How to survive a market slowdown
How to survive market slowdown
Whilst it’s taken a while for some people to want to admit it, for many, the market seems to be a tougher place right now.
Higher interest rates, a rising cost of living, the end of ‘Help to Buy’ and general economic uncertainty have created a perfect storm. So, what can we do to get our slice of a smaller cake and what should we be doing in a downturn?
Having worked as a sales and marketing director in the new build sector for over 30 years, I have seen most markets and worked with many of the major housebuilders of all sizes. Here are a few thoughts:
The must haves
- The highest levels of on-site presentation. Stand back and take a really good look at everything that you’re presenting to potential purchasers, as they will mercilessly judge you on every aspect. Get someone else to take a critical look and see it through fresh eyes, as new purchasers will. This includes your entrance, showhomes, stock units, and any build areas you intend to take people through. If anything is messy, shabby or unorganised, that’s the impression you will leave with your potential buyers regarding how you will build their new home – although they
probably won’t tell you that, you just won’t hear from them again.
- Lead management confidence. Whoever in your team is looking after the sales leads has to do a good job with contacting every single one ASAP, which means the same day. The longer you leave it, the more your purchasers will judge you. This is particularly acute in a buyer’s market where they will be getting VIP treatment from your competitors.
- The little details matter. Make sure your web page is correct and up to date, something that also goes for any signage, telephone lists, price lists, literature and anything else. Information that is incorrect or out of date will affect how you are viewed and perceived. You will be critiqued on what potential buyers see as well as everything they hear or read.
- Competitor awareness. Keep an eye on what your closest competitors are up to. Have they dropped prices? Increased incentives? What’s their sales rate? Are you losing buyers to them, and, if so, why?
- Mystery shop. Not just your competitors but also your own teams and representatives. It’s also good to inform them you will be doing this so they ‘roll out the red carpet’ for every single potential buyer.
- Keep pushing your best points. Whatever the advantage your product offers, promote it, whether it’s school catchment, transport links, a great social scene, or parks and leisure facilities. Don’t forget the plus points about your product, such as the high specification, large garden or garage.
Don’t sell, get bought
Achieving a connection with your purchasers has always been best practice but when there is the potential of a slowdown and less visitors around, it’s even more critical. The person(s) responsible for front line sales will need to show high levels of emotional intelligence to create the critical relationships needed to succeed. We all know the phrase “people want to buy from people they like” so if they don’t like you, and they can go elsewhere, they probably will.
According to top psychologists and business leaders, here are the things people desire in order to feel comfortable:
- Showing you are truly interested – feel free to call potential buyers yourself to evidence this
- Listening to their wants and needs
- Clear communication, going the extra mile
- Making them feel special and engaging on a personal level
- Being thoughtful and kind.
My experience with some of the best salespeople in the industry is that they truly want to help their customer. Once helping is the mindset, the selling becomes so much easier. Make potential purchasers feel more like a visitor to your home–it really is about how you make them feel. If you do it right, they won’t want to go anywhere else.
One of my favourite quotes that captures the essence of this is: “People may forget what you said, they may forget what you did. But they won’t forget how you made them feel.”
Do I need to reduce my price?
It’s a big question–and the answer will depend on a number of factors–but, mainly, the key issues are what you are offering versus the rest of the market, supply of equivalent product, and the level of demand in the area. If you’re not experiencing down-valuations, I would say don’t lower the price. Once the price is dropped, the benefit disappears
instantly as you have just set the property’s “real value”.
Rather than reducing the price, instead introduce some incentives, such as a mortgage subsidy of say £250 per month for the first year, free flooring, or help with legal fees. Don’t forget to push the things of value that already exist, like your specification, or, particularly in the current climate, the energy efficiency of your new home, which will save money on heating bills.
As counter-intuitive as this may sound, it may even be better to increase your price by say £2,500 and offer £5,000 of incentives, so that the cost to you is partially covered.
Don’t forget to talk about incentives and their worth to the buyer. Although you may be getting flooring at a trade price of £4,000, it may be £6,000 at retail rates–so the latter figure is what the offer is actually worth. Additional specification like fitted wardrobes, upgraded tiling or fitted appliances are universally loved by all purchasers and the retail value is more than you’re paying, so this is a great way of giving a really desirable incentive, but one that’s not costing you the full value.
There will always be buyers in any market, but you might have to work smarter and harder to capture your share. Be aware of how you are promoting yourself with everything you do or say. List all the reasons to buy, and make sure people understand all your plus points. Treat potential customers like friends, help them and get close to them. You can survive a slower market, and even prosper, if you understand what people want and how you can help them get it.
People may forget what you said, they may forget what you did. But they won’t forget how you made them feel
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