What do a 60-year-old sales journeyman and a 22-year-old former aspiring elementary school teacher have in common? Call it confidence. Or maybe, in a less generous instant, it might be described as mulish optimism. Whichever you choose, management at Engle Homes, the Phoenix brand of parent company Technical Olympic USA, has taken a shine to the traits that veteran smoothie Bob Blanchard and winsome neophyte Sherry Leonhard share. The reason? These two have the unshaken nerve to believe that they can answer three three-word questions without blinking: "Why buy new? Why buy now? Why buy Engle?"
If Engle Homes could bottle that, they would, and who can blame them? The spring 2007 selling season is upon us.
Despite their varied backgrounds and levels of experience, no assumptions were made with the newly anointed team.
In round figures, as much as 60 percent of the year's sales should take place starting the weekend after the Super Bowl and running through May. Roughly, that means the 200 biggest builders will need to sell new homes at a rate of nearly 1,600 a day if they're to maintain their 35 percent of the new-home economy and burn through a good portion of the nation's swollen standing inventory. By May, when final tallies are taken, the success or failure rates of the likes of Blanchard and Leonhard will tell whether 2007 gets chalked up as a year that "comped" with respectability or ignominy versus 2006–the year all would like to forget.
Blanchard and Leonhard both came to Phoenix from out of state. Blanchard is a career salesman; Leonhard, a career starter who thought until recently that she wanted to teach 7- and 8-year-old elementary school children. Similarities, differences, they're all moot. Their shared rule now comes straight out of Alec Baldwin's mouth in the movie Glengarry Glen Ross: "Always be closing."
If normal rules of engagement applied, Blanchard might feel a bit out of place as a new hire at Engle Homes in Phoenix. But he doesn't feel the slightest bit out of his element. To him, selling the area's far northwest master planned community of Vistancia is only a pragmatic challenge. "Being so far out, we need to drive more traffic. All the sales in our backlog are from people within a 15-mile radius." He's also realistic enough to understand that in current conditions, he's taking a pay cut. "The reality is that I only expect to see $2,000 or $3,000 a month for the next six months." And for all his selling experience and instinct, he's grateful for the intensive six-day sales training program Engle developed to "load the toolbox" of every new sales associate. "It has made me comfortable with all the required parts of this job so I can spend more time being clever with ways to win the sale."
Many builders might assume that providing developed home sites, compelling floor plans, community amenities, marketing support, and model homes would be enough support for any "good" salesperson. After all, an industrious nature is a critical personality trait for the job, and the lure of commission serves as a motivator, right?
In days gone by, maybe. In today's unforgiving environment, not so much.
Phoenix reigned as the country's fastest growing market, generating nearly 62,000 new-home sales in 2004. Compare that to 2006 total new-home sales of 42,313, a 32 percent decrease. Today, its bottom remains elusive amid murky waters Even more ominous is a projection from Hanley Wood Market Intelligence, suggesting that, in 2007, Phoenix may not see more than 40,000 sales in total.
In 2006, Engle captured nearly 4 percent of the market share in Phoenix across all product types. More critical, roughly one in four of parent company TOUSA's 2006 total deliveries (nearly 7,800 according to estimates in a UBS report) came from the Phoenix market. To take the math a step further, the spring 2007 selling season means that TOUSA's Phoenix division will have to sell at a rate of 15 homes a day just to comp flat with 2006.
So, Engle Homes is leaving as little as possible to chance. For six days starting Jan. 15 and Jan. 23, Karen Murray, vice president of sales and marketing, guided eight new-sales hires through a sales immersion program.
Blanchard and Leonhard's classmates include a 66-year-old man experienced in real estate sales (but never new construction) and a recent college graduate who spent time as both a legal assistant and a bartender.
Role-playing, interactive discussions, games, and even hard-core "assignments" form the structure of the sessions, complete with a 6-inch binder stock full of materials destined to become their Bible. Tom McAndrew, Engle's vice president of operations, asserts to the group during a candid discussion about the company's culture, "If you have a question, and we haven't trained you to have the answer, that's our issue."
Lucky for TOUSA in the critical period ahead, Engle's Phoenix division has served as a company poster child for best sales training practice. Murray started the program when she joined the organization 10 years ago, and she's refined through various cycles, although none so dramatic as the current one.
"We were growing so quickly that the sales managers were split," says Murray of the program's implementation. "They didn't have the time for an orientation. We decided this was a way to deliver the information that was critical." It began as a two-day program when the company was only interested in hiring cream-of-the-crop, experienced new-home salespeople. But, over time changes in the market have forced the company to shift gears.
Learn more about markets featured in this article: Phoenix, AZ.