Until recently, the US stock market has continued on nearly a two-year “bull run,” meaning that stocks as a whole were on a steady rise. To the average person who has some money invested in equities, this is great news. To the full-time investor, their job is to “seek alpha,” or to find a higher return than the general market. This is a task that proves to be even more challenging when the overall economy is strong.
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Typically in a bull economy, potential company weaknesses are not as easily identified due to the overall strength of the market outweighing any negatives on a microeconomic level. However, when the economy undertakes a market softening, these weaknesses become exploited. At this point, those who have a solid understanding of these once seemingly unimportant characteristics can outperform their peers. Therefore, one of the most crucial tasks for an investor to undertake in a bull economy is to identify these traits and ensure that their investments are strong.
What does this mean for a sales leader within the new home industry? Your teams undoubtedly have weak areas that are being propped up by either their stronger qualities, the generally healthy market, or a combination of the two. As the astute investor of your team, it is your role to identify what areas need the most improvement so that each of your salespeople is prepared for any market condition.
One possible example within the new home sales industry could be a sales associate’s ability to execute effective marketing directly to their target consumer group. During solid economic activity, there may not be a great deal of urgency to conduct direct outreach and marketing. Instead, a combination of consumer-driven traffic and maintaining stable Realtor relations has been sufficient to drive sales. However, if consumer confidence dwindles and customer traffic slows, having these skills refined will be critical for a salesperson’s continued success.
Another commonly understated example is the clear and concise communication of a community’s unique selling proposition (USP), the thing that sets you apart from your competition. While the USP may not have seemed as important for the past few years, it becomes increasingly more important to be able to demonstrate concrete reasoning on why your builder’s product stands out over a competitor’s. At the point of a market softening, the industry will not be able to rely on communities “selling themselves,” or the value of the home speaking for itself.
A common strategy that firms often utilize to maximize their gains is called “leveraging.” Leveraging is essentially borrowing someone else’s assets so that your own capital is free to be used elsewhere. In the context of your sales team, you undoubtedly have a handful of people who are experts in different areas with the new home sales process. Spending incrementally more time with them and helping to refine their skills so that they can be the “go-to” person on certain subjects will help everyone else in your division. If this subject matter expert leads a sales meeting training, then your time spent with this person is automatically transferred to the remainder of the team, causing an asymmetric payoff.
In summary, always be sure to think of your time spent with your sales team as an “investment.” The time you spend with them now will surely be a return on your investment down the road, whether that is in the sales they earn or the leadership practices they acquire. Allocate your time appropriately, and leverage the resources you have at hand to effectively maximize performance not only now, but during any market condition.
