Incentives, Discounts and Giveaways - Oh My!
We are all guilty. New home salespeople, marketing managers, builders and even a few consultants out there have fallen prey. We've whipped ourselves into such a frenzy over what incentives, discounts and giveaways to offer that we've forgotten the fundamentals of good sales and marketing. The irony is that our frenzy has the opposite effect on prospective buyers. The more frenzied we are, the less motivated they are.
I spoke to a group of builder presidents a few weeks ago. Much of the discussion in the room was in regards to what incentives, discounts and/or giveaways work the best to drive traffic and sales. I will tell you exactly what I told them.
>> Promotional gimmicks are like your Thanksgiving turkey after hours of cooking- stick a fork in the turkey, its done! Grand giveaways, i.e. a car with purchase, are no longer effective and do not net new sales. You only end up giving cars away to people who were going to buy anyway.
>> Incentives like paying closing costs are a dime a dozen. Consumers expect you to pay closing costs in a buyer's market. This promotion does nothing to differentiate you from the other guy or to create urgency.
>> Discounts train consumers that your price is not really the price. We've essentially trained a whole generation of homebuyers that new homes can be negotiated like a used car. Understand that the price you advertise now is just a "starting point" in the mind of the consumer.
So what is a professional marketer to do in a tough market? Get back to marketing the VALUE of your homes, neighborhoods and/or lifestyles punched up with a limited time promotion to create urgency. Sound familiar? You know how to do this! You just have to get back to it.
Why is your home worth buying? Why are your neighborhoods better? What is special about the lifestyle in your communities? Fill in the blank - Our homes/community/lifestyle is the ONLY ________________________ in the market. Whatever belongs in the blank-- that is the heart of your next marketing campaign!
Instead of running block bluster weekend sales, try running a 30 day campaign based on value with an incentive to create urgency. What incentives work best? Try solution based incentives that eliminate buying roadblocks such as fixed rate financing offers or guaranteed home purchase programs.
Finally, don't forget to train your salespeople to manage the wheeling and dealing consumers out there. Professional salespeople should never ever lead the conversation with your latest incentive. They must build value first! And, if the prospect leads with the incentive, train your salespeople to shelve the question until value has been created.
At the end of the day, most buyers buy because they believe your have the best home, community or lifestyle to meet their needs. Don't let your discounts, incentives and giveaways get in the way. Communicate value and you always win.