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Agents, don't sell your product short

Show buyers why a home is worth the money, a sales guru urges home builders' sales staff.

By JUDY STARK
Published January 27, 2007

If you want to see Joe Colletti cringe, mention "incentives" and "givebacks" and "price." He hates those words.

Colletti trains home builders' sales staffs to sell more and faster. In this slow market, it drives him crazy when he sees sales agents giving away the store - make that the house - to make a sale.

"We're here to sell value, not price," he barked at a hotel ballroom full of builders' sales agents recently at a meeting of the Sales and Marketing Council of the Tampa Bay Builders Association. "We hand buyers a price sheet and what do they say? 'The price is too high.' We never show them the value of the house."

Buyers, listen up. This is a side of the story you never hear.

When builders run an ad announcing a price reduction of $10,000, the first thing a buyer will say upon walking in the model is, "Give me another $5,000 or $10,000 off."

"We create the atmosphere that we're losers. That we're desperate," Colletti said.

He asked his audience: How do you feel about those late-night TV commercials for personal-injury lawyers?

The response: Ambulance chasers. Tacky.

Then why, he asked, do we do the same thing? Would you want to deal with a brain or heart surgeon who announced he was the cut-rate king, the price-slasher?

Colletti, president of Colletti & Associates in Roswell, Ga., acknowledged there's a place for incentives, but it's not at the front end of the sale just to get people in the door. It's at the back end, where a skilled sales agent can offer an incentive to close the sale.

That's why it's important that agents ask the right questions and listen closely to the answers. He cited a study of recent home buyers showing that 80 percent of them had no intention of buying a home when they started looking at models. They weren't giving off what Colletti calls "B.S. - buyer signals."

But the fact that 80 percent of them bought a home within a year shows that there was a latent buyer in there, just waiting to be coaxed out by a good sales agent. Agents who focused on only the 20 percent who were giving out buyer signals were missing a huge share of the market.

The industry standard is that potential buyers visit a model center five times before they make the decision to buy. "That's pathetic!" Colletti said. "You're just going to lose them to another sales agent who's good."

Ask hypothetical buyers why they want to move and they might say, "We're downsizing." Some agents would figure that means they want to see the smallest models, and those agents might be surprised when they never make a sale.

But a persistent agent will press for more information and find out that when they say, "We're downsizing," this couple is really saying: We want to move out of our big single-family home to a maintenance-free community with good security because we like to travel. That agent will emphasize "our gated community . . . our in-home monitored security system, so you'll have peace of mind when you're on your cruise . . . the landscaping service we provide so you don't need to worry about the lawn when you're in Tuscany . . . that huge display wall in the family room, perfect for the pictures you'll take when you're touring the chateaus in France . . . and can't you just picture yourself entertaining your friends in this big kitchen, cooking up an Italian feast with the recipes you pick up on your trip?" Does anyone have a pen to sign the contract?

Maintaining credibility is the key, Colletti told his audience. Get the buyers off the fixation on price cuts and incentives and focus on the builder's reputation, years of experience, the warranty program. Tell your buyers: "We don't discount our homes because we believe the value is apparent in what we offer."

Sell them on why what you're selling is worth what you're asking. Colletti picked up a grinder of sea salt off the dinner table: This costs more than just a bag of regular salt. Tell the buyers why this is better, why the food will taste better, why this is better for their health, why it's worth more. Show them the value.

Remind them that it isn't a house, it's a home, where they will raise their families, celebrate holidays, enjoy their lives and mold their children's future.

And when a buyer asks, "What's the price?" the sales agent who warms Joe Colletti's heart will avoid the p-word and respond, "This home is valued at . . ."

[Last modified January 26, 2007, 11:12:31]