The #1 New Home and Remodeling Sales “Killer” and WHAT You can do to keep it happening to you

Have you used it too?

I was reading a comment to a question posed on the National Association of the Remodeling Industry (NARI) and saw a response that blew me away. As I gave my response, see below, I wondered how many home builders, remodelers and new home sales specialists have uttered this response too. If you have, my friend, the end may be near…

This was the question…

“We’ve all heard the phrase ‘it’s the economy

stupid’. But is it really or have we all created

some of our own hurdles to overcome as well. If

so what?”

This was one response…

“We all contribute to the state of the economy, and as consumers we are now keeping us in this situation by expecting to pay 30% less for everything we want. We need to be willing to pay a fair price for goods and services; until we do, companies will not be profitable, which means they will not grow; hire or spend money.

I actually heard someone say that they thought they had been ripped off last year because they paid more for something they bought again this year for less. 30% is the difference between just paying the bills and being profitable for many businesses. Offering huge discounts cannot go on for ever; it is not a sustainable business model.”

Here is the answer (I believe) we all need to hear but don’t want to…

Actually offering huge discounts is a sustainable business model- and the largest company in the world, Wal-Mart, uses it. I’ve studied Wal-Mart (read the Wal-Mart Effect and Made in America for an in-depth look at this company ) and have followed them through this recession. They’ve been able to maintain sales (and grow) plus keep their margins.

What we all need to realize, as consumers, is that we seek out the cheapest reliable alternative. As soon as we find a company that will provide a “commodity” product or service (think Wal-Mart) that we feel is reliable, we look to pay the cheapest price.

I’ve found that most remodelers and home builders believe what they do is special simply because their name is part of the company. The fact is consumers don’t see the distinction and many markets have a lot of very good remodeling/home building companies to choose from. When consumers find 3-4 “reliable alternatives” the point of differentiation is price.

Many products and services we’re 30% overpriced in years past because the market didn’t challenge us to innovate (plus money was cheap and people thought they couldn’t go wrong putting it into real estate). If you think consumers will go back to paying 2006 prices just because they want to make sure your business turns a profit- you better get in the bread line.

The only way to make our margins and grow our business in this economy is to be the “orange”. That is, provide a product or service that can’t be compared to the “apple” competitor. Specialists always make more in every industry.

Example: One of my clients opened up a specialty business that focuses on providing high design, high service remodeling projects in a 10 day period. Through simple internal innovation, they reduced the project time by 66%, cost by 58% and increased margins by 5%.

Most design/build firms don’t want these small projects and out of work builders can’t provide the service and design appeal these customers demand. It’s a niche. Not every consumer wants it but those that do make their choice based on factors outside of price.

If you can’t explain your market position/unique selling advantage to your prospects in one sentence you will always be compared to the cheapest reliable alternative.

To answer the original question, how many remodelers and home builders are as good at marketing as they are at building? If we’re going to make it in this economy it’s up to us. “If it is to be it’s up to me!”

Unless the remodeling and home building activity in your market has gone to zero, every remodeler/home builder has the opportunity to position their companies to take a part of that market. Many old markets HAVE dried up but just as many new ones have opened up.

Get some great ideas on how to do this from my free e-guide, 6 Secrets to Maximizing Your Sales in Any Economy Revealed. Click here to download it>> (it’s free!)

Prosperous times conceal genius. Adverse markets reveal it. Now go out and make it happen!

Happy Selling!

~Rick

Rick Storlie has been helping home builders and remodelers reach their sales goals since 1992. Visit www.NHSalesCoach.com to get your free e-guide 6 Secrets to Maximizing Your Sales in Any Economy Revealed

“Is it the Market or Is It Me?” How to Make Maximum Sales in Minimum Time in a Battle-Hardened Housing Market

This is THE question- isn’t it?

What’s the answer?

Two remodelers and a home builder contacted me last week asking the same thing and here is the answer I gave them- one that you may not expect…

~Rick

Is it the Market or Me?

I was speaking with Mike from Michigan this morning- a second generation remodeler who does NOT operate in the Detroit market.

Mike explained his situation- a situation that may be similar to yours. His business is down over 85% from its peak. He had to lay off most of his staff and is now doing everything himself.

Mike read my blog post on the importance of appealing to women in order to increase your sales. He could relate to the mistakes I had made and now his question was, “Is it the market or is it me?”

Your challenge in 2010

Your challenge in 2010 is no different than Mikes. I’ll bet you’re operating with less staff, have been forced to cut your advertising budget and seem to be constantly competing on price.

For most of you there are less people buying, building and remodeling homes in your market. There are less builders and remodelers you have to compete with but the ones still operating are pretty darn good.

You’re probably working longer hours and making a lot less…

This still begs the question- Is it your market or is it you?

The Answer

The answer is both.

Your changing market is to blame for your sales being off (aren’t I a genius to figure that one out!). Yet, the fact that you have been relying on the market to bring business into your company is your fault too!

“Wait a minute Rick…I’m working harder today than ever before. The business just isn’t there!”

You’re partially correct. You ARE working harder than ever before but are you looking in the right places for the business?

Is it the Market?

In my discussion with Mike I asked him how many other remodelers there were in his market. He told me 2-3 (at his level) but there were also home builders that were now remodeling (surprise surprise).

I suggested he visit the building inspectors office and get a list of permits from 2009.

The first step in identifying if the market is your problem is asking the question, “IS there a market for what I am selling?”

I suggested to Mike he take a look at the type of work being done in his market.

What type of remodeling projects were people building?

How many new homes were built? Where were they built and at what price point?

Assuming there is a market for your services, the second question is how do you get MORE of it?

Getting More Market Share

Now here’s an oxymoron for you- in order to get more market share you need to focus on doing less.

What?

You read that correctly. In order to get more market share you need to focus on less.

I’m not telling you to stop what you’re doing right now. I’m playing devil’s advocate and asking (as a consumer), ‘why would I choose to have you build or remodel my home?’

Unless your company is positioned to specialize in a certain geographic area, lifestyle offering or demograhpic/psycographic profile- you’ll come across as a jack of all trades and master of none.

To use an analogy, if you just had a heart attack would you want to see a general practitioner or a cardiologist? Of course it’s the heart specialist! And was your decision based on who costs less?

When you’re company is positioned as a specialist people will seek you out for more than just the lowest price.

3 Steps to Determining if it’s Your Market or if it’s You

Step 1: Review building permits and MLS sales for your market. Are people buying what you’re selling?

If they AREN’T buying what you’re selling can you offer something different or can you move to a different geographic market where they are buying?

If they ARE buying what you’re selling but you have a low market share, go to step 2.

Step 2: Specialize, specialize, specialize! If you’re in a small market and can’t move, you may need to specialize in 2-3 things.

The key to specialization is understanding your target market’s problems better than any of your competition. More on this to come at a later date…

If you HAVE a market and are perceived to be a SPECIALIST- go to step 3.

Step 3: Focus on Managing Tasks- NOT Time.

There’s no such thing as time management. We all have the same amount of time in a day.

Because you are doing more with less, are you focusing on the things that will get you your next sale? With all the extra duties you’ve taken on, you may have lost focus working ON your business vs. working IN your business.

Most people tend to spend the majority of time working IN their business. That’s where their comfortable- working on tasks they know.

But these tasks aren’t the same ones that will bring your next buyer in the door.

What you need to focus on each day is the tasks that will lead you to your next sale.

Over the last 20 years I’ve broken down these tasks into 3 categories- Preparing, Prospecting and Presenting.

You can download “Task Management for Housing Professionals” for FREE with the link below…

Download the Task Management List Here>>

Thoughts, questions, other ideas? Tell me what you think by leaving your thoughts at the bottom.

Happy Selling!

“Realtors, Remodelers and Home Builders- Discover how to go from Bust to Boom in 2010 with these 3   Sure Fire Tactics”

What’s in store for housing in 2010? Wouldn’t we all like to foresee that!

My crystal ball is in the shop again so I’ve put together 3 tactics that cutting edge Remodelers, Home Builders and Realtors are using to “crack the code” in 2010.

Warning: You will not hear about these iron-clad strategies from others so if you snooze, you lose…Enjoy!

~Rick

Ok- 2009 is over. Great, right? I know this was a tough and trying year. But before we close the doors, let’s look at what was good about it…

• A lot of your competitors are gone and you (the strong) have survived

• You’re efficiency is off the charts because you’re doing more with less

• The market has taught you invaluable lessons and you’re a LOT smarter in January 2010 than January 2009

What the worst mistake most of you made in 2009?

If there was one mistake I watched most home builders and remodelers make in 2009 it was REACTING to the market.

When you react it usually means two things-

1. Sales are down and you make a move to step them up. Usually this means you cut prices.
   
2. When you do make a sale, margins suffer.

Very few predicted the full extent of how much our market would change in one year…Don’t beat yourself up if you reacted to the market for most of ’09- it was a very difficult mistake to avoid.

So What’s Your Strategy to Ignite Sales This Year?

You’re smarter, more efficient and have less competitors.

If you’re going to get PROACTIVE you need some sure-fire tactics.

Here are 3…
1. Focus and Filter: Diversifying is NOT, I repeat, NOT the answer! Every other industry out there has specialty companies that target a certain demographic and psychographic profile. Very few in the housing industry do. We’re all trying to sell the same thing, the same way- yet we tell our prospects, “we’re better.” It’s no wonder we’re frustrated by price wars.

When money is tight consumers take longer to shop and will choose the companies they feel are best suited to solve their problems. Only about 10% of consumers will buy purely on price. The other 90% buy on emotional perceived value.

If you want consumers to choose you for what you are (and make a buck at doing it)- you can’t be everything to everyone.

The micro market (small niche business) section of our economy is poised to boom (and certain sectors are already booming!). The housing industry needs to take the lead from companies like Target, Best Buy and Ford. All of these companies focus on niche offering to a specific target market.

Focus on what you do best or focus on an un-served niche in your market. Filter everything else out- especially the sacred cows!

This is also called Market Positioning and you can discover how to do it by clicking on this link>>

2. Beware of Baby Boomers: I know, I know- you’ve been told that you should be targeting boomers- this is where the money is, right? This is where the money USED to be and this group may have the lowest consumer confidence.

Consider…

• Boomers are getting old (the oldest are turning 64 this year) and they don’t have a lot of time in the workplace. They’re not willing to take on large mortgages and want to do lateral moves as they consider down sizing (which doesn’t work because their current home has lost so much value).
  

• The dreams of early retirement and staying young forever are fading. Boomers lost an incredible amount of wealth last decade, have burned through a lot of savings and won’t be able to replenish it quickly.

The Exception…

Remodelers take note- aging in place along with certain remodeling projects will start to appeal to boomers because they will find themselves unable or unwilling to move (along with the acceptance they are getting old).

3. The Decade of the Woman: Over the last 30 years a woman’s role in buying, building and remodeling homes has grown to where she is now 80% – 91% of the primary influence.

Couple that with our current job market. Approximately 72% of the job losses have been men due to the high percentage of construction and manufacturing jobs shed.

There is no doubt that as this decade plays out women will not only continue to be the emotional decision makers- they will also take a larger role in the financial decisions of the home.

Find out how a group of home builders and remodelers are making their companies more appealing to women (and adding to their bottom line)>>

What are your predictions for 2010 and beyond? What tactics will the new and rebuilt home builders, Realtors and Remodelers be using to unleash sales?

Share your thoughts below…

Happy New Year & Happy Selling!

Cheapest reliable alternative- Home builders and remodelers…pay attention. This is why your prospects focus on price.

I love the way Seth Godin thinks (probably because I try to think the same way : ). Check out his latest blog on why consumers choose the Cheapest Reliable Alternative>>

If you want to get away from dealing with the “price-per-square- foot” black hole, you’ve got to be implementing Market Positioning. Here’s an interview and short article that will help you…

Click here for the article and interview>>

You can also download a FREE report on my website by clicking on the photo

Happy Selling

~Rick

Okay, 3 quick questions…

1. Are you a home builder or remodeler and would like quit competing on price alone?

2. Would you love to leverage your website for new leads?

3. Does the idea of increasing your sales conversion rate sound appealing?

Dear home builder or remodeler,

“People don’t change until the pain of staying the same outweighs the pain of the change.” I love that quote. The only constant in life is change and today’s economy dictates that we must change and adapt to the new way of selling homes and remodeling services.

You have an opportunity to learn a system that allows you to do just that. It’s called Woman-Centric Matters and there are about 100 home builders, remodelers and other businesses across the country utilizing it to make sales and grow their business no matter what the economy.

Watch the video below to get a better idea of the program…(the end of the video gets cut off but just follow the instructions below if you’d like to watch and listen to the webinar)

Get more information by clicking here>>

You have one last change to attend a 1 hour webinar to learn all the details of the program and determine if it makes sense for you and your business. The webinar details are below:

Check out the MN Woman-Centric Consortium of Home Builders web site>>

Our Last Webinar is Monday June 22 at 2:00 CST

1.  Please join my meeting.

https://www2.gotomeeting.com/join/718690170

2.  Use your microphone and speakers (VoIP) – a headset is recommended.  Or, call in using your telephone.

Dial 213-286-1203

Access Code: 718-690-170

Audio PIN: Shown after joining the meeting

Meeting ID: 718-690-170

If you would like to attend this meeting please post a comment to this article with your name, phone, email and company name along with the date of the webinar.

There is limited space for each webinar so if you would like to attend, please send me a comment with your information and we will send you a reminder email prior to the event.

Minnesota Builders Know What Women Want

From BUILDER Online — By: Alison Rice — A fresh approach to marketing, customer service, and home design brings business to small firms during a incredibly difficult market.

When a handful of small Minneapolis-St. Paul builders decided in 2008 to join forces on a woman-centered marketing campaign, they had no idea how timely a decision that would be. “What started out as a marketing strategy turned into a survival strategy,” Rick Storlie of New Home Sales Coach told attendees at the International Builders Show in Las Vegas Tuesday.

Read the entire post –

http://www.builderonline.com/sales-and-marketing/minnesota-builders-know-what-women-want.aspx

Check out the MN Home Builders Consortium

3 Quick Questions for You…

1. Do you work in the home building or remodeling industry and would like quit competing on price alone?

2. Would you love to leverage your website for new leads?

3. Does the idea of increasing your sales conversion rate sound appealing?

Dear associate to the home building industry,

“People don’t change until the pain of staying the same outweighs the pain of the change.”

I love that quote. The only constant in life is change and today’s economy dictates that we must change and adapt to the new way of selling homes and our services/product to home builders.

You have an opportunity to learn a system that allows you to do just that. It’s called Woman-Centric Matters and there are about 100 home builders, remodelers and other businesses across the country utilizing it to make sales and grow their business no matter what the economy. Now you have an opportunity to take advantage too!

Watch the video below to get a better idea of the program…

Get more information by clicking here>>

Check out the MN Woman-Centric Consortium of Home Builders web site>>

If you attended our informational webinar or would like to see it for the first time, I’ve recorded the video and it will be posted on my web site very soon.

Get an overview flyer of the program by clicking here…wc-associate-flyer1

We will be holding a final “Think Tank” webinar on Wednesday July 15th, 2009 from 9:00 – 12:30.

If you’d like to attend that so you can get the entire overview of the program, please post a comment below and we will send you an informational kit to review prior to the webinar.

If there’s a day that doesn’t work- please let me know.

As always, please contact me with any thoughts or questions at 952-895-5566.

Whenever I am exposed to a business today, whether it is online, over the phone or in person, I pay close attention to the dynamics at play. What is my first impression? How do I feel when I scroll through a website, talk to a representative or walk into a store? If you’re like me, you can anticipate the kind of experience you will have within the first 15 seconds.

Why is it that 85 – 90% of the time I am disappointed? Either the website is difficult to navigate or there are problems at checkout. The sales associate/representative isn’t very knowledgeable or doesn’t listen well or has an accent that I can’t understand over the phone. The store is dirty, poorly lit, no one is around to help me find what I need or it takes forever to make a purchase.

As a home builder and new home salesperson, your primary competition today is not another builder or the used home down the street. Your competition today is something very different indeed…

“Who or what is your primary competition today?”

Why am I disappointed with the companies I patronize 85 – 90% of the time? It’s not because I am a consultant that studies industry and best practices. Most consumers feel exactly like me. The reason we are dissatisfied is that we compare the best companies to all industries. In other words, if we thoroughly enjoy the experience we have at our favorite coffee shop, we compare that experience to taking our vehicle in for an oil change, dining out, buying groceries – and shopping for a new home.

We live in a highly specialized economy today. With a few clicks of a mouse, we can find the exact business or product we need. All this has led to a trend of creating micro niche companies. That is, businesses that have evolved into highly specialized companies that appeal to a relatively small group of consumers. This specialization has led to niche businesses that recognize and understand consumers far better than ever before, and they provide buying experiences that are far superior to the rest of the market. These are the top 10-15% of companies you enjoy dealing with; the ones you compare to everyone else.

“How does this work in home building?”

The Builders Association of the Twin Cities’ (BATC) annual Parade of Homes^sm is the largest in the country. According to research done by BATC and Merillat Cabinets, a home shopper will visit an average of 14 different homes and spend about nine minutes in each. Now I don’t know about you, but when I look at just four different models I can’t remember one from the other. How can we expect the consumer to recall the differences between 14 model homes and home builders?

Don’t try to be better. Be different!

If you are a quality home builder or quality salesperson – congratulations! You meet the minimum requirements to be in business today. The reason consumers get confused after looking at 14 different models is that every salesperson is touting that they are better. However, the consumers asks, “How do I know you are better when every model I visit, the salesperson tells me they are better?” Herein lies our problem…

Your biggest obstacle to overcome is not the competition down the street. It is the customer’s indifference toward your homes and the experience – or the lack of it – you provide.

Instead of trying to “one up” your competition, why not develop a niche within the industry and do something different, not better. Ask any home builder or their sales representative why someone should choose them over the competition, and invariably the phrase “we build quality homes” comes up. If the consumer hears this continually, then the only real differentiator between home builders is price. And if you’re not the lowest price, you are out of luck!

Why not become a specialty home builder and/or salesperson?

Remember the top 10-15% of businesses that set the stage for everyone else? That is your goal today. Set yourself apart from the mass market of home building and home selling by focusing on a niche. Understand your consumer better than anyone else and you will become the standard by which everyone else compares.

Happy Selling!