While on vacation in 2019, I couldn’t get the work portion of my brain to shut off. Things were changing, and change creates new puzzles and opportunities for my mind to work through—even while on vacation.
There were several on-demand access tools (UTour, NterNow, etc.) that had been released that gave consumers the opportunity to verify their identity and submit that information to builders in exchange for temporary, secure access to an inventory home or model. While everyone else began to argue about whether furniture and appliances would be stolen or if those on tour would become squatters, to me it felt like something bigger had been unlocked.
Providing on-demand access to homes solved a staffing problem for builders. It expanded the hours homes could be toured without increasing the size of the sales team, and it made life more convenient for all parties involved. However, there was one unsolved challenge: What if the customer desired the help of a salesperson during their on-demand tour? Perhaps the customer wanted to proceed with purchasing the home (remember buying online was not yet a scalable solution)—how could builders easily address this opportunity? Once I started thinking about on-demand tours as simply another kind of appointment, things began to fall into place.
The Puzzle Pieces All (Finally) Fit
Consider the individual components of the current sales and marketing efforts of many builders today along with when they were roughly first introduced: websites (late ’90s); on-demand access to homes (2018); online design tools/interactive apps (2015); online sales (2005); and on-site sales and open houses (dawn of time).
The emergence of online sales teams allowed builders to convert browsers to buyers by scheduling appointments for the on-site team (over 70% of the sales at my home building firm came from set appointments from online sales in 2012). The weak point was walk-in traffic. Even in 2023, if you ask the owner of a home building company if walk-in traffic and the resulting appointments are accurately tracked, they will likely tell you, “No.” On-demand access technology solves this by converting unregistered walk-in traffic into a scheduled appointment to visit one of your homes.
Our industry learned what I call a “pandemic truth” from 2020–21: Sales is a function of appointments, not walk-in traffic. (I classify an appointment as a conversation around pricing and selections that lasts 15 minutes or more.) Sure, at times walk-in traffic turns into an appointment, but data shows that happens less than 20% of the time. It’s still a good idea to have open house hours where those who aren’t ready to set an appointment can experience your homes and communities, but that no longer needs to be daily.
Now that over 95% of appointments will come from a scheduled event (online or on-demand), this unlocks the true opportunity for the uberization of our industry. We need to make sure when a customer wants to interact with a sales professional that they’re able to do so. This year, we finally have all the pieces we need to make this happen at scale.
Uberization: A Win-Win-Win
This approach should be a win for all three parties involved. The customer gets more choice, convenience, and a higher level of service; the sales team spends more time interacting with high-intent customers who already have verified contact info in the CRM; and the builder enjoys lower overall costs over time and an increase in customer experience.
I believe pod-based selling will play a key role in directing appointments to the right salesperson. In this model, salespeople serve multiple communities by appointment from a central location and—similar to Uber drivers—can turn their availability on or off. This allows salespeople to have more control over their schedules rather than requiring that everyone has the same broad availability.
Uber drivers are rated by their riders. Salespeople will be rated by customers, but also by the builder who will study their conversion rates on appointments with different buyer profiles. This combined rating may serve to prioritize some salespeople over others when both are available in order to maximize sales opportunities.
There are certainly savings to be had shifting to this model—about $1.2 million a year if you have around 20 communities to sell. However, if you approach this with the priority being to save costs, you will cause unnecessary harm to your organization.
While helping a builder partner interview for an open sales position, I spoke with a candidate who had experience with a version of this setup. She did not work out of a model, but instead drove to meet customers at inventory homes in multiple communities. The problem was that her builder was clearly stretching the model to try to save money; the employee was being asked to cover a two-hour geographic radius. This left the employee burnt out and also would have resulted in poor response times or meeting times for the customers. The size of any given sales pod ideally shouldn’t be more than a 15- to 30-minute radius.
The necessary pieces to create real innovation in how new homes are sold are in front of us, but it will require several roles to shift, and a few new ones to be created. Online sales may need to evolve beyond a fast initial response and making a connection with the customer to a blurred line with on-site or hybrid sales.
With an increased volume of sales for each traditional salesperson, a post-purchase concierge team will be necessary to guide the customer up to and through closing. This position can be a well-compensated salaried one funded through savings created by this new structure. This direct human connection after the sale creates opportunities to improve the customer experience, which often drops off quickly after the contract is signed.
A Necessary Evolution
The potential benefits of the uberization of new-home sales are clear. By offering more flexibility in the home shopping process and providing great customer service, you will not only satisfy your buyers, but also keep your salespeople engaged and focused on what they do best: building relationships with qualified, motivated buyers.
While there may be an initial investment in technology, this shift could ultimately lead to lower sales and marketing expenses. This change in strategies prepares your business for potential market-changing events in the future. It can scale up quickly when the market improves, and it could be the difference-maker in stealing market share during tough times.