Are You Guilty Of Incentive Whiplash?

Are You Guilty Of Incentive Whiplash?

Dec 21, 2023 | By Jackie Lipinski

50% of Amazon consumers make a purchasing decision within 15 minutes, yet the average home shopping process takes a person about 4 ½ months (not including 30-45 days to close on the home). Despite this glaring difference, some home builders continue to approach their marketing strategies the same as e-commerce companies. 

Home builder marketing and sales operate on a different wavelength than the fast-paced world of e-commerce. Let me say that again slightly different and louder: HOME BUILDER MARKETING AND SALES IS DIFFERENT FROM E-COMMERCE. And that is okay. 

While our fundamental goals are the same—to entice customers and secure sales—the strategies and dynamics involved in securing those are worlds apart.

Here’s an example of what I mean: I recently had to buy a new purse, and when I went on the purse website, it said that my perfect bag was $250 -ouch! Well, I didn’t want to pay that price, so I signed up for email alerts to see if the purse dropped in price. 

Then I get a text saying, “Congrats here’s your promo code for $25 off $75+.” Wonderful, now the purse is only $225. The next day I received an email saying “Congrats, now the purse is only $110.” Awesome, but then I got busy and forgot to buy it. So the next day, I got an email saying, “Come back, the purse you have favorited is now only $75.” Now I’m thinking, that seems almost too cheap for the brand, but instead of checking out, I hesitated and wondered, hmm, can they go lower?

Then, the next day, I got a reminder that the purse that was $250 was NOW only $50 and it had free shipping! Yippie right? Well, sort of. The promotional incentives occurred so fast that instead of buying it immediately, it made me more hesitant to buy the bag at $50 than if they had stopped at $100 and kept hyping up the quality of the bag and how it was worth the price tag. The sudden blast of incentives gave me a term that I’ll refer to as Incentive Whiplash.

Of course, I hope this doesn’t sound like your home builder, but I’m signed up for countless home builder email notifications (many we don’t partner with), and unfortunately for some builders, Incentive Whiplash is very real.

Why You Don’t Want To Be Guilty Of Incentive Whiplash:
I get it; we all have sales goals to meet, but when we frequently alter incentives in too small of a timeframe, it can lead to more confusion than clarity for our customers, and it might prompt potential buyers to hesitate, expecting better incentive offers in the future. 

Lessons Learned From Incentive Whiplash Builders:
I’ve seen my share of Incentive Whiplash from builders, but the ones that take the cake are the builders who swap their incentives out about every week or two weeks hoping to attract new leads with their offerings. Why did they do it? 
  1. The marketing departments at the time were too heavily influenced by sales leadership versus them working together as a team to create a better strategy. 
  2. Their short-term incentive programs were the result of being overly reactive to what their multiple competitors were doing each week. 
  3. The sales team potentially had unrealistic sales goals for the timeframe, and they felt that constantly changing and offering different incentives was the only way to get new leads to achieve hitting the sales goals.
  4. They didn’t understand that incentives are best used as a tool to get people off the fence who are already in their sales funnel. They only sought to use incentives to create more leads and not focus on the leads they had already been working with.
The Issues Incentive Whiplash Can Cause: 
In the 2004 movie 'The Incredibles,' the villain's grand plan involved turning everyone into a superhero, his reasoning being that 'When everyone's a Super(hero), no one will be!' This concept also relates to home builder incentives. If a home builder constantly has discounts and endless incentives and shares them with everyone always, then none of the promotions will be perceived as special or noteworthy. Here are some additional issues I’ve seen happen to builders who were guilty of overpromoting their ever-changing incentives: 

  1. Confusion for Customers: A big issue was the customer’s perspective of the company. The incentives changed too frequently for customers to know what the current promo was and to have meaningful conversations around it. Like the constant barrage of purse discount notifications I was receiving, the customers also became expectant that if they waited longer the builder might have a better and more discounted offering on the homes. It also rattled the perceived stability and trust that the home builder knew what they were doing. Even Facebook's A/B ad tests recommend waiting at least 2 weeks of running an ad to collect enough data to recommend one ad over the other, so keep that in consideration when creating a timeframe for your incentives.
  2. The Impact On Internal Teams: It was a marketing team update nightmare for them to constantly update their promotions, update external sales teams on the details, and notify their interest lists properly. Picture this: If a lead walked into a model home and asked an agent if there were any current promotions, the agents might have to stop and research the incentive deal of the week and by not knowing what was happening or saying the wrong frequently-changed incentive, they run the risk of losing their credibility as a reliable source of information from the potential buyers. 
  3. Wrong Message For Where The Buyer Was In Their Journey: Incentives are most effective when used to persuade leads already in your sales funnel to help hesitant prospects make a decision. To use an analogy, think of incentives as a net used to help capture a fish that's already caught on your line. However, using incentives improperly is like throwing an empty net into the open water and expecting the fish to willingly jump in. 
  4. If You Can't Measure A Promotion, Then You Can't Improve It: For the builders that constantly changed promotional incentives, another mistake I saw was creating the wrong digital path for customers. They would create quick digital ads around the ever-changing incentives and then push the ads to point directly to their builder's “available homes” page of the website, a page with little to no context around the promotion that had drawn the customer in. It would have been better to send them to an educational page about the incentive (or a vague page to learn more about the builder’s current incentives) with a lead form fill where 1. They would have known how many leads had come through and 2. The Online Sales Specialist would be able to reach out to the lead immediately, set up an appointment for the sales team, and have the sales team members explain the offerings available.
  5. Unread Emails and Unsubscribes: If someone is signing up for email notifications on your website, they expect to get updates from you. However, bombarding them with irrelevant content, particularly if they are top-of-funnel leads, and constantly sending bottom-of-the-funnel incentive promotions, may lead them to unsubscribe. It’s crucial to understand what information is relevant to continue to maintain engagement vs. putting the email list in a neckbrace with your Incentive Whiplash. 
  6. Disruption to Current Contracts: A very real consideration to be aware of is if your offered incentive and marketing strategy isn't thought out, it can also hinder current contracts that are in place, causing existing buyers to want to renegotiate their deals. 
Home builder sales and marketing teams must work together to understand that rushing to change incentives too frequently risks losing trust, effectiveness, customer engagement, and the dreaded unsubscribed lead. Every incentive offered needs a game plan, goals, and an understanding of which audience you are trying to target with your messaging. Coming up with a plan together and maintaining a strategic and consistent approach in promoting your incentives is crucial to prevent Incentive Whiplash to your customers.

Online Sales & Marketing Insights Delivered Straight To Your Inbox

Get Free Insights