Peter Kowalchuk was ready to tell his story to new-home sales associates when he visited their sales centers. He would have shared with them that he and his wife are empty nesters and wanted a single-floor home. He also planned to tell associates that the couple wouldn’t have to worry about selling their house because his younger brother was moving to town and was buying it from them. Finally, he wanted to let them know he and his wife weren’t working with a real estate agent in their search for a new home.
In any builder’s book, that would make the Kowalchuks ‘A’ prospects: people who were ready, willing, and able to buy.
Yet no one asked him to fill out a registration card, so he never got a follow-up phone call, e-mail, letter, or postcard. Neither did several of his colleagues, who participated in an evaluation of 31 new-home builders and developers at 50 Denver communities and their follow-up communication with prospective buyers.
While following up with prospective buyers is considered a standard--and vital--part of the sales process, only about half the associates asked if they could follow up, 36 percent actually did it, and 14 percent sent any information that was relevant to what the buyers said was important to them.
"We had two situations where we got postcards with no message at all,” says Kowalchuk, who is president of the Englewood, Colo.-based database marketing company Qgenisis. “You would think there should have been something there.”
The findings were released in March as a white paper by Qgenisis and Greenwood Village, Colo.-based Red Tree Marketing Resultants. Response to the report, published last week on BuilderOnline.com and in Denver’s local media, have ranged from acknowledgement of an industry-wide issue to angry rejection of the results.
“The word we got was that (sales associates) were being told in sales meetings, ‘This report is B.S., but it better not be happening in our communities, and if it is, fix it,’” says Brendan Miller, principal at Red Tree Marketing Resultants.
To do so, builders will need to remind their people of the basics. New-home sales educator Myers Barnes says that sales associates aren’t following up with prospects because they’ve never been taught how to do so. After, during the recent boom, buyers lined up around the block to buy homes. “There were plenty of prospects,” Barnes says. “Why would you follow up? You couldn’t follow up.”
Barnes says follow-up contact should take several forms, including a handwritten thank-you, and personalized emails, letters, and phone calls. (Here’s a tip from Barnes: Since many people use caller ID to screen their calls, “you better have a 20- to 30-second advertisement written out” to leave as a message on a prospect’s voice mail.)
Chesna Schaedler, a sales counselor with Farmington Hills, Mich.-based Pinnacle Homes, starts writing the thank-you note as soon as soon as a prospect leaves her office. Then, the frequency of follow-up is determined by the customer’s rating of A (ready, willing, and able to buy), B (ready and willing or able to buy) or C (not ready, willing, or able).
“If you have a lead looking to move in the next month, you’re calling every couple of days,” she says. “If they’re not looking to move for nine months to a year, you might wait a month after the initial thank-you letter.”
Schaedler only stops following up when a customer buys from Pinnacle Homes.
“I even follow up with people who said they were going to buy with someone else,” she says. “Who knows? Maybe they haven’t closed yet.”
Grading prospects is an essential step that many builders don’t take, Miller says. “I’ve seen as many as 800 or 900 leads in one salesperson’s lead bank,” he says. “How can a salesperson know what to do with them?”
In today’s market, he recommends that anyone who visits a sales center be considered an ‘A’ prospect, and should get a phone call, an e-mail, and “some type of direct mail,” followed by as many as half-dozen follow-up contacts within 30 to 45 days. “If they don’t respond, they go into the ‘B’ lead (category),” Miller says.
Atlanta-based Monte Hewett Homes uses just about every follow-up strategy in the book, says Dina Gundersen, the builder’s director of marketing. Strategies include thank-you notes, individualized emails, e-flyers, and a new customer relationship management (CRM) system to track leads. She’s also re-introduced the phone-a-thon, an evening for sales associates to gather and make follow-up calls. Known as “Ring the Bell for Sales,” the event offers sales associates $50 for every appointment they set. That was extended to the sales office as well, with the cash awarded at the weekly sales meeting.
“It’s getting back to the tried-and-true,” Gundersen says. “It can’t hurt.”
Accountability also helps. Valerie Saunders, East Coast sales director for Melbourne, Fla.-based Holiday Builders, requires her sales associates to obtain detailed information about each prospect and enter it into a CRM system. She also does random spot checks during sales center visits.
“I pull a name out of the database and ask the salesperson to pull the forms on that customer,” she says. “They never know who I’m going to ask. This enables me to see the degree of performance, see what’s working and what’s not, and see who’s working and who’s not. I also give them some ideas on how to ask for the sale and write the agreement. It’s all done on a positive note.”
She uses quarterly mystery shoppers to ensure that the information is being entered into the system for every customer and that the required follow-ups--at minimum, a handwritten thank-you note and a phone call within 72 hours--are completed. “If I get a good review from the shopper but they’re not in the database,” she says, “the salesperson didn’t follow up.”
Pat Curry is senior editor for sales and marketing at BUILDER magazine.
Learn more about markets featured in this article: Denver, CO.