We were diagnosing for the root cause of low conversion into apartment/villa booking for a renowned realtor in Bengaluru. The ticket size was in the range of Rs. 5-12 Crores. The conversion ratio from site visits to closures was around 14%.
The Situation: The sequence of customer engagement was as follows:
- General Enquiries: These enquiries were generated by ATL/BTL (above and below the line) advertising, digital media, SEO, SEM etc. The enquiries consisted of trash ( from sales perspective) which included candidates looking out for jobs, vendors and prospects who were outside the focus segments including price range, location etc.
- Genuine Enquiries: These were the filtered enquiries who were contacted by the pre-sales team to ascertain their requirements. The people from genuine enquiries were then exhorted for site visits.
- Hot & Warm Leads: These leads correspond to clients who showed interest , those who were to take decisions in 1-2 months were termed as hot leads and those beyond in 3-6 months were the warm leads.
Price and non-price negotiation were carried out for finalizing the sale.
Diagnosis: The conversion from genuine enquiries to sales was a meagre 4%, from site visits it was 15% and from Hot/Warm leads it was 35%. ( Please refer the graph in the heading where enquiries and active leads correspond to genuine enquiries and Hot/Warm Leads)
- Prospects were pushed into site visits: After the initial conversation, the pre-sales team coaxed the prospect into a site visit without ascertaining the proper need. Quite often, the need might be just a casual interest. ( for more details: different types of needs, Abstract, Clear and Strong refer Contextual Selling by Rajan Parulekar pg 136 to 140 )
- Treating HNIs like regular customers: Regular customers can be interpreted as the first-time customers who may be buying apartments in the sub Rs. One Crore range. Here features like apartment size in square feet, the number of bed rooms etc. plays the most critical role. However for the Rs. 5-12 Crores category, the typical characteristics are: age group of 45+, probably buying an apartment for the 2nd or the third time, global traveller who has experienced luxury etc. For the HNI customers the features like apartment size etc. does not cut much ice; what creates an impact is the benefits like type of neighbourhood, exclusivity, personal preferences etc.
- Mediocre Customer Engagement: As the sale happens more at an aspirational level (apart from the standard amenities perceived as hygiene factors) the sales executives need to have exceptional customer engagement abilities, active listening, ability to converse on current topics etc. Our research shows that hardly 10% of the executives read the daily newspapers and generally are not aware of the current events. Some tried to convince us that they get the news on mobile. But getting a 2-liner on why Jet Airlines collapsed and the ability to talk in-depth on the current challenges of the aviation industry with a CEO or CXO are as different as chalk to cheese.
- Handling Customer Objections: Some of the objections customers raised were on Vaastu, the view of the balcony, the floor choice etc. Criteria hierarchy as proposed by Robert Dilts is an important concept in sales, negotiation, conflict resolution during interpersonal communication. The objections occur at the following levels: logical level, behavioural level, values level and the identity level. ( refer Contextual Selling: pg131-136) . Each subsequent level is deeper than the previous one. Objection on floor may be at the logical level but the one on Vaastu may be at the Values or an Identity level depending on the belief system of the customer. The salesperson should know when to convince and when not to.
- Complexity in Decision Making Process: Deepak my friend wanted to hire a 3 BHK apartment in a gated community in South West Bangalore, the primary reason being daughter having taken admission in a renowned Art Institution and college called as Chitrakala Parishat (CKP) Having surveyed 50 –odd apartments the deal could not be done for the following reasons:
– connectivity with metro station or the distance from the bus stop was an issue
– the rooms were of small size
– Room size was good but apartment not full furnished
– Flat fully furnished but the rent was too high.
– Flat was good but family members did not approve.
The last apartment fit the bill in all respects, deal was about to be closed but then the college postponed the decision of shifting the campus! Now if this can happen for a deal where the monthly rental is around Rs. 50,000 what can be the complexities when the ticket size is Rs 50 million( Rs 5 crores) ?
Recommendation: The major obstacle in high-ticket deals is the excitement and the urgency to sell to all and sundry. The challenge needs to be addressed at two levels:
- Skills Enhancement: At a behavioural and skills level the salesperson should be able to create adequate value before selling which is achieved by creating trust, allowing the customer to talk active listening etc. ( for details refer Seven-Steps Value Selling Process )
- Strategic Level: It is the number of apartments that are sold per month or per quarter that shall differentiate a star performer from a mediocre one. The figure on Sales Funnel Management for the Realty Sector shows the cases getting advanced are marked by green arrows entering the funnel whereas the one with a red x shows the cases which are eliminated. Please note that site visits should be clearly differentiated into Courtesy Site Visits ( CSV) and Quality Site Visits ( QSV). Most of the salespeople hope for the business which is like getting higher success from CSV; it is the latter, the QSV that will make all the difference.( refer the figure below) As Santiago, the protagonist says in The Old Man and the Sea (by Ernest Hemingway) , I would not like to be lucky but I would like to be exact! And that’s how fortune favours the brave!!