BUILDERS IN THE PHOENIX AREA HAVE AN enviable problem: Business is just too good.
Jon Gillan, vice president of sales at T.W. Lewis, says demand for new homes in the Phoenix market often outstrips supply by a factor of 50 to 1.
So, like many other builders in the Phoenix area, T.W. Lewis started to conduct drawings for its homes. Home buyers would arrive at a specified time, and the salespeople would call out the winners. A problem developed, though, in that for every satisfied buyer, the process created dozens more disgruntled customers. Many buyers had traveled long distances or camped out over night to participate in the drawings.
T.W. Lewis decided to do something to manage demand. The fix comes from a Web-based program from Phoenix software company Inexo that helps T.W. Lewis manage priority drawings for its new homes. A priority drawing is an opportunity for a home buyer to win the ability to purchase a new home.
“Once we realized that there's nothing we can do to meet demand, we decided to create a process that takes the negativity out of the sales office,” Gillan says. “The goal was to reduce the amount of effort by the participants and salespeople that's not realized if they don't win.”
Priority drawings are run every 30 days. Home buyers visit a community one time and register for the drawing. The salesperson then gives the buyers an overview of the homes, communities, and plans and issues them a number that gives them access to the Inexo program. The Inexo application, LotDrawings.com, sits on a server at Inexo. Home buyers access LotDrawings.com from the T.W. Lewis Web site via a Web browser.
The results of a priority drawing are e-mailed to the home buyer as soon as the drawing closes. If the buyer wins, he has 72 hours to decide if he wants to buy. Gillan says builders, T.W. Lewis included, have been known to put the squeeze on buyers, asking them to make a buying decision within five minutes of winning a drawing. The new policy at T.W. Lewis gives buyers a minimum of 72 hours to decide if they want to purchase the new home.
“I can't tell you how much happier the buyers are when they don't feel they are being rushed or feel they have to buy on the spot,” Gillan says.
If a buyer loses, he's asked by the Inexo application if he wants to enter a re-drawing. Buyers reenter by clicking on a link on the Inexo site. Each time a buyer re-enters, his chances go up exponentially. For example, a new buyer who loses would have two chances at a second drawing, four at a third drawing, eight at a fourth drawing, and 16 at a fifth drawing.
At press time, T.W. Lewis had been working with the Inexo system for about 45 days. Gillan says the company's hope is that the software tool will help the company improve customer satisfaction. He adds that extending the selling time to 72 hours also gives T.W. Lewis salespeople more time to match up the customer with the T.W. Lewis profile.
Learn more about markets featured in this article: Phoenix, AZ.