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
#pcbc09 Tweetup Video Post
We had a great time at booth 2134 and the official #pcbc09 tweetup – spearheaded by Rob Bivens @rbiv from Golden State Lumber (yes, a supplier people!) I put together a quick video highlight of the event. I asked a few of the folks there how they and their companies were using Twitter.
At the tweetup:
@juliesenter
@allijb
@cassandragrauer
@rbiv
@jim_adams
@graphiclanguage
@carolruiz
@bialav
@hometeam
@wwpa
@summerhillhomes
@jonjonbailey
I feel like I have missed some. Were you there? Leave a comment.
How to Measure Your Traffic Sources
As you explore what new home listing services to utilize, it is extremely important to measure the results. It is not just about the amount of traffic but the quality of the traffic. Last week I created a poll and shot it out via Twitter & Facebook to over 1000 connections. The results are below.
Interesting results. Let’s look at the ways you can determine the quality of traffic using your website analytics. Here are a couple of key metrics you need to pay attention to:
- Visits
- Pages Per Visit
- Average Time on Site
- Percentage of New Visits
- Bounce Rate
Let’s use the example below to review.
| Traffic Source | Visits | Pages/Visit | Avg Time on Site | % of New Visits | Bounce Rate |
| Traffic Source A | 235 | 12 | 10:00 | 69% | 20% |
| Traffic Source B | 150 | 5 | 6:00 | 10% | 50% |
What story are these analytics telling you? Based on the key metrics, a visitor from Traffic Source A would be a more qualified unit of traffic than Traffic Source B. That doesn’t mean you need to cancel all traffic sources that don’t match the top producing sources. You just need make sure you aren’t paying too much for less qualified traffic.
You can also go one step further when you set up a "Conversion Goal" in your analytics. Basically, this measures conversions and tracks it back to the referring sources. This is another great metric to look at but you shouldn’t base all of the decisions on a conversion. Many people will find your site through a certain traffic source then come back later and fill out a contact form – making it hard to tie that conversion back to the actual source that they discovered your site through.
The web has given every marketing director a higher level of accountability.
P.S. I have been talking with a lot of builders lately who are presented with online advertising campaigns that are solely based on "impressions". Essentially, impressions refers to how many times the builder’s ad will show up in front of someone online. Be very careful, ultimately, you need to measure performance on click throughs – not impressions. That will tell you if your ad is getting in front of the right people. Showing an ad to someone looking at cars online is not your target audience.
Guest Post: CRM Is Your New Best Friend
Building Customer Relationship Management Software into the Sales Process
By Dave Clements of Lasso Data Systems
Other than idiosyncratic and superstitious quirks, like wearing the same clothes underwear from the grand opening until you make your first sale, there aren’t too many secrets left in the new home sales process. There is change, constant change, and evolution as we all adapt to the new communication avenues present on the internet. But at its heart, selling a house is still selling a house—connect with a prospect, show off the property, do whatever it is you do to sell, and then close the deal.
For a long time, customer relationship management (CRM) software was one of the last and best-kept secrets in real estate home sales. As is often the case, the real estate homebuilding industry took a while to understand embrace and adopt this new technology. Today, there is an accelerating trend of many developer and homebuilder real estate sales teams are embracing CRM and realizing the benefits of having a centralized database of prospects and buyers leads accessible across their organizations.
Why employ CRM, and how can it benefit a sales team, and help convert leads and close contracts? Here are a few reasons why a robust CRM solution can become a sales team’s new best friend.
CRM keeps information consistent and centralized. Even the most social media-friendly sales organization may still be relying on outmoded spreadsheet-based systems for tracking their leads. Information needs to be copied across multiple documents, increasing the likelihood for error and resulting in inconsistent, inaccurate often outdated data.
With a CRM solution, a centralized database is created, and through the CRM, parties across the organization can update the same information in the same place. Departments can also share information more effectively about prospects or buyers—if a customer service rep has a conversation with a buyer about an amenity package, that can be noted in the customer record so that the salesperson is never out of the loop on any communication with his or her prospect.
More importantly, that database remains consistent and complete even as one project community closes and a second the next project opens up. Many builders right now are facing difficulties selling out projects, moving those last few homes that will take unoccupied homes off the books. A CRM database can help by providing an instant “interest list” for new projects or existing projects that still have homes available. A quick e-mail blast to the entire database can reach those who may have recently resumed a new home search, providing fresh new leads from a database of those who may have once seemed like lost opportunities.
CRM enables effective follow-up. A CRM system is like an instant “to-do” list for a sales agent each day—they can easily access an up-to-date, accurate, complete list of all of their prospects, as well as a listing of when each was last contacted. Using that information, sales professionals can determine who needs a phone call or an e-mail, who should make an appointment to come into the sales center, and who may be close to closing on a home. From a management perspective, CRM can help create a culture of accountability, since the CRM can be used to track how each salesperson is progressing with their active leads. Managers can use this information to help facilitate the sales process and work individually with each salesperson for constructive coaching and personal development. growth.
CRM facilitates marketing. Today, a robust CRM system will serve double duty—it will provide an amazing resource for a sales team and a consistent lead database, but it will also have e-mail marketing capabilities built in. This allows the marketing team to send messages directly to the lead database without having to employ a separate or external systemolution; it also helps streamline the lead tracking process, as each e-mail sent will automatically be noted in automatically as a history item in each lead’s profile. record in the system. Sales professionals will know when each e-mail went out, which prospect opened or forwarded the e-mail, and what the contents of each e-mail was—this is invaluable information to have when performing follow-up calls.
CRM is more than just the best friend your real estate sales team ever had—it’s the technology “bridge” between old-school selling techniques and the rise of Web 2.0 and social media services. With CRM, no lead gets lost, and no sale is missed—every piece of information that comes through the sales team can be documented and stored. It’s an invaluable resource, and any sales team serious about converting leads should investigate it.
Dave Clements is CEO of Lasso Data Systems, a leading provider of customer relationship management solutions designed for the specific needs of the real estate industry. He blogs about real estate sales, marketing, and technology at blog.lassodatasystems.com
Predictions from Seth Godin
For those of you who haven’t heard yet – Seth Godin will be presenting at PCBC this year. I am pretty amped about this. It is exciting to see this industry embrace his theory.
On that note – a recent post from Mr. Godin (may I call you Seth) highlights a few predictions:
Prediction: there will be no significant newspapers printed on newsprint in the US by 2012. So, you’ve got two and a half years before the newspaper industry is going to be doing something else with the news and the ads, or not be there at all. Does that change what you do today if you work in this business?
Prediction: 90% of your sales will come from word of mouth or digital promotion by 2011. How do you change what you’re doing today to be ready for that?
Prediction: The effort required to outsource a task involving the manipulation of data of any kind will continue to decrease until it will be faster and cheaper to outsource just about anything than it will be to use in-house talent. What will you do today to ensure your prosperity when that happens?
He makes this statement at the end, “It seems to me that if you know the old world is about to end, you’d run like crazy to master the new one.”
Now – Seth has been predicting for a while now – and so far, has a pretty good track record. In the home building industry, I think we can all learn from these predictions.
As I have been saying for the past year – I think there are builders that are finally in enough pain that changing is actually a better option than remaining the same.
I have a prediction as well, savvy new home building companies will be formed by younger principals that “get” internet marketing and the new consumer. They will find capital and buy up cheap lots becoming a competitive force in new markets – seriously challenging the larger builders. Do you have any predictions of your own?
