“Always put the customer first.” So said Ray Kroc, who turned this simple edict into a billion-dollar business. It seems clear and direct enough for anyone to emulate, yet it often gets lost in translation.
For example, in real estate development, everyone working on a project, from the builder and architect to the contractor and legal counsel, has their own objectives. Real estate developers have little time to spare as they work to wrangle all the stakeholders in place to get a project going and keep it on track. In the flurry of activity, the ultimate goal—to build multifamily buildings, condos or single-family homes that will be so appealing to prospective residents that they rent or sell—kicks in too late in the game for them to put the customer first.
Real estate sales teams, hired to sell whatever eventually materializes from the development process, are often left out of the process until it’s time to start engaging prospects. They cobble together marketing strategies for products that have already been designed, which ignores prospective buyers’ true needs and wants, at least initially. And it isn’t always possible make amends.
Instead, residential developers should embrace “selling right,” an approach to new development marketing and sales that puts the prospective buyer at the center of the development process from a project’s inception. Doing so requires the marketing and sales team to be onboard from the very start, since they have the most intimate understand of buyer needs and wants, and what will and won’t sell or add value.
Bottom line, the buyer must be at the center of every decision in residential development, especially in high-stakes projects such as luxury condos and highly customized single-family homes. Maximizing sales velocity at optimal prices requires an approach to sales that goes far beyond the traditional marketing campaign. Selling right demands an approach to development that is buyer-centric from start to finish. Our six-step guide to selling right explains the process and the benefits it offers.
1. Bring Sales Teams On at a Development Project’s Inception
Seasoned sales professionals have worked on dozens of developments. Thanks to their experience, insight and the kind of real estate analytics and market research available today, their knowledge and insights on specific target groups and markets can save developers from making mistakes as well as enhance the quality of their projects they plan and execute. This leads to superior results, including higher sales velocity and better pricing. From a development’s amenities, and the mix and size of units to unit design and layout, sales teams can bring the prospect’s interests to the center of the development process long before a sales campaign gets underway.
The perspectives and insights of the developer’s sales team should be integrated into the new development process from the very start – before designing a development and its amenities, and definitely long before breaking ground. A real estate developer must rely on a sales team to understand the product and the competition in order to successfully integrate prospects’ feedback and to work out solutions that will overcome objections and, ultimately, close sales.
The idea of including the professionals who will be actually selling units or homes in the design process seems revolutionary; yet in truth it makes prefect sense. Experienced sales people will be most intimately familiar with the prospects – what they want, what they need, what they’re willing to pay for –and will have actionable insights to aid the design process. Yet developers rarely engage their sales teams, even during late-stage design conversations.
2. Build Marketing Campaigns That Understand the Buyer
As a new real estate development transitions into the marketing phase, developers turn to their sales teams to devise a marketing plan. Successful sales strategies are based on a deep understanding of prospective buyers. Again, data analytics come into play, as well as boots-on-the-ground reconnaissance, focus groups and the insights of seasoned local brokers. Only then, a marketing campaign can be laser-focused on the most promising prospects, engaging key buyer triggers through targeted advertising and direct outreach.
The experience of the potential buyer is of paramount importance; they must feel comfortable, and believe that the salesperson is working with them to find what they truly want rather than working to force a sale for a commission. A focus on messaging that is clear and consistent is vital. Taking time to explain a marketing strategy to agents and brokers results in a consistent message reaching prospects. The first step to overcoming a rejection from a prospect is to articulate a value proposition that is clear and concise, according to HubSpot. To do so, a sales message has to be clear, simple and upbeat. Faced with a unified brand that they can understand, and that does not present mixed signals, prospects will be put at ease.
The Internet has opened tremendous opportunities to developers, allowing them to leverage state-of-the-art online marketing strategies in real time. Yet they must also be wary of the fact that as the amount of person-to-person interaction in the sales process is diminished, they risk muddling their campaign’s desired message and tone. In online sales, tone can easily be misunderstood, and nuance lost, making carefully crafted messaging more important than ever to the success of a new development. Furthermore, the Internet has transformed many development marketing campaigns, even for developments in suburban communities, into regional, or even national, campaigns. This has opened a larger and more diverse pool of prospective buyers for every development. Yet it has also exacerbated the challenges of creating campaigns that resonate with a wide audience that can have several, or many, segments.
Additional challenges have emerged as the U.S. has become more multicultural. The latest census data shows an increasingly multi-ethnic population, according to U.S. News & World Report. Latinos, America’s fastest growing ethnic group, are experiencing a boom in homeownership, and are projected to make up 52% of new homebuyers between 2010 and 2030, according to Curbed. An increasing number of bilingual or multilingual communities places further demands on marketing and sales professionals. To succeed in this changing world, developers must turn to sales and marketing teams that are keenly aware of cultural sensitivities.
The most compelling development sales programs never forget the human element. Yet many real estate developers rely on processes that neglect the prospect as an individual. They are designed without a living, breathing person mind. Instead, every potential buyer is the same cookie-cutter placeholder to be ushered through a predetermined script. The result is the alienation of many prospects who, if their individual needs and identities had been understood and accommodated, might have been buyers. Selling right requires an understanding of the expectations of different groups across demographics, ages and geographies.
By thinking in terms of buyers’ varied life experiences, developers can design and execute marketing strategies that will appeal to all their top prospect segments.
3.Break Down Fears of the Unknown
Whether dealing with houses or condos, the perpetual impediment real estate developers face is the fear of the unknown inherent in any new residential development. There are simply more question marks around a development that’s in progress compared to an existing property. Humans are risk averse animals that fear the unknown, as the Journal of Anxiety Disorders and numerous scientific studies have demonstrated. People often opt for what they know over something that may turn out to be better.
Many prospects interested in new developments are willing to take the risk that it will sell out before they can secure a unit if it means they can wait and see the unit firsthand. When dealing in real estate, our research shows that there is still a strong inclination to see, touch and experience a home before agreeing to buy it.
To address buyers’ fear of the unknown, real estate developers must be prepared to answer a lot of questions in order to close a sale—and be ready to address questions for which there may be no definitive answers. Some things are within a developer’s control, to an extent, such as projected completion dates and whether the final unit product will appear as advertised. Yet others are beyond their control, such as interest rates at the time of close. Regular updates to buyers and engaged prospects detailing the number of units under contract, for example, would help mitigate one of the major concerns about new developments, namely that too few units will be sold for the project to move forward at all.
However, it’s not all an uphill battle for residential developers. In the luxury space particularly, as Mansion Global reports, buyers have found that buying off floor plans can lead to greater unit customization and lower prices.
A number of demographic and cultural factors have also helped break down some of the barriers to closing new developments sales. Millennials, a footloose generation that’s used to conducting both personal and business life online, are far more open than previous generations to buying homes site unseen, according to a recent survey by Redfin. Developers hoping to sell to their new developments to this digital cohort must engage them in their own environments and through their own frames of reference.
4. Mine Local Broker Networks to Win Over Buyers
A common bad habit among residential developers is a tendency to avoid the brokerage community. Yet residential broker networks can be powerful resources, bringing in buyers through their extended networks. Developers’ sales teams have to devote significant time and energy to building alliances with the local brokerage community, and educating them about their product; this is an investment that pays big dividends. A community of brokers clued into a development’s marketing strategy is essentially an unpaid army spreading the word about the development.
Brokers can be a force multiplier for a developer, provided their dedicated sales team knows how to use them properly. Broker networks are only as effective as the training and materials with which they are armed. A skilled development marketing team will provide all the content and marketing assets they need to send to their clients – removing all possibility of ambiguity or misaligned messaging.
Residential brokers have deep ties to the markets they serve and are customer-oriented by nature. A top-quality development sales team with a national perspective can tap into that local knowledge, supplemented with independent data analytics and market research, to identify and reach prospects and ensure that their needs are addressed in a highly personalized fashion.
Effectively leveraging the brokerage community is a win-win-win scenario. The developer is happy because they get access to an expanded sales force. The broker is happy thanks to commissions from closed sales. The buyer is happy because they were brought a deal from a broker they know and trust.
5. Turn the Developer into a Selling Point
As developers build out their marketing strategies and sales teams, they must understand that they are dealing with real people, many of whom have had negative experiences with real estate in the past thanks to the Great Recession. Also thanks to the financial crisis, Millennials have delayed home ownership—a boon for multifamily development but a challenge for new home sales. However,
Millennials have emerged as the largest group of homebuyers since the Great Recession, CNN Money reported recently, a trend that has shows no signs of abating. Developers must be aware that they are facing a market still scarred by memories of the financial crisis and in some cases, budgetary constraints.
Before the financial crisis and subsequent Great Recession, developers tended to work through agents rather than engaging buyers directly. Yet today’s prospective buyers are more mistrustful of their motives, so residential developers must work actively to dispel negative perceptions. To overcome greater apprehensions, developers’ sales strategies need to address prospects’ genuine anxieties by demonstrating honesty and offering transparency.
If told correctly, a developer’s story can be turned into a powerful asset for a sales strategy, appealing to the Millennial generation’s attraction to “authenticity”, according to Digitalist Magazine. Sales and marketing teams that work to humanize the developer by connecting them to the neighborhood or city in which they are building, for example, can have a profound impact on the attitudes of prospective buyers. Also, developers who can express genuine passion for their projects, not just for their financial rewards, can build goodwill. Sales teams that can successfully foster a sense of connection to the developer can swiftly transform a prospect into a buyer.
6. Keep Buyers Engaged After the Sale
The final step of selling right is the recognition that the salesperson’s job does not end when the prospect puts pen to paper. In a new development, there is always the risk that buyers will get cold feet and back out, or will get frustrated and potentially disrupt further sales. Keeping buyers happy is essential to an orderly sales program — and buyers are happiest when they are fully engaged in the development process.
Developers benefit through actively engaging buyers since it gives them more control of the information flow, and thus puts them in the driver’s seat of the narrative surrounding their development. Prospective buyers will hunt for information about a development. If a developer is not forthcoming, they lose control of the story. Integrating active communication through a range of channels, including social media, can keep the developer’s vision at the forefront rather than the opinions of uninformed journalists and anonymous online commenters.
Developers can put on a range of events and activities to keep buyers engaged. Our research has shown that events offering an air of exclusivity and luxury are particularly effective in keeping buyers engaged and happy, such as exclusive dinner events for buyers featuring keynote speakers such as local influencers in business, media and politics. Such events can make a buyer feel comfortable and excited about what they are buying. Progress tours, either personalized or in groups, can also bolster confidence and keep buyers happy with their purchase.
The Key to Success: Putting The Buyer First. Always
In the high-risk, high-reward business of residential development, everything comes down to selling right. That means putting the interests and needs of the buyer ahead of all other considerations. Developers must incorporate a buyer-centric view from the earliest stages of a project, which means bringing a dedicated and knowledgeable sales team into the process from the start.
A winning sales strategy does many things: It informs design, reaches prospective buyers through an expansive network, converts developers’ strengths into selling points, anticipates and deflects liabilities and engages buyers from start to finish. Developers must choose their sales team and develop their projects with absolute care and selling right in mind, as it may well make the difference between their project’s failure or success.