For every profitability hole, there’s a gullibility plug

When profits and sales drop, a naive mindset fills the void. Builders start thinking they need to sell more houses and offer more discounts to make up for the loss. So they offer jaw-dropping deals. Incentives. Promotions. Special sales. Discounts. Event sales. A whole bag of tricks to lure buyers. And what happens? They sell more homes, but make less money.

Most builders say, “Hey! I’m a builder. It’s what I do.”

I understand that, but you must also be heavy into sales and marketing or you won’t be around long to do what you do.

Building and selling homes at a discount isn’t a viable strategy. That’s why, at some point in your company’s growth cycle, you have to determine, “Is my company being market driven or sales driven?

How do you know which one it is?

Think of your company as a boat anchored in the harbor beside 100 other boats. When the tide rises, all the boats go up. When it falls, all the boats drop with it.

The housing market is like tidal water. It goes up and down. If your company is governed by the market, it will follow the ebb and flow … rising and falling just like the other boats.

However, if your company is sales driven, you will pull anchor and leave for more favorable waters. Instead of trying so hard to steal buyers from other builders whose ships are anchored with yours, you will find buyers in areas that other builders have neglected. You will show in places where buyers least expect you. And you will attract buyers from the tidal pool because you have a superior sales and marketing organization.

Don’t be lured and lulled into believing that discounting is a smart marketing tool. If there’s a hole in your business that’s leaking profits, you won’t plug it by being gullible and thinking your can discount your way to profitability. That’s like rearranging the furniture on the deck of the Titanic when it’s sinking. It’s wasted effort.

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