How to Maintain Consistent Sales Growth in a Down Market

It can be tough staying upbeat as a sales leader when buyers are staying away in droves.

As the great Yogi Berra said…

“If people don't want to come out to the ballpark, nobody's gonna stop 'em.”

My intention with this article is to help you and your sales team get through the challenging market shift we find ourselves in today.?

How We Got Here

First, let’s examine the situation we face here in the final quarter of 2022.

In the beginning of this year, realizing that inflation wasn’t transitory, a sleepy Fed finally woke up when they noticed it wasn’t going away. And like a junkyard dog suddenly aroused, they turned hell-bent on annihilating inflation — no matter the cost.

As a result, the tide went out with astonishing speed for many home builders this past summer, revealing a lot of naked swimmers.

The seemingly endless stream of buyers vanished. Preventing cancellations became the order of the day. For many of us, what appeared to be an invincible competitive advantage evaporated — and margins right along with it.

A sudden shift toward buyer reluctance and reduced borrowing power now dictate a whole new set of rules we must adapt to and master if we’re to survive and thrive in current market conditions.

As a highly successful sales professional and now consultant to the home building industry, I’ve seen down legs in the cycle before. And now my team and I are doing everything we can, sleeves rolled up, working long hours, six days a week to help our clients successfully navigate this one.

How to Get Through It

Yes, these are nerve-wracking times for home builders. And certainly, no time to bury your head in the sand.

We’ve had it easy the past couple of years. We’ve forgotten the meaning of customer focus. We’re having to shift from an easy abundance of ready, willing and able buyers to daily blocking and tackling, grinding our way to the goal line, one sale at a time.

When the lead flow dries up, it becomes absolutely critical to qualify every lead carefully. We can then put all our energy into nurturing and cultivating only those who can and should buy a home from us now. After all, buying a home from us today is not for everyone. Some will benefit, yet many won’t. And we’re wasting our precious time and theirs trying to squeeze blood from a stone.

Crucial to your success or failure in this kind of environment is discovering early who is qualified, and who isn’t. We can then focus all our time and energy where it matters most, and allow only the most qualified to drive what we offer. This is how we stand out — not by catering to everyone, but by putting a laser focus on what matters most to the most qualified.?

My question to you then is, what are you and your team doing to identify your ideal customer? What questions are you asking them? What’s motivating them today, in this environment? What factors will cause them to buy, and what are they hesitant about??

And most importantly, how can you most accurately adapt your feature set to their needs, their desires and their values? What can you offer that best fits their vision of home ownership?

Not until you’ve made this connection and gained a clear picture of who you want to attract (and who you don’t) will your team be able to articulate an effective message in your marketing, and in every sales conversation. This unique value proposition acts like a dog whistle. It’s inaudible to those who would waste your time, and irresistible to the ones who can and should buy a home from you in today’s environment.

And please bear in mind: Without a clearly defined value proposition for your ideal customer, discounts and incentives can be dangerous. They are NOT to be used as blunt weapons. You must handle them the way a master surgeon handles a surgical instrument. Deployed without thought, they can needlessly destroy profits. Used wisely, they can have an almost miraculous effect on your business.?

Helping Your Customers Believe

Buying (or not buying) a new home today is one of the biggest financial decisions families, couples and individuals will ever make. It pays to help them really understand what’s involved. It’s our job as business leaders and sales professionals to help our best customers get through what they may feel is a difficult decision process.?

Broadly speaking, we need to help them answer three key questions:

Why New?

With mortgage rates rising, current homeowners may feel hesitant about trading into another house with a higher rate. However, by working with our lending partners, we can often mitigate the impact of higher rates with creative structuring.

And then there are all the usual benefits of owning a new (vs used) home:

• The ability to stay current with design trends including open floor plans, high ceilings, plenty of natural light, useful storage space, etc.
• The joy of living in a home that’s clean and has never been lived in before
• Design options to suit buyer tastes, preferences and values
• Lower maintenance cost — New roof, HVAC, appliances, etc., all under warranty
• Eco-friendly and reduced energy cost (a serious consideration as oil and gas shortages loom)
• All the amenities of a master-planned community

And with today’s inflationary economy, by the time your customer actually ponies up the money, they’ve already got built-in equity from ongoing price increases.

Why Now?

One of the biggest challenges scaring away otherwise potentially good buyers today is affordability in the face of skyrocketing mortgage rates. Helping buyers overcome their concerns about the monthly payment will go a long way toward your success in today’s market.

Contrary to what many prospective home buyers fear, we are not in a housing bubble. As you’ve no doubt heard, from 2012 to the present, well over 12 million new households were formed, but only 7 million new single family homes were built. As a result we’re short somewhere north of five million homes here in the U.S. And in an increasingly tough regulatory environment, with ongoing labor and land shortages, the supply side of the pricing equation portends even greater price increases ahead.

Often, prospective buyers are comparing today’s rates with last year’s outrageously low rates. And naturally, they may regret having missed out. However that was yesterday — What counts is tomorrow. A more realistic way to look at the issue of current rates is to consider the cost going forward. And given the Fed’s current stance, that may well entail even higher rates to come.

With all these factors in place, even with interest rate headwinds, right now may be one of the best times in history to buy a new home. It’s why we advise our sales teams to encourage prospective buyers to “date” the rate and? “marry” the house. In other words, capture the value built into their new home and replace the rate when a better one comes along.

When buyers see the big picture, they’re better able to make decisions today they can feel great about three to five years from now. Otherwise they may regret missing out on what will seem like a bargain only in hindsight.

After all, in the grand scheme of things, especially in a time of inflation, the price you pay today could seem like a pittance tomorrow.?

Why Not?

Strategic questioning to uncover hesitations and objections is critical to your company’s overall game plan in a down market. By finding out what your ideal customers secretly desire and what puts them off, you have the opportunity to craft product and offers that will attract the right buyers, and close more deals with them.

If they’re concerned about the sale of their current home, consider building more flexible contingencies into the deal. Offer optimal timing on delivery, or even trade-in deals if you can swing it.

Often, new home buyers feel overwhelmed with all the choices to be made, and wary of making a bad decision at any point in the process. This is where your team’s experience and empathy can be a real competitive advantage, helping them overcome their fears with strong support from folks they can trust..

The key is to remove as much friction from the buying process as possible. Our job is to make it so the only logical answer to the question “Why not?” is “No good reason, where do we sign?”??

Helping Your Sales Team Believe

With their compensation tied to your success, these are especially trying times for your sales people. And they cannot sell for you unless they’re sold themselves.

Only by finding out, with all the specificity you can muster, exactly what’s working NOW for the prospective new home buyer who can and should buy from you either today, or in the next few days or weeks, and communicating that clearly with your team will they be able to believe.

And that belief is what’s going to carry them — and your company — through the day.

The people in your sales team feel the brunt of the phase we’re passing through more than just about anyone in your organization. A renewed focus on finding the right customers and doing everything you can to provide them with what they want is key to helping your sales team develop the passion and grit to keep going in spite of all odds.

Because let’s not forget, this too shall pass in favor of brighter days ahead.

Don’t Go It Alone

There’s an old Chinese curse that says, “May you live in interesting times.”

At Sales Solve Everything, we’re helping home builders throughout North America weather the “interesting” times we find ourselves in today.?

Smart leaders know it often takes a “fresh eyes” perspective to adapt when the situation changes. If you’d like help implementing your plans for getting through this leg of the building cycle, book a free strategy session with one of our tried-and-tested sales leaders today by calling 1-888-738-4020.?

Or visit SalesSolveEverything to learn more about how we’re helping home builders master whatever challenges the markets throw at us. We’d love to hear from you!

And please, share a comment below to let us and other readers know, what’s working for you in your market right now?