Building Your Future by Building Relationships

by Chad Carr

In our previous column on this topic, I shared the results of a study that found 80% of all home buyers spend three months to a year or more doing research before they are ready to sit down and discuss their home purchase with a dealership or salesperson. Regardless of whether they are looking for a Manufactured, Modular, Site Built or any other type of home, prospective customers are going to do research before they are ready to buy.

Understanding how and where they do that research is critical to your marketing efforts.

Knowing what you should be doing during that research period is critical to your sales efforts.

In previous installments of this column I have talked about how much research customers are doing on the Internet and how important it is for you to develop a strong Internet Marketing Strategy.**

In addition to their on-line research, customers can also do research by picking up the phone or coming to your office. Over time, most prospective customers will do all three.

During this research period, prospects are gathering information so they can feel intelligent and empowered about their purchase. They are also looking for a relationship with someone they can trust to help guide them through the purchase processes.

Your job as a retailer or a salesperson during this research period, is obviously to help the prospect by providing them with information and more importantly to build a relationship with them so they will trust you to guide them through the purchase process. Building this relationship should be the primary goal.

Most of the retailers I talk to are pretty good at the first of these two tasks. They have information on their web-site, they are happy to answer questions over the phone, they will gladly spend a couple of hours showing their houses, etc.

Unfortunately, when it comes to building the relationship with the customer, things break down.

When most people think of retail sales, they picture a store where customers go to look at merchandise and maybe make a purchase. The sales people at these stores literally "wait on" the customers. They wait for them to come in. They wait for them to ask questions. They wait for them to make a purchase.

Unfortunately this mentality often carries over to Factory-Built Housing Retailers as well. In a market like we had in the 90s when there were qualified customers around every corner it was okay for sales people to "wait on" customers. They could wait for them to come in. When they called or came in, our sales people would be polite and answer their questions. When they wanted to buy a house, our salespeople would sell them one.

Today, waiting on customers can be a death sentence. Today's sales housing professional needs to be proactive in making the phone ring and the parking lot fill up with prospects.

So, what should sales people be doing if not waiting for qualified prospects to call or come in??

Build Relationships with "Non-qualified Prospects"

If we know people are going to research for up to a year before they are willing to talk openly with a salesperson, we can assume most customers who are early in the research process are not going to present themselves as being hot prospects - right?

Everyone in sales has heard, "We are just looking" a million times. Good sales people know that "just looking" can turn into a great conversation about buying a house, but most often those prospects leave the sales center with lots of information and no concrete next steps.

Most salespeople assume if a prospect does not have a sense of urgency, has no place to put a home, doesn't have a down payment or hasn't started to think about financing - they are a "non-qualified prospect." They treat those prospects the way they were trained to back in the 90s - they let them go and wait for another to come along.

Today's sales professional needs to assume that those "just looking" prospects will become qualified prospects in the future. Not all of them will, of course, but healthy percentage could if the salesperson would spend the time to build a relationship with those prospects.

Last year we did a study with some of our clients to look at what was really happening with leads. We tracked every lead received by six different retailers from six different markets around the country for two months. Then we sat down and reviewed each lead with each sales person to find out what happened with that lead.

On average, the sales people could only tell us what was going on with 35% of the leads they had received. Of those, 7% were sold, 6% bought from someone else and 22% were still being worked by the sales person.

The other 65% of the leads were not being worked by the salespeople at all. In fact they had no way to follow-up with these leads because they had not even bothered to take down the information they would need to contact them a second time.

Of this 65%, the sales people reported that they thought two-thirds were not at all qualified, but they believed one-third to be well-qualified. We asked, "Why didn't you capture the information at least on the qualified prospects?" They said they thought they had, but couldn't find it anywhere.

Right off the bat this study uncovered two issues that if solved could completely turn around the sales numbers for any of these six retailers.

First, if your sales force is not capturing the information on qualified prospects in some kind of a system where that information will be safe from getting lost or misplaced, you have a big problem. It is not possible to follow-up with people if you don't capture their contact information and it is almost impossible to sell to qualified prospects unless you follow-up with them.

How big a problem is this?

These companies were "working" 35 out of 100 prospects and closing 7 deals so they were closing 20% of the people they were working. If they worked the additional 20 out of 100 prospects that they believed were qualified, but didn't have information for, that would be another 4 sales.

Could anyone use another four sales a month? I don't know anyone who couldn't.

The second problem is even worse. These sales people identified 46% (almost half) of all leads as non-qualified. As leading Sales Trainer John Underwood says, "That's a big claim, and big claims require big evidence." These sales people did not have evidence these people weren't going to buy - they just had their initial gut feeling. When we asked, we learned they did not run credit on these leads, they did not make proposals to these leads and they did not make any attempt to follow-up on these leads. Instead, they simply waited on them while they were on-site and then wrote them off because they decided on their own without any evidence that they couldn't buy.

These salespeople were mistaking the customer's lack of urgency for a lack of interest or qualification. A costly mistake! When we went back and contacted the leads ourselves to find out what they had done, we learned that almost 20% of these prospects did in-fact buy from someone within the term of the study.

So if 46 out of 100 prospects are being ignored or simply "waited on" by your sales force, and 20% of those people are buying from someone else, that is another eight or nine potential sales being lost to your competitors (and remember - we are also competing with builders and realtors to provide housing to these customers).

We have got to do better than this as an industry. You have got to insist that your sales people do a better job and then lead by example. # #

(Editor's Note: For articles by sales trainer John Underwood, type his name in the search box near the top right corner of this page. )

**You can find those articles here at MHMSM.com – MHProNews.com - or you can attend the free webinar that Rainmaker Consulting and Manufactured Home Source are co-sponsoring on October 13th to help dealers understand the steps they should be taking to tap into this Internet potential. (Call Chad at (800) 336-0339 or Derrick Hachey at (206) 364-4221 to find out how you can attend.)

Chad Carr is the President of Rainmaker Software, a second-generation family business that provides Retail Management Software and Consulting Services for the Housing, RV and Trailer markets. Rainmaker works with dealers ranging in size from five to six people up to some of the biggest and most well recognized names in the industry. Register for their free monthly newsletter at http://visitor.constantcontact.com/d.jsp?m=110294633464five&p=oi. If you would be interested in learning how to look at these and other ratios for your company, call Rainmaker Consulting for a free business analysis. We will look at your financial statements, analyze them and provide you with both the results and our feedback, all at no charge. For more information, visit their website at www.getRain.com or contact Chad at (800) 336-0339 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .