How to Maximize Option Sales in Your Active Adult Communities - 8/23/2004 - Real Estate Home House Condo

How to Maximize Option Sales in Your Active Adult Communities

Builders who aren’t really “on top of their game” soon will find that active adults are quick to point out broken promises, inaccurate or incomplete information, subpar customer service and the slightest construction defect — and that’s just for starters. These buyers have the time and the desire to be involved in every facet of the home buying experience.

On the flip side, they generally are very loyal, and if you win their trust, they will stand behind you and sing your praises. They are smart, interested and willing to spend money to create their dream home. In moderate- to higher-priced markets, active adult buyers will spend substantially more option dollars than their younger counterparts in the same price range.

With that in mind, here’s my list of the top seven mistakes builders must avoid when selling options to the active adult market:

• Don’t Offer the Exact Same Options You Do in Your Non-Age-Qualified Communities

The list of options available at your non-age-qualified communities is a great place to start, but not to end. If you don’t enhance this list so it reflects the needs and wants of your 55+ buyers, you will severely underserve your target market and reduce your profit potential.

Structural options allow active adult buyers to create floorplans that work for them. We know these buyers want plenty of storage, so include options like second floor walk-in storage in two-level homes, optional stairways to storage in one-level homes, closet systems, garage storage systems, etc.

The 55+ buyer is motivated by convenience. These buyers love products that make their lives easier — utility tubs, handheld showers, below-cabinet lighting, luminous or motion-activated light switches and the like. Then there are the many popular universal design options, including higher height vanities, a variety of different heights for your kitchen counters (a very stylish, more “custom” look for today’s kitchens), raised dishwashers, raised dryers in laundry rooms, grab bars in showers and tubs, etc.

Finally, don’t forget to take a long look at your standard features. Consider including an alarm system as standard, doorbells instead of knockers on the front door, lever handles on all doors and casement windows over tubs or sinks.

• Don’t Think These Buyers Are Too Old or Too Boring for the ‘Cool Stuff’

Today’s active adults are sophisticated buyers who finally are ready to spend money on themselves. If you don't offer what they want, they'll go to a lighting or home improvement store to get it 

So go ahead, offer them the same trend-setting options you offer to your non-age-qualified buyers. Not just the granite counters and stainless steel appliances, but the “cool” stuff, such as wood and iron railings, metal and glass tile inserts, tumbled marble backsplashes, vessel or console sinks, multiple body sprays and showerheads, steam showers, faucets in all the newest finishes.

Within the last two years, some amazing new appliances and kitchen and laundry products have hit the market — items like warming drawers, dishwasher drawers, advantium or trivection ovens, refrigerated ranges, spa-jetted sinks, drying cabinets and washers that “talk” to their companion dryers. All these are fair game for the active adult market.

• Don’t Make Buying Options Difficult or Confusing

Few builders provide adequate option descriptions to their buyers. Most give little more  than the option's name, price and maybe a photo and sentence or two. Unfortuately, this can lead to innocent misinterpretations and, more seriously, unhappy buyers, costly mistakes and potential liability issues.

So, take the time to accurately and comprehensively describe each option as well as how it is installed. Provide enhanced descriptions including details, deadlines, disclaimers, product interactions and cross-references. This is one of the first proactive steps a builder can take toward enhancing both option sales and customer satisfaction. It also can streamline internal operations and reduce expensive mistakes.

• Know the Details or You’ll Lose Their Trust

When your buyers ask why one carpet is worth $2,400 more than another, don’t simply answer, “Well, it’s thicker and comes in more colors than the standard.” They’re looking for real answers, and if you and your salespeople don’t have a firm, working knowledge of the products you’re selling, you not only could lose an opportunity to make a sale, you could lose your buyer’s trust.

Once these buyers feel that they have been lied to, intentionally or not, they likely will not trust you again. And with that trust goes any chance for an easy referral.

The 55+ buyer scours the Internet and knows more than you do. Active adult buyers generally love using the Internet to research the products you offer and they'll come into your design center knowing more than you do about track-resistant carpets, thermal expansion ratings on your stone floors and any of number of other relevant (to them) details on your optional products.

And if you haven’t figured this out yet — they’ll know the retail price of things. So don’t charge them $1,500 for a refrigerator that sells for $800 at the local appliance store. In their eyes, an 85% markup is too much for the convenience of having it installed and included in the mortgage. They'll accept a reasonable markup for convience — as long as it's presented by a properly trained design consultant who knows how to sell value.

Also, don’t forget that your subcontractors and vendors have a vested interest in selling their products. Have them periodically update you and teach you how to sell their products. If they won’t, find a new vendor.

• Don’t Make Your Buyers Wait Too Long or They’ll Get Fed Up and Lose Interest

Retailers know the value of things like point-of-purchase displays and how to maximize what they get out of every buyer who walks through the door. They understand that they have to catch you while you are there and in the mood. Why don’t home builders think the same way?

Buyers, especially active adult buyers, want real-time option pricing, so make sure you have all the answers prepared and ready before you even think about opening your sales office to the public. You should never have to calculate anything per square foot, linear foot or by any other method in order to tell a buyer the price for an optional product.

This means you must proactively research the products you are willing to offer ahead of time and create pricing for every configuration, style or finish you intend to offer for that product — and that should be true for every floorplan you provide.

• Don’t Nickel and Dime Them With the Small Stuff

Think like a retailer. Don’t make your active adult buyers pay for the icemaker line when they buy a refrigerator with a built-in ice maker. Just include it in the price...and make sure you tell them it’s included.

And don’t make them pay an additional $220 for easier-to-use hardware on their $2,500 cabinet upgrade (or on their standard cabinets in their $275,000 house, for that matter). It’s one thing to offer upgraded hardware that suits their personal style, but it’s quite another to charge them extra for hardware that should be standard in the active adult market.

What you really want to do is create packages that increase the perceived value of what they are buying. Offer gourmet kitchens, spa baths, beautiful backsplash packages, easy-to-select bathroom wall/tile packages, exterior color combinations, recessed lighting packages and the like.

Get really creative and put together option packages that increase sales and streamline the buyers’ decision-making time. Satisfy your buyers’ hot buttons with fun, innovative options packages like the “Grand First Impressions” package, “The Finishing Touch” package or “The Healthy Home” package.

• Make Sure They’re Comfortable

Why do we think it’s acceptable to ask our buyers to sit in poorly lit environments? Or to sit on uncomfortable chairs at tables that are too small in overcrowded showrooms lacking coherent signage and cluttered with samples? To make matters worse, we don’t offer them adequate food or beverages.

Do we really think this kind of environment puts them in the right frame of mind to spend $55,000 — or even $15,000 — on options?

Put your prospects in the mood by implementing the following:

• Create proper traffic flow and optimal site lines to streamline the design center experience and maximize option sales.
• Display each optional product as if it were a prized possession that will enhance the value of their homes.
• Think like a retailer and create an ambiance in your design center that is conducive to option sales.
• Improve your procedures, policies and paperwork until they are consistent with your goals.
• Put your buyers in luxurious surroundings (unless you are in an entry-level market). Make them feel pampered and entitled.

Builders of all sizes are beginning to understand the importance of design centers. The goal is to ensure that your design center experience delights your customers and substantially improves your profits at the same time.

Jane Meagher is the president of Success Strategies, a Manalapan, NJ-based marketing consulting firm dedicated to standardizing and streamlining builders' options programs and developing and improving design center environments. Meagher is an active member of the NAHB Seniors Housing Council and has spoken at Building for Boomers & Beyond: Seniors Housing Symposium. For more information, e-mail Meagher, visit her Web site at www.opt4success.net or call her at 732-761-8134.