Sunday, March 26, 2017

Stop Being Price Shopped

It’s a fact, if someone else can offer a home that’s virtually the same as yours, then you’re going to be price shopped.

Nobody wants to pay $2 for a pound of apples when they can get it for $1.

And nobody wants to pay $20,000 for the same car they can get for $17,000.

And nobody wants to pay $400,000 for the same house they can get for $375,000.

So if there are other builders offering a similar product or service to you, watch out…
You’ve entered the “Commodity Zone!”

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There’s no sense whining about it, price shopping is in your future and there’s nothing you can do about it. Your homes have become a commodity just like toilet paper or bread.

So how does a modular home builder escape the ‘Commodity Zone?’

You may know the popular expression, “If we do what we’ve always done, we’ll get what we’ve always had.” What we’ve always done is wait until the manure hits the fan — and then start crisis managing.

Builders are no different than any other type of business owner. You obtain a comfort level for your business and begin either matching what other builders are doing or sit by and watch your competition begin to match you.

When you start getting price shopped, it should be your wake up call that something is amiss with your business. You need to improve something about what you are currently doing that is inviting these price shoppers.

Sorry to tell you this, but in order to get out of the Commodity Zone, you have to change and change is never easy.

Which would you rather be?

The builder that sells a commoditised home where there is no way to differentiate you from others except on price?

Or

The builder sitting at the top of the proverbial mountain. The builder that selects his clients carefully, builds a home that deflects price comparisons and who commands an absolute premium for his homes and gets it?

A lot of builders tend to look at getting more leads as the best way to get new business when price shopping begins. The more leads you get, the better chances of making a sale. That has been the mantra of sales and marketing experts for decades. Get more leads, make sales.

With more leads. most modular home builders make the mistake of qualifying 'in'. Looking for reasons why someone would be a good fit. The smart ones actually qualify out – as fast as possible, leaving them time to work with good prospects.

In other words, you want to get rid of a bad fit as fast as possible, so you don’t waste time with them. This allows you to spend more time with people who are in your target market and are likely to want your product or service.

You don’t need a big batch of new leads, many of whom could be price shoppers. What you really need is a small set of highly qualified leads that really, really, want one of your homes and are prepared to pay for it. The first cull is getting rid of the 80% of those non-starter price shopper leads.

You want a small number of good quality prospects to deal with – new home buyers who understand the real value you offer and trust you to deliver it.

In short, it’s all about positioning and value, not price.
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You want to have people ascend from base camp, up the mountain, most falling by the wayside, till the select few reach you. These are the committed ones. They’ll take your advice, give you no trouble and be a joy to deal with.

It’s all a matter of choice. Be the commodity or be the Guru. You can’t be both.

A good example of positioning yourself to be the Guru is Harris Woodward, owner of Finish Werks in Savage, MD. He removed himself and his company from the Commodity Zone by embracing energy savings for his homebuyers and building only High Performance homes. He is considered to be the Guru of High Performance Modular Housing by many in the industry and uses this technical advantage.

Price shoppers can’t compare his homes with any other builder’s offerings and that is just fine with him. He owns his market.

Now take a hard, cold look at your leads. How many of them are price shopping you? You have one of two choices to make, undercut your competitor, get the sale and lose some or most of your profit or set yourself apart from the crowd and offer something that can’t be price shopped and make more money. Choose soon.

1 comment:

Harris Woodward said...

Thanks, Gary. It has worked well for us.

I'd like to recognize Ken at Express Modular for creating a division/brand that goes after Age-In-Place "granny pods", Kris at Dreamline for successfully offering mostly luxury custom modular homes, and Vaughn at Vaughn Buckley Construction for his exploding reputation in multifamily in Philly. These guys found niches that are under served, and are (or will soon be) dominating the competition. Heck - even Anthony Zarrilli has separated himself from the pack in south Jersey for having a well known reputation for customer service... people will pay more all day long when they have confidence in a builder.