Sustainable Land Development Today - June 2008 - (Page 34)

BUSINESS MANAGEMENT Despite Housing Crunch, Some Builders Ignore Prospective Buyers Denver-area study reveals builders spend millions to attract prospects then fail to follow up. By Marc Lumpkin Housing developers are spending millions of dollars in advertising. The result? They end up ignoring the prospective homebuyers that walk in the door. That is the finding of a recent study conducted by Denver marketing services companies Red Tree Marketing Resultants and Qgenysis, Inc. In a self-funded survey, they sent secret shoppers to visit 50 new-home sales centers representing 31 builders in the greater-Denver area, which currently ranks among the ten worst U.S. markets for home sales. “What we found shocked us,” said Peter Kowalchuk, president of Qgenisys. “With falling home sales and a nationwide decline in new home prices amidst high inventories, we thought home builders would become more aggressive marketers. However, we found that builders are failing to take the simple steps necessary to follow up with prospects, even after identifying themselves as qualified buyers ready to purchase a home.” Kowalchuk was one of the prospective home shoppers who visited sales offices and toured model homes. He found that often no one was home. And when a salesperson was present, they were either on the phone, talking with a coworker or only said “Hi.” Elsewhere, Kowalchuk was greeted by someone who explained that they were just a temp. He was told, “Feel free to walk around and someone will get back to you.” “But they didn’t,” Kowalchuk said. “One woman told me she wanted to follow up with me, but she never took down my contact information.” The secret shoppers explained up front that they were qualified and ready to purchase a house. This should have attracted sales agents like bees on honey. The survey yielded some frightening results, said Red Tree Marketing Resultants co-founder Bob Mazerov, whose firm originated the idea behind the study. I 16% of the shoppers (one in 7) were According to Bob Mazerov (left) and Brendan Miller of Denver’s Red Tree Marketing Resultants, their 18-page survey reveals that Colorado home builders are losing millions on their advertising investments and in lost sales. “Essentially, the builders are diminishing the number of qualified leads and reducing their ability to close a sale. This is certainly not an ideal process given the current state of the housing market,” says Mazerov. not greeted when they walked into the model home sales center. “Some agents would look up and say ‘Hi.’ Most didn’t offer any greeting at all nor did they introduce themselves. In some cases, they didn’t even speak to us,” Mazerov said. I Only 56% of the agents requested a registration card and permission to follow up with the prospective buyer. “That means only about half the customers were sought for follow up, a dismal number when the goal is to sell homes to every prospect,” Mazerov explained. I Only 36% of the visits resulted in an agent actually following up. “That’s right, only one in three qualified buyers were contacted after the initial visit,” reports Mazerov. “That leaves two thirds who were never invited back for the opportunity to buy.” I Agents followed up with relevant in- formation for prospects only 14% of the time. Mazerov explains, “If I came in and said, ‘I’m looking for a ranch-style home,’ we analyzed whether the agent followed up with relevant information about ranch plans rather than an email about the builder’s warranty or upcoming sale. Our survey shows only one in seven times did somebody follow up with relevant information. In some cases they sent us nothing but a postcard of the development.” Most of the follow-up collateral sent to the potential buyers was done via direct mail with some emails and even fewer phone calls. Another surprising gem uncovered by the study: spam filters. “Almost two thirds of the follow up emails went into some kind of junk mail because they weren’t personalized,” said Mazerov. “If the email was restricted to something like: ‘Thank you for seeing our homes,’ spam filters catch it and throw it into a junk mail folder. Personalizing an email by a qualified sales agent takes only a few minutes.” So with the current, home-building market competing for fewer qualified home buyers, why aren’t builders beefing up their sales force? Mazerov said that researchers talked with companies who maintained that they intended to increase sales training, but their observations led those involved in the study to believe otherwise. “They’ve already had sales training, so I don’t think that’s really the answer. I think that the culture of an organization enforces how well its programs and processes are going to be embraced,” Mazerov said. Another issue is that marketing professionals for the industry need to craft messages that work to get people in the door. “The next part of this chain is that we need to ensure that the sales force has the 34 June 2008 Sustainable Land Development Today

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Sustainable Land Development Today - June 2008 Contents Our Voice Editorial Board SLDT Resources Where Rubber Meets the Road Integrated Planning: The Key To Developing Sustainable Planned Communities Win-Win For College and Community Industry Spotlight: Transoft Unique Organization, Unique Opportunity New Preferred Provider Comments from the Austin Conference Welcome New Members New Knowledge Project Articles Books Going Green Business Management Risk Management Surveying and Mapping Industry News Products/Services Showcase Advertiser Index Classifieds The Last Word

Sustainable Land Development Today - June 2008

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