Follow-up is the Critical Precursor to the “Close”
Is your sales process truly centered on lead generation? Is your lead-to-conversion rate as high as it could be? According to research conducted by Marketing Experiments , up to 80 percent of sales leads are wasted on a regular basis. Lack of correct follow-up is one of the key culprits.
Follow-up is a critical component of the sales process, but it is often overlooked by the sales executive. Surveys, studies, and secret shopping tests have revealed that many new home sales executives are giving less than stellar performances when it comes to following up with leads. In one “secret shopper” study conducted last year, 64% of the sales executives failed to follow up with a prospect that walked into the model home. My own secret shops consistently show that less than 50% of sales executives will respond to an email inquiry, and the ones that do take entirely too long to get in touch. In any market, but particularly a highly competitive one, can you really afford to be so casual?
It is time for sales executives to stop blaming lack of sales on “traffic” and start maximizing every opportunity you have to follow up with a potential prospect.
You could be the absolute best “closer” on the planet – but if you don’t follow up with an email inquiry or phone call, you will never have your chance to work your magic. That’s the bad news – the good news is that there is a tremendous opportunity for you, right now, today, this month and this year in this economy! If you choose to implement and execute a follow-up process, you will crush your competition because they aren’t following up. The Marketing Experiments study estimates that you could boost your conversion rate by as much as 375% by working your leads more effectively.
After a seminar I presented at recently, a well meaning sales executive came up to me and said, “Mike, I have a 1,000 new leads in my CRM system in response to a marketing blitz, but I don’t know where to start.” My first reaction was, what a wonderful problem to have! I talked with her more and discovered that she didn’t have a process to follow up on the leads she was successfully generating. Instead of doing something productive, she did nothing at all. She had what is called “analysis paralysis”.
Now on the surface, it would seem that 1,000 leads is a treasure trove, but statistics show us that only 25-30% of internet leads will move forward in the buying process to set an appointment. That means, only 250 of this sales person’s leads would be qualified to move forward in the buying process. With no system in place for ushering a prospect from initial inquiry to the close, you have left yourself with a formidable task: trying to drill down to the customers who are ready, willing and able to move forward. However, when you create an organized process to manage your leads and follow up, you can quickly find those shoppers that are motivated and ready to take the next step.
Create a follow-up system.
The follow-up process should automatically begin when you receive a lead, which is someone sending an email or calling to ask a specific question or take some form of action. Here is the ideal opportunity to engage with a prospect. The absolute best thing you can do to increase the conversion rate is to respond immediately. If you don’t have the information required, at least establish contact by acknowledging the inquiry. In fact, a recent MIT study shows that you are 100 times more likely to connect with a prospect if you follow up to their request in five minutes or less. Worth the effort to check your messages continually, isn’t it?
Once you have quickly responded to this request, your potential prospect will fall into one of two categories: Response or No Response. If your prospect does not respond, switch to a short-term, follow-up campaign. This effort combines phone calls and emails. Plan to initiate seven to nine contact opportunities in the first month. Your goal is to invoke a response from the prospect, either by email or by phone.
After completing the short-term campaign, move the lead into long-term follow-up, intended to maintain contact and keep your name in front of the prospective buyer. Once a month, email new and helpful updates to the lead. The long-term effort is where you can outshine your competitors: 95% of them won’t continue to follow up after the first flurry of contacts. You never know when the customer’s current situation will change from curious looker to aggressive buyer. You need to maintain a digital presence so that you are always visible when the customer shifts into full-blown buying mode.
Your goal is the appointment.
The follow-up process requires a systematic approach. You have short- and long-term goals in this process. The first goal is to extract a response. Once the prospect does respond, you’ve passed the first hurdle.
You’re now ready to proceed with your process, but remember; the next goal of working with a lead via phone and email is not to sell a home, but rather to set the appointment. Let me reiterate, the goal is to set the appointment. Selling a home is a touch and feel process; the customer has to experience the home and community first hand. You can’t accomplish those things by email or phone. However, you can still learn more about their needs, ask qualifying questions, help them to select an area, community, or floorplan, all while conveying a sense of urgency and excitement.
When you sense heightened interest from the customer in these conversations, ask for the appointment. Half of the time, they will agree and set a time; the other half will provide a standard list of objections. Similar to the traditional sales process, you must be ready with your scripts in order to overcome the objections. Let them know that a brief visit will be the best use of their time in this process. Use your enthusiasm to excite them to react positively. Remember, if you can’t express excitement, how can you expect them to do it?
Ultimately, the perfect end to great follow-up and quality conversations is the onsite appointment. If you manage this correctly, the process will be smooth and streamlined and you will be able to close more sales each month while your competition still fumbles around in the dark. Create your follow-up process. Set goals for yourself. And go where many others have failed to go!
This article originally appeared in Sales & Marketing Ideas Magazine
Builders Unite for Social Media and Internet Training
This week was the first in the Social Media Boot Camp series and OSC University. It was a blast! We had over 75 attendees at the sessions. It was my goal to create an active environment where we could come together not only to talk about best practices and how to execute, but also to network and learn from others in the industry.
This was a phenomenal kick-off and I look forward to the other 16 live training courses.
For those of you who still want to get involved, don’t worry – the first live events are recorded and will be available for review. You can view the details of the upcoming courses along with the dates here Social Media Boot Camp » and OSC University »
If you want to peak behind the curtain – check out the tweet streams on Twitter here:
Tweet Stream – Social Media Boot Camp »
Tweet Stream – OSC University »
Also, a few of the attendees have sent their takeaways from the first live training events. Take a moment to see what they have to say. Leah Kaiz even wrote a blog about it here »
Social Media Boot Camp
Great job, I think you are providing a valuable service to home builders, especially those who haven’t yet started using Social Media.
Various tidbits that I think were valuable were:
- Don’t be afraid to start, it’s not that scary
- Start slow, get a feel for things, you can always build as you go
- Don’t get overwhelmed that there are 100’s of social sites, just start with the biggies (Facebook, Twitter, YouTube)
- Energize your base, start by connecting with your existing customers and Realtors (maybe send emails to invite them to join your social sites)
- Don’t spam with marketing messages, share valuable content (industry news, news about the economy, tax credit info, green building, charitable efforts)
- If you give a lot of valuable content, then it’s ok to slip in a little self-promotion here and there, still make it valuable though (Grand Openings, fun events, special incentives)
- Realize that your ROI is going to be different than traditional marketing channels (focus on building brand, awareness, building a community, interactions … etc)
Josh Fredrickson – Pulte – @pulte
At Mike Lyon’s Social Media Boot Camp I gained perspective on how to successfully engage with others via social media tools and confirmed my philosophy that social media is a communication tool, not a sales tool, best done in conjunction with a well rounded and diversified marketing plan.
Erik Cofield, CGA, Vice President – BuildTopia – @buildtopia
I enjoyed the session. In the past, other conference call courses were mixed topics which turned out to be a waste of time.
Your class was very informative. Obviously, the new social media is the place to be. We are starting to get on board. All the comments were right on the mark with our company requirements.
Dinah King – M/I Homes – Internet Marketing Consultant
OSC University
It was so refreshing to be in a "room" of people who totally understand my job, do it every day, and can stretch my imagination on better ways to do it. I learned that I’m not alone in some of the barriers I come up against in trying to do the best job I can, and I learned (well I knew) that there is always so much more to learn when perfecting your skills in anything. (Until you can hit 100% there’s always room for improvement!)
Hey and if you haven’t already done so, take a look at my blog about the class yesterday. http://leahkaiz.blogspot.com/
Leah Kaiz – Chesapeake Homes – Online Sales Counselor
Awesome call today, although my head is spinning because I’m discovering so many areas for improvement in our online sales counselor program! Worth the price of the entire series already. I can’t wait for the next call. Thanks!
Kathleen Murphy – Marketing Director – Peachtree Residential – @peachtreeres
I am so glad I signed up for your course! Being the sole OSC for my division, I find my role sometimes rather isolating so it’s important for me to stay motivated and up-to-date on best practices in an ever-changing market. Your course certainly provides that opportunity for me.
I was especially impressed with the gathering of other seasoned professionals and gleaned a lot of valuable feedback and insight from each of them. I am very much looking forward to your future classes.
Claudine Koh, CSP – Online Consultant – Standard Pacific Homes
Guest Post: Industry Best Practices Prospect Code List
By Erik Cofield
Every company, especially builders, should have a contact management system. A more advanced contact management system allows you to manage the relationships of your customers and is referred to as a CRM (Customer Relationship Management).
In these types of systems, including BuildTopia’s BTSales, one should have defined codes for all contact types, and stages of those types.
The list below is a basic list. For example, It can be even more sophisticated to include a code denoting the source from which the lead came. From the list below, instead of 08-B, one could have subsets such as 08-B-Web and 08-B-News, denoting a source of web and newspaper respectively.
The idea is always striving to push a prospect to a number 1. At a glance one can understand where in the buying process a prospect is, simply by looking at the number. For example, with the list below, a 9 is not as good as a 7, and a 7 is not as good as a 5, and none of them are as good as a 1.
Be careful not to use terms that are subjective in their identification, without the clarification.
Not every team member will think of terms such as “interested” or “immediate” in the same way, so those terms must be defined for whatever works for your company. The term “immediate” must be defined by a number of days so you entire team is using it the same way. Otherwise, your reports are meaningless.
Keep in mind your codes can, or even should, be alpha numeric. In the list below, Do Not Contact could be replaced with a high number, near the end of your total number, such as 99-DNC. The Bought Elsewhere could be numbered 98-BE, and so on.
In this residential construction specific example, a number 1 is the highest goal.
Having a numerical system so anyone can have an immediate feel for how important and relevant each contact (prospect) is, ultimately, will tie back in to your sales goals, and your profitability.
01 – Homeowner Closed and in communication Post Closing/Settlement and is in warranty
02 – Buyer Active Communication Prior to Closing/Settlement
03 – Design Center Communication Re: Selections
04 – Under Contract Newly under contract, but not yet approved or not a Buyer Active yet
05 – Be Back 2nd or multiple visits scheduled and kept
06 – Onsite Appt. Appointment scheduled and kept
07 – A Prospect Immediate Buying Interest (<90 days), and are ready, willing and able, but not a 6 or a 5 yet
08 – B Prospect 3-6 Months Buying Interest, maybe 2 out of 3 of an 01 prospect
09 – C Prospect 6-12 Months Buying Interest, maybe only 1 out of an 01 prospect
10 – D Prospect D for delayed. Still active, in process, on a long term follow up schedule
11 – Web Lead Registered via our website, but has not yet been engaged or qualified
12 – Unassigned The default people type code for all leads, not coming through the web
13 – Buyer Cancelled Communication post Contract Cancellation, is back to being a prospect, but held out as a separate type of prospect.
All Prospects This people type code cannot be applied to prospects. It is instead used to create campaigns that apply to all new prospects.
Do Not Contact Do Not Contact
Bought Elsewhere Bought Elsewhere
Erik Cofield, CGA, has leveraged technology and provided business management consulting for all sizes and types of builders, developers and remodelers since 2000, including volume, multi-family and custom, to help them improve their business. He is a Vice President with BuildTopia (www.buildtopia.com), a widely used international construction management software company. He can be reached via ecofield@buildtopia.com. Check out the blog at www.buildtopia.com/blog. Click on Articles
Encounters are the new “Visits”
Myers Barnes has a great post over on his blog – Visits are Out. Encounters are In—And Encounters Can Occur On-site or Online.
He comments:
In the old economy, prospects shopped by the process of elimination. They would drive around, build their short list and eventually settle on their new neighborhood and home. In today’s economy, new homebuyers shop by the process of exclusion on the Internet. They build their short list and then visit only the neighborhoods they are seriously considering. In building a list of places of interest, they will have many encounters. Each time they log on to your website, it’s an encounter. So they could easily have had 10 encounters with your new homes/homesites before you ever get the first opportunity to meet and greet them.
I can’t agree more. A good percentage of our prospects will spend more time on our website than we will! When researching one of the largest investments a person will make, the website and other listing sites become a “power tool” for the prospect putting them in driver seat.
Don’t give them a reason to eliminate you. Keep your site fresh, up to date and full of useful information they are looking for.
