Beware of the Middle-

The middle is never the best or never the cheapest….

Your prospects never remember you if you’re in the middle- you’re just like everyone else.

As builders, remodelers and salespeople we find the middle comfortable. We’re just trying to fit in.

Our presentations, homes and designs are OK.

Not the best…

Not the worst…

Not the most expensive…

And not the cheapest.

We forget that nobody is looking for average. Either we buy on perceived low price or perceived high quality- neither of which is found in the middle!

Happy Selling!

Get your free new home and remodeling sales resource guide here (and get out of the middle)>>

As I sat in front of the second customer in a two week period last October that told me “all home builders are the same,” the brutal reality came crashing down on me: Everything Has Changed. Yes, I was working with a well known, well regarded 30+ year home builder, but, to the customer, we were just another price quote. Between 2004 and 2007, every rule has changed. Indeed, it’s time for a Revolution!

Prior to writing this article, I went back and reviewed an article I wrote in November of 2006 called Seven Ideas for 2007. The article had many good, solid, boilerplate ideas that are still relevant for 2008. The problem is, even though the information is only one year old, it’s no longer enough for a year of changes in our new home market.

Are you angry?

Are you angry yet? Everything you knew (or thought you knew) has changed. And don’t give me the standard ‘this is like it was back in the early 80′s’ hyperbole. Our current climate has absolutely no similarities to that market (think interest rates, unemployment, media, lending and national home builders). The reason I ask if you are angry is because angry people are ready for a Revolution. Angry people are ready for change. Think 2008 is doom and gloom? Think again. Think opportunity.

Idea #1- Burn Baby Burn. In 1519, Capitan Hernando Cortes and a small army left the Spanish held island of Cuba and set out on one of the greatest conquests in the history of the world. Cortes was going to accomplish his goals no matter the consequences. He put to death some of those who opposed him, got himself appointed Capitan-General in order to get out from under Diego Velazquez’s authority, and even destroyed his fleet in an attempt to motivate his men to adapt to his at-all-costs attitude. The destruction of the ships has been widely studied and is still debated today.

Here’s the idea: In – in order to move forward, you can’t go back. The first list you need to create in 2008 is your “Stop Doing” list. I suggest:

1. Redefine who you are today and what you want to be tomorrow. The market will not build your business for you now or in the future.

2. Stop focusing on your houses (more on this later).

3. Stop treating your customers as you have always treated them.

4. Stop being ordinary (much more on this later).

5. Stop holding on to ideas that worked in the past.

6. Stop worrying about failure and fail forward fast.

Past Success = Enemy of Future Success

Idea #2- Your competition…today. Think mass retail with me for a moment, specifically discount store chains. On one end we have Wal-Mart (low price leader) and on the other end we have Target (more expensive but a pretty cool shopping experience). The problem with the majority of home builders today is that they fall into the Kmart category (stuck in the middle). They’re not as cheap as the national home builders, yet there is absolutely nothing compelling about their home designs or the customer experience. The customer looks and says, ‘they aren’t the lowest price so I won’t buy them.’ Thus we believe that we have a price problem when we really have a differentiation problem.

Your biggest obstacle to overcome is not the competition down the street. Your obstacle is the customer’s indifference toward your homes and the experience (or lack thereof) you provide.

Idea #3- Design please. “If a product’s future is unlikely to be remarkable – if you can’t imagine a future in which people are once again fascinated by your product – it’s time to realize that the game has changed,” Seth Godin from the book Purple Cow .

“The best design solves problems, but if you can weld that to the cool factor, then you have a home run,” Mark Schurman of Herman Miller, manufacturer of the $750 Aeron office chair.

Here are your design questions for 2008. What one thing does your home have that is the absolute best in the micro market you compete in? What problems will your home(s) solve for the customers you serve? If you can’t walk through your home(s) and answer those questions, how will your customers be able to?

Idea #4- Brand=Talent. “It’s been said that the most important decision an organization can make isn’t what to do, but who’s going to do it. That means that before you charge headfirst into the changes necessary to take it to the next level, you’d better decide if everyone on the train is really on board with their entire heart and soul,” Joe Calloway from the book Becoming a Category of One.

A lot has been written about branding your company over the years. Your brand is not an external thing created by an advertising campaign. Each individual within your organization creates your brand by what comes from their hearts.

Therefore, do whatever you have to do to keep the most talented folks around and don’t be afraid to weed out those that don’t fit into your revolution.

Idea #5- Go Green (just don’t pay more). According to Renegade Marketing, “Going Green” is a top 10 marketing trend for 2008. The good news for most homebuilders is that many of their current practices and products are already green. They just aren’t advertising it.

About 40% of the consumer market is interested in products that make their home safer, use less energy and tread lightly on the earth; they just don’t want to pay more for it. And when you do find the few people that will pay more, the payback needs to be in five years or less. Here’s the idea: Show them what you are already doing that is green (even if everyone else is also doing it). Think 2X6 exterior walls!

Idea #6- What are you selling, really? It’s a home, not a house, right? If you think people buy your homes because you are a “quality” home builder, think again. In today’s economy, every home builder brings a quality home to the marketplace. The builders that don’t are gone or will be gone soon. Quality is an entry level factor.

If your buyer’s are not buying a “quality” home, then just what are they buying? I suggest they are buying an emotional connection to your brand through a personal relationship.

In 2008, the salespeople that will sell the most homes are the ones that will discover more about their customer’s problems and get closer to them than anyone else. These salespeople will create an individual, thoughtfully staged experience and transform their customers ONE AT A TIME.

Don’t think marketing to the masses.

Think marketing person to person.

Idea #7- Women Rule! For any man reading this, let’s take a crash course:

• Women are directing the finances in nearly 70% of all U.S. households.
• Women purchase 62% of all new vehicles and influence another 30% of decisions.
• More than 80% of NFL products are sold to women.
• Women make 83% of all consumer purchases.
• Women directly purchase or have controlling influence in the purchase of 91% of all new homes.

Women in the U.S. make up the largest economy in the world. Need any more proof? A recent article in the Star Tribune about the buying habits of women vs. men when it comes to luxury cars reveals some stark contrasts. “Ask a man what automotive luxury means and chances are he’ll mention horsepower, handling and gadgetry. For a woman, there’s nothing more luxurious – in cars as in life – than safety, service and being taken seriously.

Are you designing homes and experiences that appeal to the women in your target market? Revolution me boy!

Idea #8 – Believe. At a seminar a few years ago, I learned there are four types of people in the workplace: the critics and the skeptics, the laughers and the mockers, the perplexed and the believers.

In my work with home builders and their sales staffs I am privileged to work with some believers. These folks get it. They believe in the systems I teach and they implement the strategies on an on-going basis.

They sacrifice daily and understand they can’t be all things to all people but they can focus on, say and do one thing. They become absolutely excellent at it. In other words, they do small, remarkable things on a daily basis.

“Don’t be boring. Safe is risky. Very good is bad.”

- Seth Godin

“Blame no one. Expect Nothing. Do something.”

-Bill Parcels, 2 time Superbowl Champion Head Coach

Happy Selling and Happy New Year!

As a trainer, leader and manager, it is my job to stay positive and always be searching for new ideas and solutions. I want to share a little secret with all of you: I have the same feelings of insecurity, despair and disappointment that you all have. I have ridden the same emotional roller coaster that every home builder and new home specialist has. One advantage I have that some of you may not is that I avoid popular thinking. May I explain?

Let me define popular thinking with an analogy. You are scanning the business section of the newspaper and see an article on the next great stock pick. You take the advice of the author and buy the stock, only to see the value of the stock drop dramatically over the next weeks and months.

My personal experience with this type of thinking was investing $3,000 in the Munder Net Net mutual fund in 1999. This fund was a conglomerate of internet start up companies that we all know crashed and burned in 2000. I jumped on the “tech” bandwagon when everyone was already on it and I should have been on it before everyone else climbed on. In other words, I was following popular thinking.

Popular thinking as it relates to the new home industry sounds something like this: “Now isn’t a good time to sell my home. We’re going to wait for the market to get better.”

“The economy isn’t good and we think we should wait.”

“Nothing is selling in your neighborhood so we’re going to wait and see what happens,” or “Something must be wrong because no one is buying in your neighborhood.”

“I can’t get any traffic,” or “YOU have to do something to get me more traffic!”

In other words, popular thinking is buying into what the media, many of our own builders, salespeople and trades are saying about our current market. Ask yourself this question, ‘Am I a popular thinker?’ Here is your Litmus test:

1. Do you read the newspaper and commiserate with colleagues about how bad our current real estate market is?

2. Are you fixated on prices and believe your homes/home sites are too high?

3. Are you still waiting for the next Parade of Homes^TM to save your year and make your sales for you?

4. Are you waiting for walk in traffic?

If you answered yes to any of the above questions, you are, at least partially, a popular thinker. In my 15 year career I have done a tremendous amount of study on change. Earlier in my career, I believed I could motivate people to change through the sheer force of my personality. I could not have been more wrong. I have discovered the only true way to get a person to change is to invite them to change their thinking and then they will change their behaviors.

Change your Thinking

If we want to eliminate popular thinking from our minds I encourage you to consider the following ideas:

1. Quit reading the newspaper and participating in activities that encourage popular thinking. Get away from negative people; quit watching the news and four hours of TV a night. Seek out magazines, books and people that will give you new ideas to incorporate into your business and personal life.

2. Start working on yourself. Look at how hard we work at our jobs but how little we actually work on ourselves. Imagine what you could become if you invested just one hour a day on personal development!

3. Get uncomfortable. If you keep on doing what you have always been doing, you will keep on getting what you have always been getting. Try new things that make you uncomfortable. This can be a simple as eating at a restaurant you have never been to before and notice how you are treated as a customer. Are there things you can learn and incorporate into your business?

4. Join a support group. Seek out and join a group of people that will encourage, give critical feedback and suggest new ideas. This could be a networking group such as Business Networking International, a local Chamber or Rotary club, Toastmasters or put together your own group of business associates. These clubs are all around you.

5. Write down your goals. Many of us have had very difficult years and are not satisfied with our sales to date. Write down realistic goals for the next 5 months knowing what you now know. Once you have identified those goals, set a stretch goal on top of that. Here is a hint on goal setting: start from the top down. That is, what do you need to do on a monthly, weekly and daily basis to make that next sale? Write it down and review it weekly.

6. Don’t reinvent the wheel. Every industry goes through cycles and the answers to our current challenges are already out there. One industry I like to study is retail. Look at what some of the most successful retailers are doing to create customers and generate referrals (By the way, do you think Target Corp. may have some ideas we can borrow?).

Another great resource is the local Sales and Marketing Council at the builders association and www.BuilderBooks.com.

Become a Shared Thinker

Shared thinking involves surrounding yourself with great people, mentors, authors and speakers and asking for help and ideas. Ask your customers about how they would improve your communications and home designs. They will tell you everything you need to know about your systems or lack thereof. Drop your ego and open yourself up to improvement and see how far it can take you!

One final note, beware of compromise. Compromise too often will take a great idea and dilute it to the point of mediocrity and make it average. You will face many naysayers’ on your journey to eliminate popular thinking. Once you have set your goals, never compromise and let popular thinking rain on your parade.

We see it on television, in the newspaper, magazines, billboards and in our spam box. I am convinced there is a magic pill for everything in life. For anything that ails us there is a pill we can take that will fix it.

Lose weight….take a pill.

Don’t feel good….take a pill.

Want more hair….take a pill.

Feeling old….take a pill.

We are an instant gratification nation. We don’t want to wait, invest a lot of time (and certainly a lot of effort) or deal with any pain. We want to be rich right now and have all the goodies the marketplace can deliver. Don’t have the cash? No problem; put it on plastic and worry about paying for it later.

So where am I going with this? If I could pick one question that I hear on a weekly, sometimes daily basis it is this: ‘What can we do to get more traffic?’

No matter how much I preach about lead sources  the bottom line is salespeople want to wait for the buyer to come to them. Yes, we are still hung over from the last seller’s market!

Tom Hopkins has a great line about this profession we call sales. He says, “Sales is the highest paid hard work and the lowest paid easy work.” To reiterate, waiting for walk in buyers is pretty darn easy!

Accept it. There is no magic pill

I hate to burst any bubbles but it’s true. If we abuse our bodies for years it takes years to fix the damage and sometimes, there is no fix. After years of buyers coming out of the woodwork and with little or no attention paid to our sales and marketing efforts, we can’t expect to fix what’s wrong in a few months or weeks. Accept it. We got lazy. We forgot what it was like to market and definitely forgot what it was like to sell. Creating urgency was as easy as saying, ‘Mr. Buyer, if you don’t want it I have two others that do.’

At a sales management seminar last year I heard one former salesperson tell a story of writing 29 purchase agreements at once. He put 29 couples in a conference room and walked them all through the paperwork. How was that selling? I know some of you are saying ‘we never saw anything like that.’ I didn’t either. But I do accept that the majority of my success between 1999 and 2003 was market driven, not because I went out and educated myself to become the best sales manager and salesperson I could be. The question now is do you also accept this? If you don’t, you have a long road ahead of you. If you do, read on!

Another way to increase sales besides traffic

For every 10 buyers we come into contact with, the breakdown used to go something like this:

25% are very easy to sell

25% are very difficult to sell

50% fall somewhere in the middle

With the help of the current media, I believe these ratios have adjusted to the following:

10% are very easy to sell

40% are very difficult to sell

50% fall somewhere in the middle.

What I’m suggesting is that we have less buyers walking into our models and when they do, only about 1 in 10 is easy to sell. The other 9 are very guarded and know how to make an average salesperson believe they are just looking. Here’s my next question to you, why be average when you could be great?

Great salespeople are made, not born

It has been a long time since I have seen what a difference a great salesperson can make in today’s marketplace. I subscribe to the theory that many of us have the characteristics that make up great salespeople but very few of us put in the effort to fully exploit those characteristics. The only difference between average and great is a decision to become great. Anyone reading this can decide at any time to become great.

Great salespeople take the leads they have and convert more of them to buyers. They know their conversion ratios and understand they first need leads, then appointments, then reservations and then sales. They follow a process and convert a high percentage of the buyers they have to work with. If an average salesperson will convert 1 or 2 out of 10, a great salesperson will convert 5 out of 10. In my book that is another way to dramatically increase sales without bleeding the marketing budget dry.

How to become great

1. Accept that it will take years to really get it. Look at it this way. If you feel that is too long, the time will pass anyway. The sooner you start, the sooner you will get there.

2. Look for the little things. I often tell my builder clients that there is no one thing I can bring to the table that will improve your business 10 or 20%. I can, however, give you a lot of things that will improve it 1%.

Almost immediately after working with John on these issues, we saw some results. It started with homesite reservations, then it moved to plan deposits and now we are seeing the purchase agreements. He sold both his model home and inventory home and several pre-sold homes. The builder was so impressed by John he is building two other homes and John continues to work with customers on pre-sold homes.

In the last 6 months, since we had John mystery shopped, he has made at least one sale a month and today, in December, has more prospects that he has had all year. It hasn’t been always been a smooth road. John has had several cancellations of reservations, plan deposits and one sale in the same time period. I have to constantly remind him that the more sales and opportunities you have, the higher the cancellation rate. A good salesperson will have a 20-25% cancellation rate because they are making the sales that others can’t or won’t.

Every salesperson and builder I work with, we focus on one thing, the sales process. We know that we can’t rely on the market to sell our homes so we rely on ourselves. Roy and John or any of the other salespeople I work with are by no means mistake free. We still work every week to improve our sales process and strategize on how to get that next sale. We can say this much; we are beginning to take market share away from other salespeople and builders. Yes times are tough but they are much harder for those waiting for something to happen.

Things don’t change, we change. Things don’t get better, we get better.

Are you Making it Harder to Sell and Don’t Even Know it?

The market is tough enough, wouldn’t you agree? Why then, would you make it even harder to market and sell your services today?

“What do you mean by that Rick?”

Does this sound familiar?

• Your marketing doesn’t work.

• The only thing your prospects are interested in is a low price.

• Your phone has quit ringing and your model traffic is near dead.

• The last ad you ran or postcard you mailed netted a whopping “0″ calls.

• The only thing you do is “bid” today.

You’re thinking it’s the market or just consumers in general. Maybe.

But what if you had something to do with it?

What if 90% of your problem was internal and not the external market?

Why You’re Not Selling What You Want

The reasons your not selling today are…

Your prospect’s think you’re just like every other builder AND you’re looking for your next customer, not your next prospect.

I don’t have time to get into it but if you want to know the answers to finding more prospects and converting more of them to customers, download my FREE e-guide:

6 Secrets to Maximizing Your Home Sales in Any Market Revealed (yes it’s FINALLY ready)

You can get it by clicking on this link>>

Did You Miss Me At the Becker Home Center Green Expo?

No worries, see a video of my presentation, How to Make More $Green by Building Green by clicking here>>.

You can even get a copy of my power point. Just click here (it’s FREE!)>>

Coming Soon to a Minnesota Town Near You!

I’m on the road March 19th – 22nd and speaking about how to transform builder websites into lead generation machines.

Paul Foresman of Design Basics will be speaking with me about market positioning using the Woman-Centric approach>>. We’re going to show everyone, step by step, how builders from across the country are having their best year’s yet.

Get more information and reserve your spot here>>

The last time we teamed up was at the International Builders Show and the attendees loved our message.

You can keep hoping or…

Show up, learn and start kicking some ass. It’s your choice. What will you do?

Happy Selling!

~Rick

P.S Don’t miss me out on the road! Get the details here>>

Helping contractors maximize sales in any market.  The New Home Sales Coach Transformational Sales System for home.builders and remodelers transforms dull and boring organizations into extraordinary and remarkable ones.

Click here>> and get Rick’s FREE e-guide 6 Secrets to Maximizing Your Home Sales in Any Market Revealed.

Ask Rick a question and he may feature it in an upcoming issue of Coach’s Corner>>

What do my dog Bentley and the Housing market have in common?

~Rick

Dogs and Housing Markets…What?

Q: What do dogs and housing markets have in common?

A: If you sit back and don’t pay attention they can bite you in the ass when you’re not looking!

“There’s no such thing as the status quo. Either you’re doing something every day to get better or you’re getting worse.”

-Pat Riley

I love that quote. It reminds me of our housing market. Just when we think we have something figured out and we’re making some headway…BOOM…everything changes. That’s why you can’t sit back and hope. The best strategy right now is to attack and don’t look back!

Are you…

…always educating yourself and looking for new opportunities?

…trying, failing and learning from it?

…watching for an opening to exploit a niche?

…setting time aside to work on, not always in your business?

…investing in yourself?

…pushing yourself out of your comfort zone?

I could go on and on but I really think the key to winning today is to simply DO SOMETHING!

But what do most people do? Comiserate, wait, hope, hunker down and slowly die.

I’m speaking quite a bit this month and I always watch an audience, focused on my message, taking notes and…95% of them not doing a damn thing with the information.

It used to bug me. You think you can save everybody if they would just follow your advice. Then you learn that everyone shouldn’t be saved and “cleansing” is a good thing.

It’s a hard phone call or email to get when someone has waited so long to ask for help and no matter what I do, I can’t help them.

Please continually educate yourself and most importantly, TAKE ACTION with your new education without the fear of failure.

Oh ya…about Bentley. I’ve noticed a few times Bentley can turn the handle on his kennel door. I just blew it off and was satisfied with the “status quo” that “he’s only 4 months old and can’t get that door open.”

Well, just like the market, things change. The little bastard not only figured out how to get the door open, he had a free ride in my garage for 3 – 5 hours. This is what I found when I arrived home today…

I had no idea a dog could have a shoe fetish! What you DON’T see is the pee in one corner, poop in the other and chewed up paper towels all over the place.

Happy Selling!

P.S My Sales Symposiums are coming to you! You can now order electronic, print, DVD and CD versions on my website!

Helping contractors maximize sales in any market. The New Home Sales Coach Transformational Sales System for home builders and remodelers transforms dull and boring organizations into extraordinary and remarkable ones.

Click here>> and get Rick’s FREE copy of 6 Secrets to Maximizing Your Home Sales in Any Market Revealed.

Ask Rick a question and he may feature it in an upcoming issue of Coach’s Corner>>