Since the dawn of professional new home sales, consumers have been effectively convincing salespeople that price is their most important concern. This is not a new behavior. However, the zeal with which homebuyers display their price-only mentality takes a great toll on company profits and the industry as a whole.
If you analyze this a little further, you realize that there is low cost and there is low price. There is high value and there is low value. And there is fair price and a good value.
When I ask a room full of salespeople what the number one thing is that a consumer wants today, what do you think their answer is? You got it — lower price. The majority of them say a homebuyer is looking for a lower price first, quality second and service third.
Now let’s switch audiences for a moment and ask a room full of homebuyers the same question. How do you think they respond?
The most frequent answers I hear are service first, quality second and a cheaper price third. It seems there is a perceptional difference in what new homebuyers want and what they actually tell salespeople they want. How do you explain that? By understanding the difference between cost and price.
Price is defined as what we pay for a new home. We write a check, use some of our savings and have just bought a brand new home at a set dollar amount (price).
Cost is what we will pay for the new home we have bought over a period of time.
Those who buy a cheap home will most likely have more service bills and higher emotional inconvenience — expenses that will last as long as the home is owned. They may have bought a home at a lower initial price but at a higher cost.
Think about it. When the new homebuyer says he’s shopping for the lowest price, in his mind he is thinking, “I want to pay a cheap price for a top-quality home that won’t give me problems and fulfill all my wants, needs and desires.” Hey! Get real! There’s no such animal. In his heart of hearts, the homebuyer knows this. So, although he is mouthing this, he must really mean something else.
If you interpret what homebuyers are actually saying, it is this: They want to pay a fair price for a new home that won’t give them grief in years to come. Their top priority is good service, which means they know they can trust the salesperson to “tell it like it is” — to give them the information they need to make an intelligent decision and not pigeonhole them as “cheap.”
In other words, when they’re saying low price, they’re really wanting lowest cost. Therefore, your job as a professional salesperson is to question them more thoroughly on what they really want (price — cost — value) and define the difference for them in terms of your new homes, neighborhood and service. This is defining value. And value is always “perceived.”
Each one of your prospects interprets value in his or her own personal terms. Therefore, your mission in new home sales is not to work at lowering the price of your homes, but to work at understanding how each prospect perceives value.
To effectively respond to the “price-only” mentality of consumers successfully, new homes salespeople must:
Become a construction authority, internalizing and memorizing every construction definition and term.
Know everything there is to know about the uniqueness of their homes in the marketplace.
Know the complete needs, concerns and wants of their customers.
Have the skills to match their homes to the needs, wants and concerns of each customer.
Have a general understanding of business.
Have high self-esteem.
Possess the ability to manage the emotional issues of selling and rejection.
Believe in the company and homes they represent.
Pretty tall order, wouldn’t you agree? Absolutely, but the rewards can be just as big if you understand the only true “secret” to professional selling is this: Ask constant, preplanned (scripted) professional and probing questions and then position your home(s) and service appropriately in the mind of the prospect.
One of my books, “Close Every Sale Without Fail,” was co-authored with journalist Shirley Mozingo, a real estate columnist for the Virginian-Pilot newspaper. For several years, she was a copywriter and later an owner in an advertising agency. As we discussed the importance of “positioning” yourself and your product in the mind of the consumer, she told me of an expression her grandmother used to say whenever she (Shirley) complained about life’s circumstances.
It was, “You can’t stop a bird from landing on your head, but you can stop it from building a nest there.”
That one-line philosophy applied to everything — from an impure thought to an injustice to a failed venture. Its interpretation? You may not have the ability to prevent something for happening, but you can reposition it.
In new home sales, you can’t stop a price-only mentality from landing in the minds of your buyers, but you can keep it from staying there by helping them to realize that they don’t really want cheap. They want value. They don’t want to sacrifice warranties; quality workmanship; square footage and livability; a lovely and safe neighborhood; interior color and product choices; amenities; convenience; prestige; and a number of other “hidden” advantages just to get a low initial price because it will cost them more in the long-run.
What they do want is a new lifestyle that doesn’t include the aggravation, expense and emotional turmoil that usually accompanies a cheaply priced home. Simply stated, they want a better life in a new home and you can give it to them. Show them that your brand new homes coupled with exceptional service can offer them what they really want and price will not be a hindrance.
If there is a “bird” beginning to nest in their heads, you want to make certain it’s the blue bird of happiness and not an albatross.