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Lead “Leakage” – Don’t Compromise the Value of your Listings

Kevin Wilzbach - Monday, January 19, 2015 | Comments (0)


Lead “Leakage” – Don’t Compromise the Value of your Listings

 Did you know that builders who build and show spec home inventory run a real risk of having to deal with a problem we call “lead leakage”.  Unlike a specific lost lead that you know about and can touch and see, lead leakage is more insidious.  It’s about how bad processes and missed opportunities can create loss opportunities that “you didn’t even know you had.”  The reason it’s so bad is that it’s assumed to be a part of the cost of doing business, and because a builder or the builder representative never had the lead in the first place, the question that sometimes gets asked is “Did we really lose it?”  And that’s what makes it so insidious; it can lead to complacency about the problem.

While the ways lead leakage can happen are varied, it basically means that a builder’s representative never really had knowledge of or control of a direct consumer or Realtor sponsored lead.  Some of the ways in which lead leakage occurs include:

  1. Limited appreciation for the resale market – Builders sometimes plan their next spec home based upon the “cheapest” price or what sold the previous week.  Builders need to be more aware of what’s listing and selling around them.  What’s currently listing and selling in the resale market by product type and price point should be constantly analyzed.  Are you listing what people want?  Are you pricing your home where it needs to be?  If not, Realtors won’t even see it.
  2. Incomplete listing content – We get complacent.  We include only enough information in our MLS listings to get the listing into MLS.  Detailed information about the home or the community isn’t included.  Maybe we forget to include lifestyle elements and the listing is a simple regurgitation of room sizes and flooring styles.  Incomplete listings get syndicated out.
  3. Inaccurate listing content – Let’s say it again; we get complacent.  We don’t have an “error checking” component included in our listing process and “bad” data gets entered into our listing.  Examples include incorrect HOA fees or tax rates.  Or maybe the gas or water utility is entered incorrectly.  Once this information is in your listing, it gets syndicated everywhere.
  4. Marginalization of the sale staff – Some builders turn complete control of spec home listings and showings over to third party Realtors.  While these Realtors do their best, they aren’t the builder’s sales staff. Salespeople who don’t “own” their listings may not take the time to be actively engaged in them.  They can’t really speak to their homes’ unique selling propositions, nor are they engaged in getting feedback from the market place.  Giving salespeople responsibility for the builder’s inventory homes encourages “ownership” and fosters active engagement in the inventory home selling process
  5. Ineffective management of showing leads -- The ultimate goal of a listing is to create a lead that turns into a sale.  When a call comes in, who takes it?  For that matter, who knows about it?  Does it go to a third party Realtor or does it go directly to the sales staff?  How does management know about EVERY lead to ensure complete documentation and follow up?  Do you know which listings are generating the calls?

MLS listings are expensive builder “billboards”.  Builders who have a complete listing and lead management system that can address each of these five elements can increase the number of leads they EFFECTIVELY manage by 50% or more.  Look at how you handle your inventory home planning and selling process EACH STEP of the way.  What could you be doing differently?  In future blogs, we’ll look at each of these 5 elements in more detail.  We’ll see why is each one so critical to your success such that even small changes can have a major impact.

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