Marketing — the process which creates consumer awareness of products and services — as it relates to small volume and/or custom architects or builders, is a topic that has been written and spoken about extensively at conventions and symposiums. Some great ways to create consumer interest in a builder’s services include realtors, job signs, advertising, parades of homes, seminars, home and garden shows, public relations and model homes. Effectively converting interest into a construction contract is something completely different.
The actual selling process is critical to a small builder or designer whose time to devote to selling is limited. The psychological transition a consumer makes from mere interest in a builder’s services to willingness to sign an agreement and spend hundreds of thousands of hard-earned, and yet-to-be-earned dollars, is not one to be taken lightly. Those who know how to guide clients through the decision-making process most likely will be the ones who get the best customers and spend the least amount of time during the often drawn-out preliminary stages.
The entire purpose of marketing and advertising is to get the phone to ring. Therefore, a phone call most often will be the first contact with a prospect. When the phone rings, make sure the image you have worked so hard to create is not tarnished by poor phone etiquette. Whether the call comes directly from the prospect or a realtor, always answer by identifying the company and who you are. Had a bad day? This contact is crucial, so don’t blow it with a bad attitude.
The first call provides an opportunity to make a positive impression and to make sure they are your type of prospective client. Prequalify them based on budget, time frame, where they want to build and type of home before you commit to an appointment. Start a prospective client information sheet to track this information and set an appointment with promising prospects. The meeting should take place in either your office or a model/spec home. Avoid meeting with the prospect at their lot (if they already have one) or their home.
Set up the first meeting with your prospective client so you control the pace and content. Have a goal for each meeting. For this one, goals could include: setting an appointment to meet again; agreeing to a site visit; or, ideally, to sign a preliminary design/build agreement.
Make sure the meeting space is clean and private. If you have created a brag wall, meet in this room and seat your prospects facing it. Have marketing materials on the table before your prospects arrive: brochures, sample plans, business cards, a presentation manual, sample forms and agreements, reference lists and a legal pad to record what is said. Scrambling around for this material after the prospect arrives indicates lack of preparation and organization.
Upon arrival, immediately greet the prospect at the door or in your reception area. Do not make them wait, even one minute. Their time is valuable and they will judge you by your response to their arrival. Also, do not take your cell phone into the meeting, and make it clear to everyone in your office that you are not to be disturbed while meeting with your prospect. Ask them if they would like coffee or something to drink and then usher them into your conference room. Direct them to a seat facing your brag wall; then excuse yourself to get one last item for the meeting. This is simply a tactic for letting them get settled and, more importantly, to peruse your brag wall. This helps establish credibility and can provide an icebreaker for your presentation.
Start the meeting by asking them to tell you a little about themselves. This puts them at ease and gives you an opportunity to target your presentation to their needs. Don’t let this part of the conversation get bogged down in details about what they want in a home. Focus on the what, where and why of their desire to build. This also can be an opportunity to evaluate the core reason for building a new home; an expanding family, a job transfer or promotion, or perhaps they are downsizing. Different reasons for building require different approaches and emphasis in the sales process.
Next, tell your story. Tell what type of homes you build, a little company history and why you should be their choice. A presentation manual can help your talk stay on track and achieve your meeting goals. Make sure that your brochure and other promotional literature reinforces what you cover during your presentation, but delay giving them any brochures or other literature until the end of your meeting. People naturally will leaf though this material, distracting them from your presentation.
After making a presentation, sit back and listen. Ascertain their needs and wants, and whether they have realistic expectations. Often, you can determine if they are flexible or will be a good client. Once again, at this stage stay away from detailed discussions of minutiae. When they have finished, emphasize what you can bring to the table to help them achieve their needs and wants, and what the next step will be.
Depending on the prospect, this is a great time to try the first of a three-step closing process; have them sign a preliminary design/build agreement. Although the agreement is simple, limited in scope and, in most cases low in cost, it is crucial. Once the decision is made for you to proceed by getting designs and specifications, and they have given you a check — no matter how small — they have mentally chosen you as their builder. For all intents and purposes, the sale has been made.
Don’t push the preliminary agreement if the prospect is hesitant, but make it clear that to move forward with design or other preliminary work, you must have an agreement. This puts the prospect on notice that you won’t work for free. This alone can pay dividends down the road.
Because every custom home project proceeds at a different pace, it is impossible to anticipate the number and subject of each subsequent meeting. In any case, you must cover the following ground prior to contract:
- Site selection. When the owner does not have a site, the builder can play a critical role in helping the owner choose one that will fit their needs and budget.
- Design. Whether done in-house or by an outside designer or architect, the builder should monitor, if not control, the design and specification process.
- Bids, estimates and allowances. Putting a comprehensive bid package together takes time, and owners are much more at ease when the builder “opens the books” and discloses the numbers to them.
- Bid letter. Writing and presenting an easy-to-read bid letter lays out your proposal to build their home for a specific price with certain inclusions, exclusions and allowances. It does not address all contractual issues.
The bid letter is the second step of the three-step closing process. It asks for a client’s approval of the price, specifications, inclusions, exclusions and allowances without hitting them with 15 pages of legalese. Contractual language is intimidating for everyone, so save it for later. Now is the time to hammer out any price negotiations and changes. You are agreeing to agree on a full-blown construction contract. Have a blank contract available to take home and review when they sign the bid letter.
Throughout this process, it is your responsibility to create an atmosphere of trust and partnership. Emphasize that they are entering into a consumer purchase unlike any other. Most likely, their new home is the largest one-time purchase they will ever make. It is loaded with emotion and stressful decisions. You are their guide, making the experience enjoyable. Happy clients are profitable clients who will give you glowing references if they are treated with respect.
The final step is the signing of the actual construction contract, and usually is a no brainer because the actual close was done long ago when the preliminary agreement was inked. Not all contract processes are easy, but it is amazing how many can be completed following this process. No competitive bidding. No unrealistic expectations. Try it!