Through the Eyes of the Customer: A "From the outside, looking in" Perspective

by John Underwood

One of the popular topics of discussion that seems to come up all too frequently among retail builders is the impact of the economy, the limited number of lenders and the shortage of available land for factory built housing. We seem to often ponder whether or not we as an industry have hit bottom and are on a rebound. Many retailers are still waiting for the market "to come back" and the opportunity to return to business as usual. As I have suggested in several previous writings, there is nothing on the horizon to indicate that this industry will ever go back to "what it was in the past," and those of you waiting will find that your wait is futile.

These discussions of the economy, lenders and the availability of land for our homes have taken their toll on this writer as well. I, too, have started to wonder if we as an industry truly have the ability to survive. I also wrestled with the question if the demand in the market for our product is so low, that all we can expect is to, hopefully, survive. If this was the case, I wanted to know what, if anything, I could do as a sales and sales management consultant to help this mortally wounded industry cling to its frail, almost lifeless existence. What I have come to realize over the past six months or so, is that we have definitely hit bottom, things are turning around, the demand for affordable housing is as strong as ever, and that consumer confidence will return IF we as an industry begin to act like we actually want their business.

I have always been of the belief that if we as sales and marketing people wish to improve anything in the way we market and sell our products, we must look at the industry through the eyes of the consumer. In other words, we need to live the "customer experience," that being what our prospects hear, see, and feel as they make the effort to invest in our homes. In order to actually do this, I, once again, took the time to actually "shop" numerous dealerships throughout this vast country of ours, and the results of this journey are what I wish to share with you in this article.

Please understand that I will not use the names of the retail locations or even the areas of the country I visited, as it is of no consequence. My experiences throughout all of my 37 dealer visits were actually very, very similar. It doesn't matter where in the country I was, the size of the dealerships I visited, or the product they represented. I saw no difference between predominantly modular dealers and those that sold mostly manufactured housing. Also, please do not diminish the importance of the data simply because it is based on the sampling of only 37 dealers. The consistency and similarity of my experiences clearly demonstrates that the sampling of 37 locations was enough to draw some meaningful conclusions.

For those of you who believe that because I live in Naples, FL, these "shopping experiences" were limited to this region of the country, rest assured that they were not. I intentionally selected several diverse market areas, so as to not limit my education to any one particular market sector.

First, allow me to set the stage. My intent was to be a "great prospect" on each location I visited. I wanted the sales people I encountered to have every reason to be excited so as to fully engage their sales effort and give me their absolute best.

According to the sales people I have encountered over the past 20 years in this business, a "great" prospect is one that has excellent credit, a substantial amount of money down, owns their own property, specifically one that allows for manufactured housing and has a sense of urgency. MY story was that I work for a company that installs and repairs communication towers. We were under contract with the state and our contract would start in six months, so it was imperative that we be in our home in less than 5½ months. This would suggest that if we were to meet that deadline, we would have to take action now. I also suggested that we had already sold and closed on our current home and were in temporary quarters, anticipating our move. For those that still did not qualify me as a "great" prospect due to the absence of land, my wife was to be currently meeting with a realtor and we had narrowed our land choices down to two possibilities. I assured them that by 5:00 p.m., we would be the proud owners of a property. I even went to the extent of picking up business cards of a local realtor, so as to underscore the credibility of my story.

Before I begin to truly entertain you with some of the more memorable moments of these visits, allow me to give you some of the more startling statistics. Here are the results of what happened as I visited the 28 dealers:

1. Times I was able to "tell my story" 0
2. Times I was never able to talk to a sales person at all: 41%
3. The number of sales people that actually greeted me and introduced themselves: 52%
4. Times I was asked to fill out a "registration card": 41%
5. Sales people that actually accompanied me out on the lot: 48%
6. Sales people that would have a clue as to my wants, needs and ability: 8%
7. Times I actually engaged in an intelligent conversation: 8%
8. Sales people that took notes on this conversation: 8%
9. Sales people that seemed to have a "step-by-step buying process": 0
10. Sales people that invited me to their office, before or after viewing homes: 21%
11. Sales people, or receptionists, that gave me literature: 78%
12. Sales people that asked for ANY kind of commitment: 0
13. Sales people that followed up with a phone call, card, letter, etc.: 0
14. Sales people that could earn my business: 8%
15. National average "closing rate": 3%

So which of these 15 sales activities should not be happening on your sales location each and every time a prospect visits your location? If you are a retail owner with all of your assets at risk, and you are not getting an uncomfortable feeling by this time, check your pulse. If you're one of those retailers that believe that this can only happen somewhere else, understand that virtually all of the retail builders I visited were of the same perception. Even if your results are better than these, ask yourself, "How much better could your results be?"

If I were in the manufacturing side of the industry, I would have some very serious concerns about how my product was being represented in the market and if perhaps, a serious amount of effort should be put into helping the retail builder become more effective. Or, you could always wait until the market comes back around.

The story actually gets worse. I drove onto a snow-covered dealership up north, with modular homes on display, five of them being in log or cedar siding. I will never forget the picturesque setting of the log homes, surrounded by snow-covered pines, the homes being set far enough apart to give the dealership a sense of community. The snow was thick on the roof of the homes, and I was absolutely so taken aback by the serenity of the moment that I took a picture of this postcard-like landscape. After about 20 minutes of asking questions and trying to coerce the sales person to actually go out into the homes with me, he finally agreed. I told him that my wife will absolutely flip when she finds out that she can have a home such as this with log or cedar siding. (I would like to add that these homes were all modular, most of them costing in the $175,000.00+ range for property and all.) I must have taken 15-20 pictures of these homes to "share with my wife." The sales person finally informed me that I really should try to talk my wife "out of the log or cedar siding" because the "woodpeckers love the stuff." I suppose that the multi-billion-dollar log home industry needs to shut its doors.

On yet another occasion, I was not able to see a sales person. The receptionist did her best to hand me some literature and added that the sales person would find me out in the homes, IF he has time. Upon viewing the homes, and actually being passed by the sales person on more than one occasion and being consistently ignored, I went back to the sales center and requested some more literature. After pummeling the receptionist with questions, hoping to stir up some excitement, a younger lady stepped out of another office and stated in a rather curt manner, "Perhaps I can answer some questions". I enquired if she was a sales person, a question that obviously annoyed her greatly. How dare I assume that she could possibly be in a profession that was so far beneath her dignity? "Oh no… I'm not just in sales. I manage the place," she answered with a look that had all of the warmth of an ice tray. I asked her to give me an idea of the advantage of investing in a modular home as opposed to a site built home. "Well, other than the fact that they're built inside, there isn't much of an advantage. Not anymore, anyway," she added, "not now, now that they've gotten so expensive." I kid you not… that's what she said.

I could go on and on with stories that most of you would never believe could happen, at least not on your dealership, yet they happen every day. Every day sales people lose sales simply because they have no process, no system and they are not being held accountable by leadership. Every day this industry suffers greater and greater losses, not for the lack of good product, not for the lack of demand, not for the lack of available financing, but simply because we have our heads buried in the ground and because we're simply not paying attention to what the most important people in our industry, our sales people, are doing every day.

We lose sales every day, because from the prospective-buyer point of view, we are doing pathetically little to earn their business. The "customer experience" when it comes to the way we display our homes, inside and out, and the way we supposedly help prospects invest in our homes, falls short of what even the least discriminating buyer would expect from us. We spend way too much time worrying about the economy and the overall the state of the industry, and way too little time worrying about the last four prospects that came to our location and had a less than 8% chance of engaging in a meaningful, informative and productive conversation about what we as an industry have to offer and what we can do for them.

One fact that all retail builders need to grasp is that your success depends first and foremost on your sales peoples' ability to sell your product. If what they do is not being done at the highest level of efficiency, everything else is of no consequence. If they can't sell, the economy doesn't matter, the availability of lenders or land doesn't matter and the overall state of the industry is but a distraction.

There has been an awakening among a number of retailers over the last six months. They have come to realize that if they are to survive, they will have to take a leadership role in fixing some of what is wrong with their own store(s) and put the woes of the industry aside. They have started to facilitate discussions and training on a variety of topics such as best practices for: marketing on and off the retail location, effective sales and sales management, and productive prospect management. They are learning how best to leverage their efforts with the residential real estate market, getting a better understanding of real estate appraisals and teaching their sales people to be the professionals they need to be if they are to succeed in this new housing era. I'm not referring to the "topical antiseptic" treatment of these problems as has been done so often in the past, but actually looking for long-term solutions to the issues that so badly cripple their sales.

For those manufacturers that have already taken that leap of faith and that have joined their retail distribution network in this effort, there is more than a glimmer of hope for your future. It is my absolute belief that the potential for those retail dealers and manufacturers is far greater than any of you can possibly imagine.

For those who are not involved in such an effort, those of you who are not focused on growth, and those of you who are waiting for the market to return to how things used to be, the light at the end of the tunnel… is probably a train. ##

John Underwood is the founder and president of the Selling Edge, LLC. "As Chairman of the Manufactured Housing Education Institute (MHEI) as well as a Board Member of the Manufactured Housing Institute (MHI), I had the responsibility of looking for a system for managing our sales people that not only worked for us, but also one that was based on solid business principles and selling ethics. SellingEdge PRO is such a system." Doug Gorman, Home-Mart, Tulsa, OK, Past Chairman, MHEI, 7 Time Retailer of the Year. You can contact John by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 520-241-9907.