Although “location, location, location” has always been a major selling advantage for home builders, there isn’t much builders can do about their current land positions in this economic climate. Similarly, most builders have already done what they can to modify their products and pricing to attract buyers in the short term. Many builders have even gotten serious about sales training with the hope of letting fewer prospects slip away.

So what else can builders do to sell more homes? Focus on “traffic, traffic, traffic.”

To increase the number of high-quality prospects visiting your model homes and design centers, focus on these four areas, organized from highest to lowest probability of improving your closing ratio:

1) The sales floor, including Realtor and non-Realtor visits, both first and subsequent

2) Neighborhood presentation, including signage and merchandising

3) Marketing channels, including Realtor, Web and referral

4) Media, including both formal and casual communication alternatives

Combined, these represent the “integrated pressure points” of generating traffic, as outlined in the flow chart below. This chart is a helpful tool for deciding which actions to take and which performance areas to measure. The rest of this column explores it in depth.

Sales Floor

As the saying goes, “You can’t improve what you don’t measure,” and that goes for the prospective home buyers you encounter, too. Typically, builders measure traffic in quantitative terms, but to really improve closing ratios you need to measure traffic in qualitative terms.

There are four kinds of sales floor traffic you should measure: Realtor first visits, Realtor subsequent visits, non-Realtor first visits and non-Realtor subsequent visits. Then track the closing ratio for each type of shopper. Over time, you’ll arrive at the appropriate closing ratios for your business. To begin, however, shoot for the following closing ratios, which are targets I’ve developed over years of consulting:

• Realtor first visits: 20 percent

• Realtor subsequent visits: 40 percent

• Non-Realtor first visits: 5 percent

• Non-Realtor subsequent visits: 10 percent

Overall closing ratios will increase as you attract more Realtor first visits and any subsequent visits.

Consider “contracting” these ratios with each of your sales agents, noting that much of the agent’s success is driven by subsequent visitation and the ratio of Realtor vs. non-Realtor shoppers.

Neighborhood Presentation

If prospects can’t find your neighborhood — or they discover a disappointing “drive through” when they do — they will not stop. Most neighborhood developments can boost traffic simply by using better directional signage, merchandising and general polish.

Although your sales team probably doesn’t field these efforts, they certainly can tell you when they are in need of additional support. So ask them how the presentation of the neighborhood could be improved to increase traffic and implement the best ideas.

Channels

To increase traffic, you should target three primary channels: Realtor, Web and referral. Each has responsibilities for the sales team as well as the company.

Realtor Channel. Do you realize that more than half of your co-brokered clients told their Realtor they wanted to visit you rather than the Realtor being the source of the visit? In actuality, a two-thirds co-brokered business is only one-third brokered. There is a great deal of opportunity overlooked in the Realtor channel.

Each salesperson should have a stable of leading general brokerage Realtors with whom they have bonded over time. This is the frontline of Realtor-accompanied first visits. Explore ways for salespeople to forge meaningful, one-on-one relationships with the key Realtors within their geographic and price submarket as a means for increasing quality Realtor traffic. Measure actual sales from each Realtor in the sales person’s stable.

Meanwhile, the company should be working on a much broader list of Realtors, taking its brand to the “must show” list of more Realtors. Measure sales to this general group of Realtors, too, and move these Realtors into the stables of specific salespeople so the relationship can be fostered.

Web Channel. It’s important to capture the contact information of prospects visiting your website so you can arrange appointments and site visits with them. Then track how successful you are at setting up appointments, producing visits, and closing sales with these prospects. Measure initially against some frequently noted industry standards, such as a 25 percent appointment rate on registrations, a 25 percent visit rate on registrants, and a 33 percent contract rate on visitors. These low rates on appointments and visits indicate an opportunity for growing traffic even more.

At the same time, focus on converting more and more unique website visits to Web registrations. I rarely see more than 3 percent, indicating another strong opportunity to connect with potential buyers with better Web design and search engine optimization. Sometimes, registrations can be increased simply by asking for as little information as necessary and allowing site visitors to opt in to receive more information via their preferred medium: phone call, e-mail or standard mail.

Referral Channel. Many builders brag about high referral rates. These rates often are based on after-sale interviews with home buyers who report to have been referred. However, builders should focus on referral visitation to really understand what is happening. Each salesperson has previous customers with whom he or she should remain in contact, and referrals originating from each of these customers should be tracked so the salesperson can better target his or her efforts for generating more referral traffic.

Meanwhile, the company has addresses for every house it has ever built (other than those being followed by the current sales staff) and should follow up frequently with those home owners and measure traffic generated from these lists.

Media

The previous discussion has focused primarily on prospects that are in the market. Very little is currently being done to motivate the general public to enter the market. Typically, this is driven by either formal communication, such as mass media, or casual conversational media, such as social media. Mass media generally follow the old AIDA acronym: Attention, Interest, Desire, and Action. But social media subscribes to the ADIA acronym: Acknowledgement, Dialog, Incentivizing, and Activation, as first described by Joseph Jaffe in his 2010 book Flip the Funnel.

Mass Media. Although it can be an expensive endeavor to convert strangers into happy customers, it is possible in today’s economy to make an impression with historically modest investments. In fact, several of the larger public builders have fielded productive campaigns with outdoor, radio, and television advertising within their stronger markets. Several local home builder associations have had similar success for their members.

Mass media investments require an understanding of frequency and reach in relation to your demographic, which typically means paying for professional counsel. Low-cost buys typically fail, giving mass media an undeserved poor reputation.

Social Media. This is really about an even larger “referral” channel. It is about using existing contacts to gain customers. It is about the word-of-mouth infrastructure efficiently delivered through the Web using Facebook, Twitter and other social media forms.

Social media success is typically neighborhood driven with frequent and timely updates. Avoid this opportunity until it can be rolled out at the neighborhood level.

There’s seemingly no end to the areas you can tap into to generate more traffic, but these four areas represent the origins for the vast majority of your sales. That’s why it’s important to measure your results relating to each of these traffic-generating pressure points. Order them from weakest to strongest and invest in the weakest area for the most efficient results. Then move on to the next least productive area, eventually reaching all four areas of traffic generation.

Charles G. Graham has been the managing principal of Newton Graham Consultants since its inception 25 years ago. He directs all feasibility and marketing assignments and conducts general management consulting in the areas of strategic development, organizational structuring, control systems, and financial management. The National Association of Home Builders recognized his contributions with its Bill Molster and Excellence in Education awards. He holds a bachelor’s degree in architecture from The University of Notre Dame and an MBA from Harvard University. He can be reached at cgraham6@bellsouth.net.