By Judith Stock. The process that new home buyers go through to select options and upgrades has evolved over years of practice. Obstacles have been knocked down and the road leveled with more efficient delivery mechanisms.
Builders agree the design center is now a substantial revenue generator. "So far this year, 30 percent of our profit comes from our design centers," says John Rymer, vice president of sales and marketing, Morrison Homes in Atlanta. "The easier we make it, the more options and upgrades our home buyers purchase." What builders disagree on is whether to staff design centers with salespeople or design consultants.
Sales Staff or Design Consultants: Which Way to Go?
"In our Orange County [Calif.] marketplace, home buyers expect the services of a professional design staff," says Michael Brown, vice president of mortgage and design center operations, John Laing Homes. "The variety, complexity, and product costs available today call for high levels of expertise to ensure desired results are achieved within established budgets."
The Newport Beach, Calif.-based builder goes outside the company for much of that expertise: For instance, it partners with Leonard's Carpet Service to staff and operate its Irvine, Calif., design center. It was through trial and error that John Laing learned that designers' talents are better applied to designing while salespeople's expertise is best used selling homes. "It is a complex process to sell a home, to cover all the new-home buyer's questions," Brown says. "When we left all electrical options — like video, security, entertainment packages, and electrical mechanisms behind the drywall — at the sales office, they weren't explained and the buyers' needs weren't serviced." Now that those options are handled at the design center, half the customers are purchasing audio upgrades, Brown says.
Morrison Homes staffs its larger design centers with administrative personnel and selection staff. Consultants who handle both positions staff smaller centers. "We no longer have our sales staff sell options and upgrades," says Rymer. "Selling homes is a full-time job."
Weighing in on the other end of the question about who is best suited to sell options and upgrades is Linda Sargent, director of Centex Homes' sales, marketing, and design center in Raleigh, N.C. She says, "We don't use designers to sell options and upgrades and do very well. What we've found is, if a customer is seriously decorating their home, they've hired their own interior designer already." The Raleigh-Durham division sold 665 new homes last year; its average for upgrades is about 12 percent of sales price.
"We think of the sales office as a retail center," explains Sargent. "We are there to make sales, and the design center is there to help the customers personalize and customize their homes."
Builders who want to put more on the bottom line from options have many choices themselves. They can notch up their salespeople's awareness of options; they can bring in design specialists; they can focus training efforts on sales skills or the latest and greatest in upgrades; they can pay their design center employees salary plus commission or straight commission. Whatever route builders choose, options present them with the opportunity to add dollars to the right side of the ledger.
|Training the Selection Staff|
Judith Stock is based in Granada Hills, Calif.
Published in BIG BUILDER Magzine, August 2002