bucket that may be creating negative word of mouth and minimizing referrals). Get positive testimonials that will be used in upcoming marketing.
4. Call Every Buyer Who Cancelled in the Last 90 Days
Buyers who have signed a sales contract but cancelled recently are likely to have a treasure trove of information about what makes the community desirable enough to sign a contract (what’s working) and why they decided to cancel (what’s not working). It’s easy to lump a group of buyers into a cliche answer such as “worried about the market” or “couldn’t sell their home,” but it’s rarely that one-dimensional. Ask them, by phone or by survey, about their experience with the sales team, if they purchased somewhere else, if they are still in the market, and open-ended questions about their general experience. Ask them if they would refer the community to a friend, and why or why not.
Goal: Find out in short order what the critical issues are. If they are still in the market, ask what it would take to reconsider a purchase at your community. Winning back a buyer who recently cancelled may be your first post-takeover sale.
5. Email a Survey to Your Entire Lead List
If a project has stalled, it is very common to have a lead list that is not well-qualified (meaning prospect ratings have not been accurately assigned), or the list has gone stale because of lack of follow up (either by sales, by marketing, or both). If you have a large list (of several hundred or more), sending an email is the fastest way to get an early indication of how many prospects are still engaging from the list (and who they are). It takes time to call through a list of several hundred or more, and takeovers require rapid feedback models.
Send a 10 question survey to your prospects asking them to rate their experience, what they liked and what they didn’t, how soon they expect to make a purchasing decision, and more – you guessed it – open ended questions designed to uncover information (good or bad) that you may otherwise miss.
6. Call Your Entire Lead List
Once your email has been sent, use the reporting from your email service provider to identify which prospects actually clicked through to your survey. Call them first. Then identify those that opened, but did not click through. Call them second. From there, sort your list by date and call those who have visited or registered most recently, and go backwards. Ask them to complete the survey. Email the link.
After 24 hours have passed, split test your email to everyone on the list who has not opened their email and repeat the process.
Goal: Identify strong leads to begin the process of re-rating your database. Get as much survey response as possible so that you can establish trends. For example, one prospect telling you that your pricing is 6% off market is worth noting, 43% of your current prospect database telling you the same thing is actionable (either lower pricing or find ways to establish a higher value proposition for buyers).
Like prospects who recently cancelled, this step is most likely to be an immediate source of post-takeover sales.
7. Call Every Broker and Realtor™
If you want to fast track sales after a takeover, call every agent/broker/Realtor™ that you can find. Call agents for buyers currently in contract, call agents who represented buyers on previous transactions, call agents who represented buyers in escrows that previously cancelled. Call agents who have brought buyers in who did not buy, call agents who registered online but who have not visited. Call any agents you know who are familiar with the area. Visit local offices of agents who do not seem to have had any previous engagement.
Buyers, prospects, and homeowners will give you an emotional response to your homes and their experience, but agents will often give you insight on market perception of your homes. Statements such as, “I will not show your homes because…,” “My buyers did not like your homes because…,” or “I heard through the grapevine that your homes are…” provide invaluable information about how to position your first marketing campaign.
Goal: Gather relevant market data about your community in relation to the market, as well as identify any issues with price, presentation, sales, incentives, reputation or referral. Ask the question, “What would it take for you to feel good about bringing your clients to [this community]?” (This may seem counter intuitive to the more direct “Do you have any clients that might be interested in our homes?” However, your goal at this time is to gather information and enroll them as a partner. Asking what YOU can do for THEM is a better relationship building tool and one they’ll remember when they have a client.)
8. Do a “Dirty” Competitive Analysis
Beyond charts, graphs, third party reports, competitor’s websites, drive-bys, and other white-glove research, which you are likely to already have completed before taking over the project, do a “dirty”competitive analysis. Get in your car and drive to every competitor. Attend open homes of resales in your community (If you are in sales and work on Sundays, get your marketing person to do this, but it’s strongly preferable that sales also views competing resales.) This should be done monthly, so if your original analysis was done more than 30 days ago start fresh.
[Bonus: Download a Sample Competitive Report]
If you’re serious about jump-starting sales in 2012, it may require looking down the barrel of some very uncomfortable truths. But in the end, you will save thousands of dollars by working from this information rather than hit and miss marketing campaigns based on incomplete or incorrect buyer perceptions.
Now that you’ve gathered all of this information, in Week 2 we’ll look at how to translate all of the data you’ve gathered into actionable next steps.
Need Some Help with Your Takeover Project?
Contact us today to find out more about how we help builders jump start sales in underperforming communities, including “dirty” research consulting.
