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Warning: I’m about to offend people (especially managers) by challenging some of the decisions that are being made in response to market conditions. I’m prepared to deal with that wrath. But please, consider the message before shooting the messenger!
The challenging market means we need to re-think everything we do and every dollar we spend. That makes total sense to me; it’s just smart business to be as effective as you can, especially when it comes to cost cutting.
Unfortunately, far too many decisions are made in the fashion of the proverbial knee-jerk method. Critical programs are cut in the name of saving money, even though the programs are commonly revenue generating.
Time to re-consider some things. As an industry observer, here are four market response strategies that, I believe, are shortsighted.
Closing Offices
Ask any retailer on the planet about closing the doors to save on labor costs and they’ll look at you like you have a hole in your head. Retailers exist on one thing: traffic through the doors. Close the store and shut off your supply of traffic – it’s that simple.
A good temporary representative is an inexpensive alternative that can capture a prospect’s information and get that customer in touch with someone who can take them to the next level. At the very least, a prospect who takes the time and makes the effort to find a sales office will not be punished by finding the place unattended. Believe me, they’re not coming back to give you another shot at your convenience.
Good temporary representation will cost you a few bucks an hour, so you have to ask yourself whether it was worth the savings if someone pulled up, looked around and drove off. So try this little experiment: take some work or a good book and park in front of the models on a day the office is closed. Watch the look of your prospects as they pull up, get frustrated, and drive off. That might be all you need.
One last thing: some say that temporary representation is so poor that it’s not worth staying open. I disagree. I’ve met many of JoAnne William’s temps in new home sales offices who were every bit as effective (in many cases more so) than full-time agents I often run across.
Cutting Training
Okay – I know this sounds self-serving, but think of the reasoning behind this statement: “We aren’t getting the sales performance we need, so let’s cut the training budget.” Huh? Does that confuse anyone besides me?
It’s one thing if you are finding sales training to be ineffective. But good training should pay for itself with an immediate increase in sales. Training returns many times over in a direct increase in revenue, and a savings in incentives when salespeople are well-prepared to perform at the highest levels.
Piling More on the Sales Manager
Somehow the position of General Sales Manager has become the catch-all for the industry. I see sales managers who are totally consumed with meetings, paperwork, contracts, crisis management, customer complaints, and a thousand other details. And here is my question: Who is out there helping salespeople write more deals? Who is coaching? Who is challenging the salespeople to perform at the highest level? Who is making sure that incentives are used wisely, and that new prospects are given the opportunity to purchase?
We need to seriously re-think what our sales managers do. Their job should be focused on one overriding objective: Lead Conversion – making sure that every possible lead is converted into a sale. That job cannot be done from behind a desk.
Cutting Back on the Web Presence
If you see web advertising as a cost, you'll do what typical managers do - minimize the cost. If you see it as a money-making asset, you'll support it. When it comes to web presence, there is almost no justification for cutting costs in this highly efficient medium. The only question is whether the money spent is going in the right places.
For example, many search engine web sites charge you a monthly fee for placement regardless of performance (which is often difficult to measure). But using a search engine that operates on a pay-per-click model (newhomesdirectory.com, for example), you pay only if the prospect clicks through to your website – that is, you can track your costs in relationship to your activity.
In any event, cutting back on your web presence might be the most confusing of all the cost-cutting initiatives in place today.
But Jeff, our finance guy…
If you’re in sales and you’re reading this, and if you’re agreeing with some or all of these points, it’s time to put your sales skills to work in convincing the powers that be that saving money at the cost of making money is no savings at all. The business world is littered with the remains of companies that have attempted save pennies at the risk of losing future dollars. Sales and marketing is not an expense – it is an investment!
END
Jeff Shore provides new home sales training
and is regarded as a top trainer of new home sales agents and new home
sales managers. Thank you for allowing me to re-post your newsletter
on this blog. This is great stuff. Jeff Shore has had a tremendous impact on my life as well as the lives of many others. If you can catch one of his seminars, do it. The cost is little and the improvement of your skill set is great. Check Jeff's schedule here. Thanks again Jeff, Jim Adams.
