Two momentous and significant events have irreversibly changed the face of selling homes over the past few years. First the internet revolution and now the credit crunch. This paper outlines how these events have impacted the culture and processes needed for the successful sale of new homes.

The Internet Revolution

Over 80% of new homebuyers now commence their search for new homes on the internet. The proliferation of property web sites has ensured that house buyers can gain near perfect knowledge of homes for sale in any given location. More recently sites such as Globrix, which works like Google, trawl the web for homes for sale and allow housebuilders to list all their available units at no cost, assuming that your website has enough detail and is up to date. With other websites providing recent ‘sold’ prices this means that homebuyers now have access to extensive and almost perfect market knowledge, which until recently was restricted to agents and property professionals. Moreover all this information is available in simple map-based or satellite views which can make computer based research more valuable and revealing than physically visiting a location during the early stages of house purchase.

Homebuyers are therefore used to being able to find extensive and in-depth information online and without this they are unlikely to include a property on their shortlist. The results of this research also mean that their shortlists are shorter and each property will be well qualified before they decide to visit or make an appointment.

It is therefore essential that housebuilders websites are kept up to date in order to get onto a prospects shortlist. Many housebuilders do show current plot availability and prices on their website but many do not which could mean they are missing out on valuable enquiries.

The next stage is to make it easy to log an enquiry on-line; gaining enough information to qualify a lead without making the process onerous and putting off prospective purchasers. Having received the enquiry the most important processes to consider are your response mechanisms. In today’s 24/7 internet world a response within 24 hours is expected, much longer than this and you will fail to impress with your first communication while a competitor has most likely stolen a march with their prompt reply.

Your initial response could be via ‘phone, email or post, However an automated email, followed up quickly with a personal response, will not only give the buyer confidence that their enquiry is logged but also provide an opportunity to set their expectation of how and when you will follow up their enquiry.

To be able to respond to electronic enquiries effectively there are two requisites; firstly that you have a central database to record enquiries and follow-up actions and secondly; that your sales negotiators have access to it from the showhome, and to email to communicate with prospects in their medium of choice. If you haven’t already made substantial changes to your lead management processes, staff culture and response mechanisms then you are unlikely to be maximising your opportunities with the internet savvy housebuyer.

The argument for an integrated system for managing your web leads is compelling. 80% of customers that now walk into your showhome have done their research and are likely to be your best qualified leads. These customers should be recognised as being more highly qualified than a traditional walk in lead. If prospects have registered on-line then your sales negotiators should have instant access to this data and treat the first visit to your showhome like a ‘second visit’, with the opportunity to move towards a sale much more quickly. By importing web leads directly into a database 50% or more of your data entry is undertaken by your prospects, who in turn get a faster and more relevant response, which is then most likely to capture their interest.

Of course the same principles should be applied after the sale is complete. To ensure that each customer has the best home ownership experience it is vital to have the relevant information available whenever they contact your company. This will allow you to provide the level of customer recognition and service expected by today’s sophisticated homebuyer.

The Credit Crunch

The recent downturn in house sales will also have a lasting impact on how new homes are sold. It is unlikely that we will return to the excess of demand over supply which has shaped the selling practices of the property market in recent years. If you have failed to react fully to the impact of the Internet revolution then the credit crunch really will be your wake-up call. Anyone who has spent most of their time selling new homes in the past ten years will need to significantly change their culture and working practices if they are to succeed from here on.

There are very few industries selling to consumers that have had the benefits of such restricted supply, strong demand and rising prices that housebuilders have. The uniqueness of each location also often insulates many developers from true competition. In many cases all that has been necessary is to open a showhome, place a few advertisements in the local paper and wait for the prospects to turn up. However it is when leads are in short supply that real sales and marketing skills come into their own. Most other industries have long recognised the benefits to be gained from a database that holds profiles of their customers and prospects and provides a detailed insight into when and what their next purchase may be.

Take the car industry; increasingly technology, legislation and modern manufacturing techniques have eroded the differences between their products in any given sector. Yet the premium brands have all successfully carved their niche and improved their market share over recent years. The car companies maintain accurate profiles of all their purchasers and use these to maintain contact with each customer while increasing loyalty, referrals and repeat business. Ask any housebuilder to produce a list of purchasers together with any lifestyle or profiling information and few would be able to. Yet for most homebuyers the purchase of each new home is associated with key milestones or aspirations in their lives.

The English Home Survey recently reported that 53% of home moves were aspirational rather than ‘needs based’. In a buyers market housebuilders will need to use more sophisticated marketing techniques with targeted campaigns using postcode analysis and other profiling techniques.  By introducing regular customer communications you can learn when and why your purchasers will next move house and put yourself in the best position to be the preferred builder of their next home.

Pro-active marketing to individuals based on your understanding of their needs will provide you with more high quality premium leads than traditional broad brush campaigns. This really is the time for housebuilders use database technologies to allow one-to-one marketing while maintaining the efficiencies of their traditional mass marketing techniques.

Summary

Maximising sales is clearly one of the big issues of the moment and while many of the factors affecting sales may be out of your control every housebuilder needs to be sure they are maximising their market share in a difficult market. Good visibility of campaign effectiveness, sales prospects, lead conversions, customer profiles and competitors will enable you to take faster and more effective actions to secure the maximum number of new home sales. It is also critical that this information is available where it is needed be that at Head Office, a region, a showhome, via your website or for an agent. Customer profiles held in a central database are more easily analysed for better targeting of promotional activity and to identify current customer demands. With longer sales cycles you need the very best lead tracking system to ensure that no sales opportunity is lost. Web technology has ensured that a high proportion of customers now commence their new home searches on-line where they expect up-to-date information and a fast response to any enquiry. Only by providing your sales staff with similar tools and technology in the showhome can you offer an appropriate and timely follow up to these enquiries; and if you can’t one of your competitors may be able to.

 

This is the second in an occasional series of white papers designed to highlight how modern IT systems can support housebuilding businesses in a challenging market. The papers will particularly focus on areas where a well chosen system can enhance business opportunities and efficiency both during the downturn and in readiness for market recovery.

Malcolm Freeman has been involved in the development and supply of housebuilding software solutions for over 23 years. During this time he has seen many changes in the requirements of housebuilders for IT systems; from increasingly sophisticated budgeting and forecasting requirements through to the impact of the internet on homebuyer’s property search and increased expectations for customer care.