LOCKING UP THE MARKET

Article

By Carl Davidson of Sales & Management Solutions

One issue that many dealers feel strongly about is the image they project to customers. That is why the question of whether they should lock the homes on display or leave them open for unattended viewing is so important. We have surveyed our clients and want to report the pros and cons that dealers across the country told us they have found over the years.

There are two main reasons, proponents of open homes site. The first is

 the laid-back, no pressure image that open homes convey. Many dealers told us that especially their customers who are seniors prefer to walk through the homes on their own. The second benefit several dealers sited was the fact that you can handle a lot more people with a lot fewer sales staff of the homes are open. That way, the people look through and only tie up staff if they are interested or have questions. These are definitely benefits to take into consideration.

I have to confess that I am a strong proponent of locking the homes and controlling the flow of customers. As part of my research for this article, I toured several dealerships disguised as a customer to try to feel what your customer feels. I am now convinced more strongly than ever that locking is the correct approach.

Is there any other industry you can name that allows people to wander through their assets that cost $40,000 to $150,000 unattended? Certainly very few do. The reason is two fold. First, the assets need to be protected. That's a lot of money to leave open and unattended. Secondly, in an industry with that type of inventory, the sale is large and the inventory complex. The customer represents too much money to allow them to wander unattended and the inventory is so complex that few customers can understand and make a buying decision on their own. Try walking into an expensive jewelry store and tell them you hate pressure, so would they put out a few rings and allow you to browse on your own and watch their reaction. The truth is that most insurance companies would not be happy if they knew that the homes were left unlocked and unattended during the day.

As we travel around the country, we have noticed that the stores who leave their inventory unlocked tend to do less decorating and display in the homes. This is because they know items like dishes, crystal and flowers have a habit of disappearing. Also, sales can be lost when problems like carpet stains, unauthorized toilet use, cigarette burns and more happen and are not caught because the home is not in the care of an employee. There is no doubt that locked homes are usually better displayed and decorated and are usually cleaner and without accidental burn holes, stains or other blemishes.

The fact that most dealers who do not lock their inventory or control their customers say they do it to be less pressuring shows that they consider their sales staff to represent pressure instead of assistance. If you really believe that, you should re-train your staff in the art of consultative selling. Modern home inventories are so extensive and complex, that customers cannot make up their mind on their own. The old adage remains true - after a customer has seen 3 homes, they are so confused as to which model has which features, they will need to "go home and think it over". Dealers who let customers wander through 8 or 10 models get this reaction far more than they need to and are costing themselves plenty in sales they could be closing NOW! Have you ever wanted to buy something in a crowded store but had a few questions? Have you ever not made a purchase because you couldn't get a sales person to assist you? At that moment did the sales person represent pressure or much needed help? The same is true for your customers. If they are really interested in purchasing a home, they know they need assistance and appreciate having their questions answered.

An interesting exercise to try is the "customer walk". To do it, pretend that you are a customer who knows nothing about manufactured homes. Now, walk through your models and see if you would know enough to make an intelligent decision. Most people don't even know how much they can afford per month without assistance, let alone the fine points of construction, warranty, what is included in pricing, delivery times, other models available, options and hundreds of other points. That fact is, in our industry, customers need assistance to make a reasonable decision.

I also recommend that all the display homes be in one area and that they are only accessible when the customers walk through the sales office and are accompanied by a sales representative. The map shows a typical layout. There are several advantages to this style. The customers should be able to easily identify the sales office or "Welcome Center" through flags, signs and parking area. The couple only has to get in and out of the car once. The fence around the display models means that all customers must come in and out through the Welcome Center. That means even if you do allow customers to walk through the homes on their own, you still get to talk with them in the office before they can leave. Best of all, when the customers are through with their tour, they are back in the office and ready to sit down and ask questions. This type of layout is more convenient for the customer and the sales staff as well as being safer for the company assets.

I think you will find that if it is done in a friendly way, customers understand that the homes have to be controlled. They will especially appreciate your policy if they decide to purchase a floor model. In addition, many customers prefer to not be out in the extremes of weather looking through 10 or 20 homes they have no interest in if a skilled sales person can find out what they like and steer them in the right direction.

The next sentence you are about to read is critically important. You cannot manage what you cannot measure. The number one thing that dealers in our industry need to manage and measure is the number of people coming in to look at homes. Dealers who do not control their traffic flow have no idea how many people are coming in or where there are coming from. That means they do not know their closing rates and they cannot enforce a system where sales people must report the name address and phone number of each person who comes to the store to look at homes. In today's economy, it costs about $400 in interest, advertising and overhead for each person who comes out to look at product. Our work with clients tells us that less then 5% of sales people record this critical information on their customers. This means that as an industry we are wasting millions of dollars in advertising.

It also means that the company is giving up control. If you do not know how many people come in and closing rates, you cannot know who how many you should be selling and how much you should be making. In addition, stores that do not even know these basic numbers can never follow up on prospects to find out why they did not invest in a new home. This means they have no way of knowing if their display, sales techniques or prices are costing them business. In short, failure to control the traffic means giving up the ability to measure and control the sales department.

As we look through our client lists, it is clear that the companies who do control, manage and measure traffic far out sell the companies who don't. For all these reasons, we feel that assisting the client to make the right decision isn't pushy or aggressive, it's just good service for the customer and good business for the company. Remember that there is no such thing as pressure if a person is interested in your products and you are looking out for their best interests. So if you have been unlocked, think about giving better service and increasing sales by controlling your traffic.

 

Carl Davidson is President of Sales and Management Solutions, a company providing audio and video sales and management training cassettes for the Manufactured Housing Industry as well as live seminars. You can reach Carl Davidson: