Tuesday, December 11, 2012

5 Ways to Weather a Slump in Sales

If you are in the modular housing industry, either as a builder or factory person, you know that this business is cyclical. Sometimes it’s booming and other times it’s not, but neither state is permanent.

The difference is that while business is booming, your biggest concern is meeting the needs of your builders and their new home buyers. When things are not, you may be scrambling to keep everything on track.

Here are 5 suggestions about what to do and what NOT to do when new home orders begin to slump:

1.  Keep in Touch with Past Customers

When business is going great, you tend to forget past customers who helped you get where you are today. Yet when things slow down, they can be your safety rope. Now is the time to drop them a friendly email or call them with a pleasant message.


For modular factories, this can be the time to mend fences and ask it there is anything you can do to help your builder. A lot of sales reps forget that when they are busy, their builder is usually slow and when the factory is slow, the builder is busy finishing the houses that were shipped in the last 3 months.

I've seen factories with only enough orders to keep the production line running 2 days a week begging for builders to buy houses. Remember, builders don’t by houses, their customers do and historically they only want to build new homes several times a year.

2. Avoid Cutting Prices

When sales go stagnant, you may be tempted to boost sales by dropping prices. While this might seem like a good move to increase sales, the builder’s buyers are usually not motivated by a “Winter Sale” price or a pre-Price Increase sale. These will only get you the sale you probably would have gotten anyway but now you’re not making as much profit.

The only segments of the housing industry that can use this are the developers sitting on unsold units and the mobile home factories that can build a house to order in less than a week without all the restrictions of building codes except HUD.

Remember that once you lower a price, it’s super hard to take them back up.

3. Make Budget Cuts Very Carefully

When revenue is dripping in instead of pouring, you may need to trim some budgets, but be careful to make those reductions wisely. Your first instinct may be to cut back on staffing, distribution, or customer service. While these changes may help in the short term, they may cause you to lose clients in the long run.


Never make any budget alterations that might end up hurting your customers and costing you business.

4. Never Skimp on Quality or Quantity

Two things determine customer satisfaction: quality and quantity. If you are trying to cut corners in order to save money, you may consider making alternations in these two vital areas.

However, doing so may throw your business into more peril than any temporary downturn in the cycle. When you provide services or homes which fail to meet the builder’s or their customers' expectations, you put yourself in a position to lose repeat business, and repeat business is where the money is.

Also, remember that happy customers are likely to tell others how satisfied they were with your company. Likewise, unhappy customers typically don't hide their dissatisfaction. Maintaining your current level of quality and quantity, or even increasing it, should be among your top priorities.

5. Never Appear Desperate

People like to do business with those who are successful. Therefore, if you approach potential builders with the air of desperation in your voice, you are more likely to scare them away than enlist their aid during this difficult period.


Examples of desperation may not just be obvious in what you say to your customers but also in what you do. For instance, if you significantly reduce your quote in order to secure their business, you may be sending them the wrong message. Stay positive and optimistic. After all, nothing attracts business like a good attitude.

1 comment:

Anonymous said...

Coach, you always have good articles about how to keep positive even in the worst of times.
Thank you.