Referrals are the Name of the Game

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washing_head_in_shower_800_clr_6369Remember the old Heather Locklear commercial where she is promoting a shampoo and says she told two friends who told two friends who told two friends and so on? It was a great ad campaign enlisting word-of-mouth referrals to grab their share of the shampoo market.

Word-of-mouth referrals. That is what you want to build your business. Don’t know about you, but I only give referrals on products I REALLY like.

If your company enjoys a sound reputation for delivering what it promises and that reputation is built on substance and not on sand, referrals and a healthy business climate will follow. You can never compromise on doing what is right. If something or someone in the organization has goofed, make it right with the buyer. Don’t fudge. Word travels fast, especially in small areas or small big cities.

A prominent builder cancelled his heavy advertising campaign. Why? Thirty percent of his sales were referrals from previous buyers and twenty percent was internet-driven. You have a gold mine of leads lying in your own backyard if these customers are well-sold and happy. Be kind to their children. Pat their dogs. Compliment them on their landscaping. Report all gripes to the customer service department. Then, having established yourself as that “nice Mr. Jones who did so much for us,” ask them for names, addresses, and phone numbers of anyone that might be interested in a new home.

Perhaps the most unrequited love in new home marketing today is the referral sale. Builders covet them, court them, but very few can consistently count them as their own. Referrals can and should reflect up to one-third of the building firm’s total volume.

But, there are no referrals without quality delivery. Be definition, quality delivery is the synergy of construction, service, and sales working in concert to deliver a highly satisfied buyer plus the dividend of the referral sale.

To build your referral base:

  1. Contact every relative, friend, prospect, unclosed buyer, unclosed customer, and resident owner you can.
  2. Call people who have been out but not bought. Your company spends a considerable amount of money to promote buyers into the model park. It is important that you make the best use of this traffic by having each prospect fill out a visitor’s sheet before leaving.

Just like any other aspect of your business, referral gathering takes a plan, takes effort, and takes discipline. Make this promise:

I know that I have to ask to get referrals, so I will put myself in the position to ask a minimum of ten times from contract writing to one year after move-in. I will see or call five homeowners each week to solicit referrals.

Referrals are the backbone of the professional new home counsellor. While most building firms realize 8% or less referral sales, the sales pro works to realize one-third or more via favorable word-of-mouth.


Quality + Concern & Kindness = Referrals


Raising Prices Can Increase Sales

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When people don’t know the real value of something, they often use price as a quality indicator. You’ve heard the expression that if it costs too little, then it is valued too little. Counselors in the mental health field will tell that unless an investment is made by the one seeking counseling, then the counselee will not be as engaged in the process. Price does matter.

Yes, we all want a great deal, but if you engage too much in the deal, then the quality of your product disappears. Everyone knows that you get what you pay for. You might have a top quality product, but if it is priced too low, then it will be seen as inferior. I for one am willing to pay more money for better quality.

Therefore, HOLD THE LINE ON YOUR PRICING. You may even want to raise your prices. Prove the added value in your homes. If you prove the value, then there is no need to discount. The key to selling in today’s market is differentiation. The salesperson who gives away profit too early an too often is cheapening your product and doing a grave disservice to the company.

You must stem the tide of discounting and deal mongering by training how to sell the base of value and lifestyle, then the focus changes from seeking a deal to the emotional experience. Here are a few methods to neutralize negotiation and appeal to the emotions.

  1. Adding value is better than cutting price. Builders who sell with promotions that add value can persuade buyers to purchase from them because the residual value is higher than the competition’s.
  2. What would you like for us to take out? Once buyers see the value of those extra dollars and what they bring to the home, they are not going to want you to take it out just in order to meet their price demands.
  3. We are a true-value-for-true-price builder. We don’t mark our homes up just so we can mark them down. Sell yhour builder’s integrity and your home’s quality.
  4. The ‘deal’ is in the price. Let them know that your builder has factored into the published price all the deal and discounts just to provide a hassle-free home buying experience.
  5. Let’s look at the four types of housing products: 1) highest price and highest product; 2) higher price, lower product; 3) lower price, higher product; and 4) lowest price, lowest product. Since we are in the highest price, highest product category, we simply can’t go to a lower price. We refuse to build a home in the lowest price and lowest product category. We believe in quality.

So, vow now that you are not going to give in to the call to discount your product. It is only when bulders refuse to discount and sales people sell value that housing will truly be on the road to greatness again.

“Anything that just costs money is cheap.” ~John Steinbeck