Recently as I was speaking with one of my online sales counselors, we were talking about community pricing and marketing. She told me the secret of creating happy buyers…
Ask any OSC out there and 99% of the time they will tell you their communities are marketed based on the lowest possible price. What that means is on the website, on signs, anywhere and everywhere that we broadcast a price, it says something like, “Buy a New Home with XYZ Builder starting in the high $300’s.”
What happens is that the smallest house, on the least desirable lot, with all the standard features and no upgrades can be purchased for $390,000. But all too often this doesn’t reflect the vast majority of the homes in the community.
Yet all too often there are lot premiums, the smallest house isn’t the most popular floor plan, and most people want an average of $50-$100K in options. Which means the real price of the house when all is said and done could be more like $500,000 or more.
Marketing is creating unrealistic expectations for buyers. OSCs become the happiness police. They must be the one to let the buyer down and give them a dose of reality.
This Marketing Approach Creates Several Detrimental Areas
Lowers Buyer Confidence: Immediately the buyer wants to know what else is hidden in the whole home buying process. If the pricing isn’t accurate what else is wrong? They feel it’s the old bait and switch. Who wants to have a reputation for this?
Wastes Everyone’s Time: The OSC’s spend time fielding calls for unqualified buyers who become more and more frustrated with the process, when they could be spending more time with qualified buyers and helping them along on the path to purchase.
Creates Unrealistic Lead Metrics: Sure, we may have received 200 calls this week about the homes in that community but often as we spend time with them, we realize they are totally unqualified leads. More is not better just for the sake of more.
Detracts from Real Opportunities: While OSCs are dealing with high volume of low quality leads they could be missing out on helping the truly qualified buyers as the deal with the crashing waves of disappointment with each buyer who really is only qualified to $300,000.
So, what was my OSC’s secret to creating happy buyers? They actually market their homes from a higher price point then they project. If the lowest priced home that can be purchased is $575,000 they market from the low $600’s. Or even better starts from the $620’s – $650’s. They KNOW that when you add in the lot premium and many of the options people want, they are likely going to be in the low $600’s at minimum. They create a cushion. And if someone gets into a house for under $620,000? The buyer is ECSTATIC and feels like they came away with a great deal on a wonderful home.
It behooves marketing to understand what homes actually sell for in the community, not what the base pricing is. This way they can set realistic expectations and attract the right buyer profile for a community. It may mean less leads, but it also means time better spent with the people who can actually afford a home in the community.
At the very least you should have ranges for a community on your website (Realistic ranges.) and have the starting price for each floor plan so that as someone is looking through your community, they can see that while your community may start in the low $400’s the floor plan they are looking at start in the low $500’s.
We really don’t want to attract buyers that have champagne taste on a beer budget. Find the buyers who are actually willing to pay what your house is worth.