Is Your Sales Process Creating a "Buyer-Beware" Environment?
by Donald Davidoff | Oct 25, 2018 12:00:00 AM
Fall is upon us. As usual for multifamily operators, Halloween preparations and pumpkin spice treats provide the backdrop to the main event - next year’s budget. As we grind through the seemingly endless iterations of revenue and cost numbers and reconciliation between properties and central teams, at some point the light will appear at the end of the tunnel. At that point, we will get to turn our attention not merely to the goals, but how we will achieve them.
We will bring 2018 to a close with a decade of growth behind us. We will enter 2019 facing what is now an annual question "is this going to be the year when things slow down?" Of course, nobody knows the answer to that question, but there are good reasons to take our preparations for next year as an opportunity to revisit sales. A decade when demand has outstripped supply more often than not has delivered spectacular returns but in many cases, less-than-spectacular sales performance.
Why Multifamily Sales is Different
The challenges with multifamily sales are manifold and well-documented: it's the only industry that I know of where sales reports to operations. The cutting edge of sales - the leasing associate - attracts a transient workforce, creating a need for high-volume training of associates to deliver consistent sales processes. However, in delivering a consistent process, we overlook one of the most critical considerations in sales performance: prospects are unique.
While it's no surprise that prospects aren't all created equal, our industry has the habit of trying to force them through cookie-cutter sales processes. Worse still, leasing associates are often coached to focus on asking for the lease and “secret shopped” to assure they do so, creating an experience that is a bigger turn-off for the buyer than operators may realize.
Sales pitches have come a long way since Alec Baldwin's famous "motivational" talk from the 1992 movie Glengarry Glen Ross, and the ethos of "always be closing" does more harm than good in the apartment industry. At best, it annoys prospects; at worst, it alienates them, creating a "buyer beware" environment for the leasing discussion. It gets in the way of discovering information about their unique circumstances and preferences that would help both parties arrive at a successful decision.
Why the Sales Conversation Has Changed
The context of leasing conversations - like most sales processes - has changed as generations of consumers have looked increasingly to the internet as they inform themselves on purchases. Armed with maps, walk scores, reviews, detailed property information and more competitive price information than ever before, it's hard to tell what's on a prospect's mind when they arrive at your community. But it's our job to find out.
Sales processes - particularly ones designed to deliver consistency in an environment of high staff turnover - don't always account for the prospect's circumstances. Agents are drilled to take control of the conversation and guide the prospect down a highly prescribed path towards a decision. And that's what's probably costing operators signed leases.
When most traditional sales processes were designed, it was still the case that prospects had to go to the community in order to gather information about it. Leasing agents controlled much of the information that prospects need in order to get to a buying decision. That is no longer the case: buyers come to your community with wildly varying levels of product knowledge, motivation, and emotions. The information they require may be extremely specific, for example.
Google named this phenomenon the "Zero moment of truth" (or ZMOT). The highly specific, highly unpredictable moment where somebody decides to buy something during the course of their research. It can happen at any point in the discovery process over which the seller has little control. The trick is to find out what it is that the prospect needs to know, and that requires a different set of skills from the one that forces the buyer to follow a traditional sales process. Daniel Pink puts it well when he talks of a shift in the sales paradigm from “Buyer Beware” to the “Seller Beware”.
In the coming weeks, we will explore the way that multifamily communities sell leases. We will break down traditional sales processes and discuss new ways to put the prospect at the heart of the sales process and how that can help to secure more leases. Subscribe to the blog and learn more about how to raise your game in this crucial area as you prepare for 2019!