Why Relationship Selling is Dead for MFH Operators

The MFH industry has changed dramatically over the years with the introduction of various systems and technologies meant to optimize revenues, reduce vacancies and ensure profits for unit owners. With these new systems in place and a more informed buyer market, techniques like relationship selling do not work as well as they used to, years ago.

In the past, sales associates have emphasized building a relationship with prospects to break the ice and reduce resistance to closing. This “relationship building” focused on being nice, having a likeable personality and “connecting” with prospects though “connecting” was never defined particularly well.

The relationship model can work (with the emphasis on “can”) in a market environment characterized by lots of demand, limited supply and low complexity of sale.  The reason for this is that in such an environment very little influence is needed. The salesperson is more of a process manager than anything else.

Studies show that in more complex and competitive environments, the traditional relationship model – while still the dominant model in play across industries, and especially in MFH – breaks down and does not support strong performance.  A study carried out by the Corporate Executive Board (CEB) in 2009 established five selling styles employed by salespeople, and further identified the dominant style associated with top performance.

The Challenger Sales Model

CEB used statistical “cluster analysis” to identify these styles and gauge their effectiveness in closing apartments. The styles identified were:

• Lone Wolves: These are generally witty people that tend to rely solely on their charm and wit to close sales. They are naturally gifted salespersons.
• Problem Solvers: The associates find out the problems of apartment hunters and then quickly offer a solution.
• Hard Workers: These salespeople are always on the phone prospecting, and achieve success from the “law of averages”. They typically work longer hours.
• Relationship Builders: These salespeople enjoy meeting with prospects and build a good rapport with them. They can get a meeting with nearly any prospect.
• Challengers: They go against the norm and dig up problems that apartment hunters may not know they have, and propose attacking the underlying problem.

The research further found out that any kind of sales approach can achieve average results. However, sales associates that were considered “high performers” were those that fell into two clusters; the Lone Wolves and the Challengers. Lone Wolves are gifted with their in-born talent, so this “talent driven” model isn’t really trainable. The Challenger Sales approach, however, is skills-based and thus can be trained and coached.

However, perhaps the most important revelation of the study is that Relationship Builders were barely represented among high performance. In fact, Relationship Builders came a distant fifth (out of the five styles) among high achievers, representing only 7% of high performers.

MFH companies looking to improve their closings should teach their associates the key things that the Challenger Sales Associate does. These are:

• Teach. Challengers ‘teach” rather than ‘sell.’ They probe the underlying problems of an apartment hunter and teach them something about their need and the search process along the way.
• Tailor. Challengers tailor their presentation to the actual needs of the prospect. They don’t follow the “ask” and “respond” model like traditional sales associates.
• Take control. Challengers take control of the conversation and are comfortable discussing price early in the discussion.

To close sales in today’s competitive housing industry, sales associates need a different approach to relationship building. Their goals for the relationships they build with their prospects should no longer be based on being “likable,” but instead, on being valued by their prospects. They can accomplish this following the Challenger Sales Style.