05:21 PM Friday August 14, 2009

By John Baldoni

The first time I heard department stores referred to as dinosaurs (e.g. facing extinction) was at least twenty-five years ago, and even then it was old news. So when Terry Lundgren, CEO of Macy’s, gave an interview to the Wall Street Journal talking about how he was using the downturn to improve operations, I thought it wise to pay attention.

First and foremost, Lundgren is a realist. When asked if he “worried about” customers holding out for discounts, he replied: “I’m not worried about it. I’m counting on it.” Leaders need to face facts and adjust expectations to those realities. That is something that Macy’s, along with every other retailer, does. In other words, you don’t count on a turnaround, you make a turnaround happen.

How you do that varies from business to business. Leaders such as Lundgren teach us how you can use the downturn to your advantage. Not overnight, but over time. Here’s how:

Make tough choices. Now is the time to get rid of anything and everything that does not add value to the bottom line. Adhering to the principles of value engineering will help an organization optimize operations, but that is not enough. A leader must look to kill old habits. Reduce practices that “feed the monster,” that is, projects that inflate egos rather than earnings. For example, reduce the number of staff and skip-level meetings. Let people do their work rather than prepare for meetings with senior staff.

Look for the up and comers. When times are flat or in a downturn, look for new ideas. Challenge your best and brightest to make suggestions to improve operations, attract new customers, or work more collaboratively with vendors or each other.

Live resilience. This is the first significant downturn that younger employees have faced. Keep spirits high by emphasizing self-determinism. Show them how seasoned leaders respond to tough times by focusing not simply on the business, but also on the people propelling the turnaround. Good leaders use these opportunities to describe what is going right as well as what is going wrong. Acknowledge the obstacles, but show people how to go around them or climb over them.

Reality dictates that business turnarounds require economic rebounds. No leader can tweak his operation into success; you need customers to buy what you offer. But if you do not improve what you offer and how you offer it, you may miss the upswing.

Preparation for the upturn should be well underway at most organizations, but turnarounds cannot rely upon what those at the top tell financial journalists and analysts. Leaders must shepherd the spirit of the turnaround through every level of the organization so employees not only see the possibilities, but more importantly, discover what they must do to make them real.

Analysis: Housing begins long, slow rebound

Market is stabilizing and in some cases recovering, according to recent data

Analysis

 updated 11:42 a.m. PT, Sat., Aug 1, 2009

It was – note the past tense – the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession’s trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Freefall is over
By every measure, except foreclosures, the housing market has stabilized and many areas are recovering, according to a spate of data released in the past two weeks. Nationwide, home resales in June are up 9 percent from January, on a seasonally adjusted basis. Sales of new homes have climbed 17 percent during the same period. And construction, while still anemic, has risen almost 20 percent since the beginning of the year.

Even home prices, down one third from the top, edged up in May, the first monthly increase since June 2006.

“The freefall is over,” says Dean Baker of the Center for Economic and Policy Research.

The problem is that, Baker, like many economists, expects the housing market will “be bouncing around the bottom” for the second half of the year.

Real threats
There are also real threats that could poison this budding recovery. The unemployment rate, which is 9.5 percent, is expected to surpass 10 percent, leaving even more homeowners unable to pay their mortgages. Mortgage rates could rise, making homeownership less affordable. And the federal tax credit for first-time homebuyers, which as lured many into the market, is set to expire on Nov. 30.

“As long as jobs are being lost, regardless of all the federal programs out there to help the borrowers, you’re still going to have problems in the housing market,” says Steve Cumbie, executive director of the Center for Real Estate Development at the University of North Carolina’s Kenan-Flagler Business School.

True, but when you’ve got bidding wars for foreclosures in places like Las Vegas, Phoenix and Los Angeles, it’s time to call the bottom.

Northeast
Nobody knows the power of a dollar like New Yorkers.

After home on Long Island sat on the market for four months recently, the sellers‘ real estate agent told them to drop the price from the mid-$600s to $599,000. The house sold the next weekend.

In Merrick, about 30 miles east of New York City, homes are starting to sell “as long as they’re priced right,” the agent said.

In January, with the ground and financial markets still frozen, few would have believed that the worst of the housing crisis in the Northeast would turn around within six months.

But the evidence is clear: home resales in the region in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled.

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Even the median sales price of $249,400 in June was up 10 percent from January and was off just 6 percent from year-ago levels, according to the National Association of Realtors.

“We certainly had our share of problems, but overall the severity of what happened here was far less” than what happened elsewhere, says Michael Lynch, an economist with IHS Global Insight.

Pittsburgh has the region’s strongest home market in terms of sales and prices because the city saw less of a housing bubble and the area has 7.7 percent unemployment rate that is below the national rate.

One of the weakest markets, by contrast, was Providence, R.I., where a jobless rate of 12 percent exacerbated the city’s foreclosure crisis. Too many residents took out risky subprime loans they couldn’t afford when the interest rates spiked within a few years. Today, more than one in 10 homeowners with a mortgage in the state is at least one month behind or in foreclosure.

The Northeast, more than any other region, felt the full force of the credit crisis that reshaped Wall Street. Manhattan’s real estate market, long immune from price declines, tanked this year as tens of thousands of people lost their jobs.

Prices of for-sale apartments plunged in the second quarter by the largest amount in decades. Prices have fallen, on average, between 13 and 19 percent, according to four reports published recently by real estate firms.

Northeast states: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

Data compares June vs. January and June vs. June 2008:

Home resales: up 28 percent; down 5 percent

Median price: $249,400, up 10 percent from January; down 6 percent

New home sales : up 3 percent; down 11 percent

New home construction: up 113 percent, down 68 percent

Mortgage delinquencies as of March: 10.4 percent

Regional outlook: The region should experience “a nice rebound in home construction” over the rest of the year, according to IHS Global Insight, an economic research firm. Sales for new and existing homes are likely to rise. Just don’t expect your home’s value to shoot up. Rising unemployment will lead to more foreclosures, and that will keep a lid on prices.

South
The real estate market in the South remains one of extremes.

On one end, are oil-rich cities in Texas, Arkansas and Oklahoma that nearly skirted the housing recession altogether. Tipping the scale on the other side are foreclosure-ridden areas in Atlanta and swaths in Florida where prices are still falling annually by double digits.

Taken as a whole, home resales in the 17-state region rose 10 percent in the first half of this year on a seasonally adjusted basis, and are off just 4 percent from June of last year, according to the National Association of Realtors.

“Generally speaking, the rate of decrease, both in sales and prices, has started to bottom,” says the University of North Carolina’s Cumbie. “But that doesn’t mean it’s going to come roaring back.”

Mass layoffs at Bank of America and Wachovia, for example, have taken their toll in their home state of North Carolina. Home price declines in Charlotte accelerated this year, and home resales in June were off nearly 30 percent from last year.

Home and apartment construction, a key economic engine, will also vary widely across the region. Parts of the South, notably Florida and Atlanta, were vastly overbuilt during the housing boom. So construction in the region rose a meager 7 percent in the first half of the year, the lowest of the four regions, according to the Commerce Department.

‘Going to take more time’
There was little reason for builders to start laying new foundations. New home sales fell 2 percent from January to June, the only region in the country to post a decline.

“In the longer term, I’m confident that the real estate market is going to shift where buyers are coming out not only because of attractive interest rates and low prices, but because more people are getting jobs,” says Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Longwood, Fla. an Orlando suburb. “But, as we speak, it’s not right. It’s going to take more time.”

Southeast states: Alabama, Arkansas, Delaware, D.C., Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Data compares June vs. January and June vs. June 2008:

Home resales: up 10 percent; down 4 percent

Median price: $163,200 up 14 percent; down 12 percent

New home sales: down 2 percent; down 34 percent

New home construction: up 7 percent; down 44 percent

Mortgage delinquencies as of March: 12.7 percent

Regional outlook: The southern market has several characteristics that could help it recover, Cumbie says. The population continues to grow and businesses continue to move into the region. But the weight of foreclosures and job losses stretching into next year could delay any meaningful recovery.

One of the weakest markets, by contrast, was Providence, R.I., where a jobless rate of 12 percent exacerbated the city’s foreclosure crisis. Too many residents took out risky subprime loans they couldn’t afford when the interest rates spiked within a few years. Today, more than one in 10 homeowners with a mortgage in the state is at least one month behind or in foreclosure.

The Northeast, more than any other region, felt the full force of the credit crisis that reshaped Wall Street. Manhattan’s real estate market, long immune from price declines, tanked this year as tens of thousands of people lost their jobs.

Prices of for-sale apartments plunged in the second quarter by the largest amount in decades. Prices have fallen, on average, between 13 and 19 percent, according to four reports published recently by real estate firms.

Northeast states: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

Data compares June vs. January and June vs. June 2008:

Home resales: up 28 percent; down 5 percent

Median price: $249,400, up 10 percent from January; down 6 percent

New home sales : up 3 percent; down 11 percent

New home construction: up 113 percent, down 68 percent

Mortgage delinquencies as of March: 10.4 percent

Regional outlook: The region should experience “a nice rebound in home construction” over the rest of the year, according to IHS Global Insight, an economic research firm. Sales for new and existing homes are likely to rise. Just don’t expect your home’s value to shoot up. Rising unemployment will lead to more foreclosures, and that will keep a lid on prices.

South
The real estate market in the South remains one of extremes.

On one end, are oil-rich cities in Texas, Arkansas and Oklahoma that nearly skirted the housing recession altogether. Tipping the scale on the other side are foreclosure-ridden areas in Atlanta and swaths in Florida where prices are still falling annually by double digits.

Taken as a whole, home resales in the 17-state region rose 10 percent in the first half of this year on a seasonally adjusted basis, and are off just 4 percent from June of last year, according to the National Association of Realtors.

“Generally speaking, the rate of decrease, both in sales and prices, has started to bottom,” says the University of North Carolina’s Cumbie. “But that doesn’t mean it’s going to come roaring back.”

Mass layoffs at Bank of America and Wachovia, for example, have taken their toll in their home state of North Carolina. Home price declines in Charlotte accelerated this year, and home resales in June were off nearly 30 percent from last year.

Home and apartment construction, a key economic engine, will also vary widely across the region. Parts of the South, notably Florida and Atlanta, were vastly overbuilt during the housing boom. So construction in the region rose a meager 7 percent in the first half of the year, the lowest of the four regions, according to the Commerce Department.

‘Going to take more time’
There was little reason for builders to start laying new foundations. New home sales fell 2 percent from January to June, the only region in the country to post a decline.

“In the longer term, I’m confident that the real estate market is going to shift where buyers are coming out not only because of attractive interest rates and low prices, but because more people are getting jobs,” says Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Longwood, Fla. an Orlando suburb. “But, as we speak, it’s not right. It’s going to take more time.”

Southeast states: Alabama, Arkansas, Delaware, D.C., Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Data compares June vs. January and June vs. June 2008:

Home resales: up 10 percent; down 4 percent

Median price: $163,200 up 14 percent; down 12 percent

New home sales: down 2 percent; down 34 percent

New home construction: up 7 percent; down 44 percent

Mortgage delinquencies as of March: 12.7 percent

Regional outlook: The southern market has several characteristics that could help it recover, Cumbie says. The population continues to grow and businesses continue to move into the region. But the weight of foreclosures and job losses stretching into next year could delay any meaningful recovery.

West
For years Las Vegas symbolized the boom, as mile after mile of desert gave way to three-bedroom homes and swimming pools. Then came the crash and it symbolized something else: a decade of speculation and excess.

Now, Las Vegas is one of the hottest housing markets in the region again. This city has always profited from others’ misfortune, and the same can be said of the current housing market.

In Clark County, Nev., home to Sin City, one in every 11 homes had received at least one foreclosure-related notice in June, according to RealtyTrac. The glut of deeply discounted foreclosures has almost doubled sales activity for most of this year.

“In January the market was busy, and since that time, it’s gone a little haywire,” says Brad Snyder, an agent with ZipRealty in Las Vegas. “There’s (sales) activity now that we haven’t seen even since ‘04.”

The situation is similar in California’s Riverside, San Joaquin and San Bernardino counties, where one out of every 14 homes was in foreclosure.

After falling 18 percent in the second half of 2008, monthly home prices were flat in the first half of this year, on a seasonally adjusted basis, according to the National Association of Realtors.

‘Steep decline in supply’
Markets like these have seen a surge this year in all-cash buyers, many of them investors, scooping up the sharply discounted properties. It’s not uncommon to see multiple offers on a single property, and that’s helped slow the rate of price declines a little. The demand also has helped whittle down the inventory of homes for sale to the lowest level since the boom.

“We have seen such a steep decline in supply right now, that when a home comes on the market it’s first day there could be seven or eight or 10 people there in a matter of hours,” Snyder says.

To lure buyers away from foreclosures, homebuilders have slashed prices or are simply tearing down vacant homes. New home sales jumped almost 59 percent in the first half of the year, while construction in these grossly overbuilt markets slid 12 percent.

In the Pacific Northwest and states such as Utah, by contrast, housing markets are on a different timer than the rest of the West. Home sales and values held up better and longer while markets in the Southwest were already in decline. These markets also haven’t seen as many foreclosures wreaking havoc with home prices.

States in the region: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

Data compares June vs. January and June 2008:

Home resales: down 1 percent, up 12 percent

Median price: $214,800, flat, down 25 percent

New home sales: up 59 percent, down 10 percent

New home construction: down 12 percent, down 42 percent

Mortgage delinquencies as of March: 12 percent

Regional outlook: The recession remains the region’s wild card. Unemployment is at 10.2 percent in the West, but that could go higher if the economy worsens. If that happens, expect more foreclosures and a slower turnaround.

• From: BUILDER July 2009
• Posted on: July 7, 2009

Brave New World

After the bust, builders might be surprised at what future shoppers will want to buy. What they’re building, though, doesn’t always match with what future buyers say they want.

By:

John Caulfield

The homes that sold like gangbusters during the good times-to the tune of nearly 1.4 million in 2005 alone-are not what the buyers of tomorrow say they are looking for.

That is the unsettling conclusion Builder drew from our recent “Builder/American Lives New-Home Shopper Survey” as well as interviews with buyers in the three groups-immigrants, Baby Boomers, and Millennials-that are likely to drive most of the demand within the housing industry for the foreseeable future.

This Special Report outlines the real and daunting challenges that lie ahead for home building companies that must try to accommodate several buyer segments with a tapestry of preferences that, in the past, builders might have deemed incompatible with their business models.

Immigrants, 40 million strong and counting, still see their American Dream in a big house with enough space for their extended and visiting families. Boomers approaching retirement are still inclined to downsize, but without sacrificing quality or comfort. However, their buying decisions now often reflect serious concessions to financial and health events many hadn’t anticipated or chose not to think about.

And Millennials-the generation born between the late 1970s and early 1990s-are buying earlier than their predecessors and are looking for urban (or at least higher density), affordable, well-designed, and uncluttered dwellings that complement their lifestyles.

It’s becoming clear that builders’ old, one-size-fits-all marketing and product approach won’t work on any of these buyer groups whose interests and borrowing requirements differ widely, not only from the buyers of the recent past, but also from each other.

How to Make People Passionate About Their Work
02:29 PM Thursday July 16, 2009

By John Baldoni

I know two CEOs: one in publishing is a friend; the other in manufacturing is an email correspondent. There is a common bond between the two; both are in their sixties and both act as if they are closer to twenty-two. Their sense of vitality springs from their passion for what they do.

Each feels a sense of pride in the businesses he leads; more importantly, each is pushing his respective organization to new heights with a vigor found typically in much younger men. Their can-do attitudes seem almost corny, as if sketched from an earlier age or at least from musicals like The Music Man. But both men are in exactly the right positions at the right time.

Generating enthusiasm, or passion, for what you do is essential. It is doubly so in perilous times. When everything around us seems to be coming apart, a leader who has a passion for what he does is essential. Such a spirit fuels the engine of enthusiasm needed to spark the enterprise. More importantly, such passion is vital to convincing others that the work matters. It is easy to get discouraged by today’s market news and so it is vital that someone, be it the CEO or another senior leader, serves as the organization’s designated cheerleader.

Ultimately instilling passion for the work is not an exercise in rah-rah; it is a search for meaning and significance. So how can you cultivate passion for work in others and do it in ways that have significance? Here are some suggestions.

Focus on the positive. Passion in leaders can be palpable; you know in an instant that the executive cares about the company. In my experience, those senior leaders who stroll through the halls with a nod or good word to say to all are those executives who get things done. And it is because they are out and about, not cloistered in their offices on mahogany row. Rather, they are meeting with employees and customers, vendors and investors, getting to know issues and concerns. They also use these times to talk up the good things.

Address the negatives. Passionate leaders are not Pollyannas; they know the score, precisely because they spend so much time out of their offices. They see firsthand what is working and what is not, and because they have a relationship with people in all levels of the company, they can more readily mobilize employees to solve problems.

Set high expectations. Those who care about the work and set a high standard challenge others to do the same.

As much as generating passion for the work matters, it is no guarantee of success, or even survival. Radiating passion is no excuse for ignoring attention to the fundamentals.

Yet successful organizations are more than the sum of fiscal prudence. Good ones are the collective values and aspirations of dedicated men and women who have made a choice to work there. Such organizations, be they in healthcare or manufacturing, consumer goods or government, ultimately depend upon the commitment of individuals pulling together to make things work. That’s why you need leaders who have a passion for what they do and are able to spread that passion to others so that people feel better about what they do, and ultimately, what they can do better.

09:37 PM Thursday July 09, 2009

By John Baldoni

Once upon a time Ernest Hemingway was challenged to write a story using only six words. Impossible, some thought. Not for Papa, as Neal Conan explained on NPR’s Talk of the Nation. The next day Hemingway produced this: “For sale. Baby shoes. Never worn.”

Clare Booth Luce, according to columnist Wall Street Journal columnist Peggy Noonan, once told President John Kennedy that “a great man is one sentence.” Noonan writes that Lincoln’s life could be summed up as “He preserved the Union and freed the slaves.” My colleague, Scott Eblin, adapted the concept to summing up one’s leadership legacy. “It takes time and effort to boil down the essence of what you’re trying to do to a short and memorable idea.”

Reducing one’s life to a handful of words is a mighty challenge. Creating a six-word memoir, a concept inspired by a project conducted by Smith College’s magazine, can be a useful exercise in self-analysis, particularly if you apply the process to reflecting upon your goals and your results. Did we achieve what we set out to achieve? Did I help them and the team to succeed? Did our results stand the test of time?

The million dollar question for any leader is this: did you leave the organization in a better place than when you found it? Sadly we have discovered that the great recession we are enduring was in part due to senior executives who did not leave their companies better off, even though they themselves exited with pockets full of cash.

For leaders, this six-word exercise works well as a form of aspiration, that is, how do I want to be remembered? So if you are early or mid career, you have time to make changes so that you can become the leader you are capable of becoming. Consider the following three questions to help you consider how you would sum up your work life in six words or less.

What gets me up in the morning? A very basic question! What do you do and why do you do it? For some, the answer is the opportunity to work with others on a project that has real meaning, that is, improves the quality of life for others. If this question throws you, then you need to consider what you don’t like about what you do. Is it possible to change something, or must you change careers?

How can I help? We humans are motivated to work for goals greater than ourselves. Leaders achieve through the efforts of others. It is imperative that they create conditions for others to succeed. They help others achieve intentions that enable the team, and by extension the organization, to succeed.

What is my influence? Line authority over someone on your team is a point of leverage but its effect may be limited. For organizations, particularly in challenging times with dwindling resources, leaders need to exert their influence. Such influence is built upon good example but transmitted through effective persuasion rooted in trust.

You can adapt the six-word memoir exercise to fit other needs. For example, how might you describe a challenge facing your team using just six words? “Tough job. Committed people. Keep working.” Or “Need ideas. Sooner than later. Help.” You can even make a game of it at your next staff meeting. Encourage your people to contribute their six words as a means of getting to think about the issues, the challenges, and the opportunities you face.

Summing up your career in six words may not produce a eureka moment of sudden clarity, but the exercise challenges you to think about what work means to you and how you influence the way others work. “Big idea. Profound thoughts. Truthful moment.”

1. Leaders must invest in themselves to be personally proficient. Effective leaders manage their physical, emotional, intellectual, and spiritual selves well. They learn constantly. They are capable of quick, bold actions as well as great patience. They constantly deepen their insight about themselves. This is especially true in tough economic times when people look to their leaders for hope and confidence.

2. Good leaders know how to be strategists and are able to answer the question “Where are we going?” They test their big ideas pragmatically, and they work with others to find the path from the present to the desired future.

3. Effective leaders are executors. They ask: “How will we ensure that we reach our goal?” They understand how to make change happen, assign accountability, delegate appropriately, and make sure that teams work well together.

4. These leaders are talent managers and engage people to get things done now and in a manner that generates intense personal, professional, and organizational loyalty. They help people bring their best to the job at hand.

5. Finally, they are human capital developers who build the next generation. They make sure that the organization has the longer-term skills, knowledge, behaviors and attitudes for future strategic success.

As we are experiencing a historical market correction in real estate there is increased emphasis for new construction sales and marketing plans to be more cost effective and accountable.  Budgets are being reduced to be more in line with current market conditions; expenditures are more strategic and marketing costs are being correlated with new metrics such as increased web traffic, registrations, personalized interactions, etcetera, in addition to the traditional sales center traffic counts and sales.  At the forefront of the movement to increase efficiency and track effectiveness are Web 2.0 technologies.

In simple terms Web 2.0 is the transformation of the web from primarily an information and presentation source of “one-to-many” to a communications vehicle that supports dialogue of “many-to-many”.  According to Wikipedia, “Web 2.0 refers to what was perceived as a second generation of web development and web design. It is characterized as facilitating communication, information sharing, interoperability, and collaboration on the World Wide Web.”  Some familiar examples are social-networking sites like MySpace, Facebook, and Twitter, plus blogs, and video sharing sites to name a few.

There is no question that social technologies will continue to grow as an important part of our marketing strategies.  According to a recent Forrester Research report titled, “The Growth of Social Technology Adoption”, in 2008 “three in four US online adults use social media tools to connect with each other compared to 56% in 2007.  In a recent posting on the AdAge “Digital Next” blog, another Forrester report, “Social Media Playtime is Over”, states that fifty percent of corporations surveyed are increasing social media spending in the face of the recession.  Adopting Web 2.0 applications into sales and marketing plans will facilitate more engagement with prospects, add layers of communications, and increase the collection of meaningful consumer data that will improve the efficiency and effectiveness of sales and marketing, if properly managed.

Transforming the benefits of Web 2.0 into improved sales performance requires a fresh look at the entire sales and marketing process.  It all starts with a plan.

Like Dennis Hopper says in one of his commercials for Ameristar, “You can’t start this journey without knowin where you’re goin.  You my friend need a plan”. 

Sales Process Mapping

We now have the ability to learn much more about our prospects than simple demographics and product preferences typically collected from most registration forms.  For example, we can automatically identify which search engine the prospect used to find our website; where they spend most of their time on our website; and our sales teams are using Customer Relationship Management (CRM) applications to record more personal information through their ongoing dialogue with prospects.  More information can have a direct impact on sales performance, but it will provide little competitive advantage if not organized, analyzed, managed and distributed across communication channels to all project stakeholders.  To accomplish these management objectives we need to use a multi-dimensional flow chart to orchestrate internal and external communications and sales activities, which is the outcome of sales process mapping.  To illustrate the importance of process mapping, which is in essence thinking through the entire sales process and exchange of information, we’ll examine a very basic part of the sales and marketing process; the lead source.

Let’s assume that a visit to the project website is the first point of contact.  Where did the web visitor come from; was it Google, another search engine, the project website, or another source?  Will the first reply to a lead from Google be different than if the source is your website?  Is a lead that comes directly from your website better quality then a lead through Google?  Is your data organized to identify correlations and trends that can answer this question? Who in the organization receives data analytics and how are they used to improve relevant engagement between the sales organization (not just the sales agent) and the lead?    Is the website lead registration process designed to optimize the conversion ratio of visitors to registrants or is it designed to learn as much from the new registrant as possible?  How many visitors exit the website in the process of completing the registration form?  Clearly each decision, or often non decision, affects the sales process and subsequently sales performance.    If we do not have a clear plan to manage today’s multi-dimensional sales process we will not effectively leverage the benefits of Web 2.0 technologies and CRM.   

There is much written about incorporating business process mapping principles into sales and marketing process management; however, I think the following excerpt from an article written by the authors of “Business Process Mapping – Improving Customer Satisfaction”, by J. Mike Jacka and Paulette J. Keller, is an ideal introduction to the topic and offers an easy to follow guide to map your sales and marketing process.

The Four Steps of Business Process Mapping

1. Process Identification – attaining a full understanding of all the steps of the process

2. Information Gathering – identifying objectives, risks, and key controls in the process

3. Interviewing and Mapping – Understanding the point of view of each person in the process and designing actual maps

4. Analysis – using tools and approaches to make the process run more effectively and efficiently

 In order to effectively analyze business processes, reviewers need a tool that takes into account the objectives of the business, the actual work being accomplished, and, most importantly, the impact of processes on customers. Business process mapping is just that tool. In a four-step process, analysis can be performed that accomplishes this holistic approach. At the same time, business process mapping also helps gain employees’ buy-in and can result in an increased sense of pride for employees.

The first step is process identification.  Many companies think they know their processes — manufacturing, sales, accounting, building services. But it is just this silo mentality that causes processes to lose their customer-centric approach. Instead of defining processes based on the company’s understanding, they must be defined by the customer’s understanding. Walking through customer experiences helps the reviewer identify those trigger points that can make or break success. These then form the basis for process identification.

Once the processes are identified, the second step begins — information gathering. There is a large volume of information that should be obtained before trying to learn the intricacies of a process. Primary among these is identifying who the true process owners are — the ones who can effect change. Their buy-in and agreement throughout the analysis is paramount. Additional information that should be obtained includes the objectives of the process, risks to the process, key controls over those risks, and measures of success for the process.

In order to effectively record and maintain this information, some important worksheets have been developed. Two of the most important are the Process Profile Work Sheet, and Work Flow Surveys. The Process Profile Work Sheet includes such information as the process owner, the trigger events (beginning and ending), inputs, outputs, and, as mentioned above the objectives, risks, key controls, and measures of success. Work Flow Surveys are completed by individuals actually working on the process and request from them a list of tasks — including inputs and outputs — which they perform in support of the process.

Only after all this is done is actual “Process Mapping” completed. This involves sitting with each employee and having him or her describe what it is they do. This information is recorded using a sticky-note method. Each step in the process is recorded on a sticky-note and built in front of the individual completing the work. This allows them to interactively ensure the final map matches their understanding of their work. The final process maps are developed using flowcharting software. Time flows down the page, and each individual involved is represented by a separate column. In this manner, a simple map can result from a complicated process.

While Analysis is considered the fourth step, analysis must really occur throughout the review. While defining the processes, the reviewer may determine that objectives are not in line with the processes in place. In gathering information, it may become apparent that measures of success do not correspond to department objectives. These are just some of the examples of ongoing analysis.

The discussion about the sales process has historically focused on the interaction between the sales agent and prospects. I think a broader view has become necessary for Sellers to maximize their marketing ROI; wherein the Agents’ selling process is viewed as just one part of the organization’s total management system designed to achieve sales revenue objectives. When the organizational mindset shits to viewing all project activities as contributors to the ultimate sales success, a well designed and managed system, which I refer to as a Sales Performance System, is the most efficient path to optimum sales results. . The Sales Performance Systems concept establishes critical organizational infrastructure, processes, practices, and protocols to manage all internal and external communications that facilitates cross-discipline collaboration and incorporates ongoing prospective buyer feedback into the sales process. Sales Performance Systems are built on four fundamental practices.

1. Superior Agent Education. Today’s homebuyer expects sales representatives to be experts about the product, real estate, home financing, and the competitive market. To meet, and preferably exceed buyer expectations, Sales agents need a solid base of knowledge so they converse with clarity and confidence regarding all aspects necessary to lead a qualified prospect to the buying decision. Sales Performance Systems promotes educating the sales team with a comprehensive training curriculum of educational/training modules taught by an array of project experts such as the project visionary, project management team leaders, architect, interior designer and as many other team members that may be necessary When the agents a well-educated they will apply sales training from management and expert sales trainers in a manner that will establish their value in the eyes of prospects and empower them to lead prospects to a buying decision..

2. Communications Strategy and Process Management. Generally Seller’s have a well planned marketing strategy and budget that are thoroughly documented, but often lack the budget and detailed communication strategy and process designed to effectively manage the pool of prospects to achieve optimum conversion ratios Effective prospect management and follow have always been an important part of a professional sales system; however, the increase in marketing and communication channels due to the larger role of internet marketing and longer sales cycles, require that a larger share of the marketing budget be allocated to prospect management along with articulating a clear strategy and sales communications process in the marketing document.. Internet marketing is proven to be very cost effective as part of the advertising and promotional mix, but the increased speed and frequency digital communications of buyer communications Sales Performance Systems use a visual communications flow manager with protocols and practices that manage cross-team internal communications and maintains timely and relevant communications with each prospect

3. Advanced Sales Performance Metrics. Sales is still a numbers game, but the numbers have changed; enter the world of Key Performance Indicators. Many organizations tend to still evaluate performance based on sales. While sales are the ultimate objective, they are the end result (lagging indicator) of the successful completion of many sales activities. Identifying correlations between sales & marketing activities, as well as micro and macro market data, will reveal Key Performance Indicators (KPI) of future sales success. Furthermore, adopting KPIs to measure sales agent performance will keep the sales team more focused on important daily actions that contribute to sales provide the basis to help sales agents and sales managers more quickly make timely adjustments to improve performance.

4. Synthesize Information.  There seems to be no limit to consumer, management, and market information; the challenge is getting to information that is most relevant to the enterprise and using the information to improve sales performance.  The process of organizing, analyzing and presenting findings into terms that are easily understood by all sales and marketing stakeholders has been labeled Data Synthesis.  The process of data synthesizing data/information into knowledge to optimize sales performance requires identifying data sources, capturing data, and integrating multiple data sources into a single database.  Sales Performance Systems are designed integrate data sources and produce analysis that is distributed to the entire sales and marketing team to facilitate cross-team collaboration that result in highly effective, real-time, sales strategies and tactics.

Analysis of prospect data is key to creating follow-up strategies and tactics that maximize the return from each sales lead. 

Today, most prospective buyers begin their home search on the internet because it is the best portal for specific home, project, and general market information.  Use of the web to gather information and email to correspond with sales representatives have the added benefit to consumers of buffering direct contact with sales representatives.  Consumers are generally more comfortable working with a sales representative after they have decided they are interested in the project and are ready to seek more detailed information.  Sure, there are still spontaneous shoppers who drop-in to sales centers or call the sales center for information.  But, the trend is clear, most serious buyers are doing their research and comparing properties before they make direct contact with project sales representatives.  Recognition of this buyer trend requires that sales and marketing place a high importance on nurturing buyers through a series of strategic communications that establish value and develop buyer trust in the project and its sales representatives.

Data-mining and lead incubation are part science and part art.  Mining the database to identify potential qualified prospects that are systematically nurtured requires adherence to established protocols.  Data collection begins with tracking website browser activities of individual visitors and the aggregate of all visitors; time spent on the website, viewing specific pages, floor plans, amenities and any other measurable browser activities.   In addition, data can also be collected by tracking response patterns from registered prospects to broadcast database communications.  Tracking response patterns can identify the information or promotional messages that are most effective.  Finally, more detailed and personal data is collected through the sales team’s correspondence with prospects via email, phone or site visits.  The aggregation of all data sources and continual analysis, which is translated into user friendly reports, will lead to new insights into prospect tendencies that become catalysts to creative thought and more relevant prospect communications.

Often the art of sales is thought of as an individual sales person interacting with and influencing another person.  The art of nurturing buyers (lead incubation) is the collaborative effort of the development team, sales, and marketing influencing many prospects with a multi-dimensional communications strategy.  Prospects receive messages from different team members in various formats.  The array of different forms of buyer communication must be timely, relevant, and meaningful to prospective buyers to be effective.

Lead nurturing begins on the website.  The marketing message must resonate with prospective buyers and the quality of content needs to reward them for the time spent on the website; when both of these objectives are accomplished the process of establishing value and credibility has begun.  Periodic updates to the website, broadcast email (HTML) to targeted registrant segments, and special events are a few tactical methods that continue the nurturing of process.  The objective of each broad based tactic should always be designed to prompt a prospect inquiry to the sales team and thereby provide another opportunity to move a prospect through the sales process.  In addition to communications that emanate from the marketing team, the site sales representatives also systematically communicate with prospects through personalized email, phone calls, and various outreach activities.  The opportunity to convert prospect interest to sales is optimized when all channels of buyer communications are managed through a Customer Relationship Management system (CRM).

CRM can be defined as a broad term that covers concepts used by companies to manage their relationship with customers including capture, storage and analysis of customer information.  CRM systems used in residential project marketing are either individual software installations with synchronizing capabilities or a web-application, the latter of which is broadly considered the preferred technology solution.  Like any technology used to support the project, it is important that the CRM solution fit the project requirements, which requires that a person highly experienced with CRM implementation be the lead in the identification of the CRM solution.

The project team will rely on data collected in the CRM system, but the sales team will be responsible to enter most of the data and will be the heaviest users of the application.  It is therefore very important that the entire sales team is properly trained and receive ongoing support during the initial learning curve.  The sales team will also need hands-on guidance and oversight to ensure that CRM is used to its full potential and that data entry consistently follows protocol. 

Mining the project registrant database and the lead incubation process require a well-planned communications strategy that is effectively implemented.  The developer will realize the maximum return on the dollars spent to create awareness and generate interest in the project by allocating sales and marketing time and resources to the nurturing of leads into qualified prospects.  Following a program to optimize every lead to its highest potential will result in achieving maximum sales velocity with the lowest possible promotional costs.

The project’s sales and marketing functions are either in-house, outsourced or a blend of the two solutions. The in-house solution gives the developer total control of marketing and sales, but requires a fixed cost commitment for upper-level management, supporting personnel, and overhead.  Also, the developer may benefit legally by funneling sales through an independent real estate broker, thus placing the Broker between the Developer and the Buyer.  The trend over recent years is to either outsource all sales and marketing management or selectively outsource to compliment and support in-house sales and marketing resources.

The project management team’s bandwidth can be stretched thin at various times throughout the lifespan of the project or the team may lack expertise in some aspect(s) of sales and marketing management.   Contracting with an independent sales and marketing executive is a cost effect option to assist in-house management during periods of peak demand and add expertise where needed.  This added support may be what is necessary to ensure that all sales and marketing elements consistently operate at optimum levels.  For example, if the in-house management team is running multiple projects, they may need support during the time intensive first sales release.  The independent sales and marketing executive could be effectively used to establish the sales team’s product training curriculum and conduct “sales drills” to prepare the sales team to be at peak performance with their very first live sales presentation.  There are a number of high demand periods through the sales and marketing phases of a project when additional executive level expertise is temporarily needed. Contracting the services of an experienced independent sales and marketing executive keeps fixed personnel costs down with the ability to add management on an as needed basis. 

 In addition to expanding sales and marketing management bandwidth, the in-house team may need outside expertise for technical and specialized components of sales and marketing management.  The components may be primary market research, project comparable analysis, data-mining and lead incubation, or developing sales scripts based on consumer behavior and preferences.  To illustrate one application, let us examine data mining and lead incubation.  While sales and marketing managers are likely to be conversant in these disciplines, they may not be expert in the process of mining data and implementing lead incubation systems.  The continual advancement of data collection methods and the application of analytical tools required to help the sales team fully leverage the data into timely and relevant prospect communications requires specialized expertise.  As marketing strategies become more sophisticated there is a growing need for higher levels of expertise in all the components of the sales and marketing process.  Incorporating the services of an independent sales and marketing executive will increase in-house management bandwidth and add expertise where needed.  The independent sales and marketing executive may also be a valuable resource to review project sales performance and provide useful insights and recommendations to the development team.

An independent review of sales and marketing strategies, tactics, budgets, and related management practices can be helpful to ensure that vendor services align with the development team’s goals and objectives as well as identify potential performance gaps or areas for improvement within the overall development team.  Throughout the course of a project the periods of heavy time demands on core team members require that management focus on priority projects and tasks, which may result in delays for other projects and tasks.   The non-bias nature of the independent sales and marketing review will provide a fresh perspective and identify “slippage” and performance gaps.  Properly administered, the reviewer provides positive feedback and collaborates with in-house and vendor personnel to improve performance.  The independent reviewer is only affective when viewed as an asset by all stakeholders.  Incorporating independent review of sales and marketing performance is likely to pay financial dividends through improved productivity and cost management.

In summary, whether the independent sales and marketing executive is used to expand human resource bandwidth, perform specialized management functions, or provide general management oversight, when and how to incorporate these services is determined by the project phase; experience levels and bandwidth of the developer’s project management team; and the scope of services provided by the sales and marketing vendors.  The ever changing marketplace for new residential development often requires innovation and new solutions that adapt to market conditions and the needs of the development team; using the services of an independent sales and marketing executive as needed is solution that fits today’s market conditions.