Tips for selling more homes

[Carl Davidson]

For those of you who want to discuss selling more, I am attching an article I wrote recently. Let's talk about selling technques and see if we can make more money.

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By: Carl Davidson
4/22/2002

This week, I was working with a client who wanted to improve his dealership and his profitability. I realized as we talked, that his problem as one of confidence in himself and confidence in the industry. He was trying to make a living at the bottom of the barrel. Here are some thoughts and that will show you if you are trying to make a living from the scraps of the table of life and some ideas on getting your share of the bigger pie.

You may be living off the bottom of the barrel if you hear yourself thinking any of the following:

I Just Keep Attracting Bad Credit Risks
Some dealers just cannot finance the people they sell. That¡¦s because they are attracting poor credit risks. How? If you advertise low down payments, low payments etc you will attract people with low incomes and little top put down. Why not go after the people who have good credit? How do you find them? Some dealers display at bridal shows ¡V after all, many new couples will be buying a home. Some, advertising in the same places realtors advertise stick built homes.

One dealer I know has his sales team knock on the door of every home in his area with a For Sale Sign out front. The salesperson asks where the couple is moving and asks if they have considered a manufactured or modular home. If the couple says, ¡§no¡¨ the salesperson asks. ¡§If you could save 30% on the cost of your new home, would you give me 10 minutes to show you one?¡¨ This technique fills there store with prospects who can be financed. Best of all, it doesn¡¦t cost a cent in advertising and uses his sales team¡¦s down time.

Another dealer I know sends out 500 post cards to neighbors of every house he sets, advertising an ¡§open house¡¨ after the house is set and before the buyer moves in. He gets 30 or 40 couples who would never ordinarily see a manufactured home to come by and take a look. Do they all buy one? No. However, statistics show they will be moving within 3 years and will tell 16 others that manufactured and modular homes are a great value. This is great advertising for the cost of 500 post cards.

The fact is that you can attract credit worthy buyers, but attract is the key word. They are not going to pull up to your store and ask.

You Just Can¡¦t Get Good People Anymore
Great dealers can attract great salespeople! The quality of your staff will partially determine not just your sales, but the quality of your buyers. To recruit a great sales team, you need excitement, effort and high standards.

Excitement
One reason many dealers have trouble attracting great salespeople is they are just not excited about their company. They assume that only people with a problem would work for them. Maybe it¡¦s a self image thing. For example, one company I know with a great location, great brands and great marketing has 3 salespeople. One is a disgruntled family member with a bad attitude, one is an older gentleman who is there as a retirement hobby and one is a salesperson who lost his license due to DUI, is in a messy divorce and lives in a relative¡¦s basement. Is that really the best he can do in salespeople? By accepting this collection of low grade staff, he prevents himself from hiring better salespeople. Worst of all, who will this type of sales staff sell most? Other people with poor credit and low ambition.

You need to be excited about your company. You need to recruit sales staff who can relate to and sell people with good credit and people who now buy stick built homes. You need to hire and keep only winners if you wish to attract winners.
Effort
It is a full time job to recruit and train the best. If you just throw an ad in the paper when you get so understaffed you can¡¦t stand it, you will never be successful. Recruiting means constantly networking with winners who sell. Evaluate you efforts and see if you could be doing more to recruit the very best.

Minimum Standards
To be successful and hire the best, you need to have minimum standards to join and minimum standards to stay. Our experience indicates you should require at least the following to consider hiring a person:
Home Owner
Home owner tend to be more stable. They tend to need to make more money and after all, we do sell homes. How can anyone sell one who hasn¡¦t bothered to buy one?
Stable Relationship
People who are married or in a long term relationship tend to sell more and be more stable. People in divorces are too distracted to sell.
Good Past Record With Creditor and The Law
Do a credit check and a criminal record check. People who have been fair in the past with creditors and the law will tend to be fair with you and your customers.
Active In The Community
People who are active in the community are connected and are outgoing. They have a stake in the community and want to stay and succeed in the community.

Turn Your Company Into A Full Service Establishment
Many dealers who feed off the bottom only sell homes. The better customers want better service and you can give it to them and make money from giving it. Every year, about 20% of the people who come to your store say, ¡§We can¡¦t buy it now, we have to sell our home first.¡¨ Most dealers ask those customers to leave and only return when their home is sold.

What if your salespeople got their real estate license and were active with a local real estate broker. They could say to that couple, ¡§Good you came in today. I am a licensed realtor. Let¡¦s list your home for sale here and then pick out your dream home.¡¨ Not only does the salesperson get a committed shopper, he/she gets to list the family¡¦s home.

Another 20% of the people who come in say, ¡§We can¡¦t buy now, we don¡¦t have our land yet.¡¨ Once again, an average salesperson asks them to leave and return when they have the land. If your staff were licensed realtors, they could look up lots on the MLS computer and sell the land and home together.

Another 20% say, ¡§We can¡¦t buy yet, we don¡¦t have our financing.¡¨ If a member of your staff was a licensed mortgage broker and a licensed insurance agent, you could make money and eliminate those objections too.

That is just a partial list of things you could do to sell more and generate more income.

Get Stick Built Leads
Some dealers think the stick built community doesn¡¦t like us, but the truth is they don¡¦t know us! When they know you, you can get leads and sales from them. Every builder and realtor in your area gets hundreds of leads who want a new home but do not like or cannot afford the homes they are shown. Right now, they throw away those leads. If you could convince them to give them to you, you would have a steady stream of leads that you know are financable. One dealer recently brought me to his town to do a free seminar for realtors. He invited realtors to a free one day sales seminar. He paid for lunch and we spent a big part of the day showing realtors how great the homes were and how they could benefit from giving us leads when they are done with them. Think of all the people connected with stick built homes and you will be amazed at the business you could generate if you think of yourself as a builder/dealer.

I think that our very success in this industry has been our weakness. For so long, we could make a great living just sitting in our office waiting for the next buyer to come in that it became a habit. You can add a huge amount to your business if you upgrade your sales team, your display and your services to the quality people expect from the stick built industry. According to the US census, 875,000 homes we sold in February 2002! You¡¦ll be eating a lot better if you get your share of that market.

CARL DAVIDSON is the president of Sales & Management Solutions. More than 7,000 companies in 7 countries use his video sales & management training cassettes. He also performs live as a speaker/entertainer and seminar leader. For more information, call 800-941-0068 or visit www.carldavidson.com .

[Toby Hise]

I enjoyed your article. All that you have suggested makes sense. In today's market we must all look for innovative marketing strategies.

There is one thing that I would like to add in the area of recruitment. There is no question that attracting quality personnel is of utmost importance. However, attracting good people is a two way street. The dealer must have something to offer that is very attractive to the quality person being sought after.
1. A very good pay and commission structure.
2. Good benefits. Most dealers do not offer a good benefit package.

Can the retail segment of the manufacture housing industry attract students as they graduate from college? It would seem that this would be a logical recruitment arena to satisfy the search for quality people. Not going to happen in any large degree. Again, it comes to "what do you have to offer me?"

The question of good character in a sales person is another very important factor. After all, there are enough dealers with unethical business practices. No need to compound the problem by hiring someone with questionable credit. Especially when it comes to finance. Little things like short down payments, bogus verification of income and employment, just to mention a few. Repos Repos. Buy backs, buy backs, buy backs. This industry has been plagued with these realities over the past several years. It is no wonder many of the major lenders have pulled out. The industry gave them a very good education in manufactured housing business ethics. Of course most owners are unaware of all the unethical business tactics of thier sales force.

Now don't get me wrong. There are many good, honest dealers (who struggle with finding quality sales people, and who are need of innovative marketing). Today, these dealers are paying the price for all the bad apples. (More than one bad apple in the barrel, by the way) The cleansing process is not quite over, although by year end it should be.

The key word is professionalism---from top to bottom.

[rmurray]

You make a good point about compensation package....In todays market...with almost all mortgage finance....smarter customers..the search for better customers..the long desicion prosess of customers...

The old draw systems make is very hard to hire quality help...It take fully 6 months or more for a new hire to achieve any real activity...By this time...they are so far behind the draw that most give up...There are a few plans with a low salary...PH comes to mind...They pay a salary of $ 300 per week plus a commission...This helps....but which fresh college graduate can live 6 mnoths on $ 300/wk....Not many..

[Carl Davidson]

I want to emphasize again that this forum is to be used for discussing sales and management techniques. I also want to disagree on the amount of time it takes to be productive. We belive that salespeople should be selling within 2 weeks. During that time, an average dealer will entrust them with about 20 families and they should have brought in about 10 by prospecting. If a new recruit cannot (with help from the dealer) close one or 2 out of 30, they are never going to be successful and should find work in another field.

In our training, we suggest paying a salary (plus commission on sales) for each time a home is shown. That way, those who dig up business will be paid more and those who wait by the door will be paid less.

[Mike]

Have you considered offering a No Down Payment solution to buyers? I know an organization that provides this kind of assistance to buyers.
www.homequestdownpayment.org

[Matt Johnson]

I AM A SERVICE CONTRACT REP. THAT HAS A SIMULAR CONTRACT THAT WE HAVE ALL SEEN BEFORE BUT I PUT A NEW COVER ON AN OLD BOOK AND CAN INCREASE PROFIT ON THE HOME, INCREASE PROFIT IN THE SERVICE & PARTS DEPARTMENT AND SELL YOU MORE HOMES WITH A QUALITY PRODUCT AND YOU CAN RETIAN COMPLETE CONTROL OF YOUR CUSTOMER WHEN THE ARE READY TO TRADE OR PURCHASE AGAIN
EX: ON A 100 HOMES A YEAR I INCREASED A DEALERS PROFIT APPROX. $50,000 A YEAR MY SERVICES ARE NOT ONLY IN THE SERVICE CONTRACT BUSINESS I ALSO DO TRAINING (AT NO CHARGE) FOR MY DEALERS IT IS LIKE HIRING ANOTHER EMPLOYEE AT NO COST TO THE DEALER AND I HAVE A WEALTH OF INFO FROM OTHER MARKETS SUCH AS ( AUTO, MARINE, RV) THAT I CAN SHOW YOU WHAT WORKS AND WHAT DOES NOT WORK E-MAIL @ [email protected]