Marketing & Sales

Kolter Homes' Value Map Focus Syncs With New Sales Challenges

This really isn't a home sales program," Bob Rademacher says. "This is an 'understanding' program. And when our guides fully carry out that program, they earn that role as a trusted advisor."

Marketing & Sales

Kolter Homes' Value Map Focus Syncs With New Sales Challenges

This really isn't a home sales program," Bob Rademacher says. "This is an 'understanding' program. And when our guides fully carry out that program, they earn that role as a trusted advisor."

May 6th, 2022
Kolter Homes' Value Map Focus Syncs With New Sales Challenges
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Better to be a dog in times of tranquility than a human in times of chaos." – Feng Menglong, Late Ming Dynasty

This is the closest authenticated quote to what conveys its way into common idiom as the Chinese Curse, "may you live in interesting times."

Measures of how interesting our times suddenly have become – if you qualify "our" as those of us whose livelihoods spring from imagining, funding, designing, developing and building new homes and communities – include an astonishing "never before" quantifier of impact. Here's "interesting times" visualized in fever chart format.

Image source: St. Louis Fed

Focus on where the 30-year fixed mortgage rate stands now – 5.27% – might net out as relatively benign. The figure as it stands by itself doesn't necessarily sound all that interesting in the scheme of things – for most of the measured time period since the mid-1970s, 30-year fixed rates have exceeded 7%.

The "never before" part which does dunk us into "interesting times" mode is the steepness of change in a one-year period – from 2.97% a year ago to 5.27% this week. As National Association of Home Builders chief economist Rob Dietz tells The Builder's Daily:

The recent move in rates is the largest (in percentage change from a year ago) on record...  That’s a 78% change in bps terms from a year ago."

Blessing or curse, the great housing finance switch-pitch -- from "hey, everybody, buy!" to "hey, everybody, let's not everybody buy at once!" to "hey, some of you, it's not your time to buy" – is underway. The Fed and the pandemic hangover inflationary run and supply chain chokehold together signal a strong likelihood of an operational and strategic tipping point.

A lightning-rod moment for would-be new homebuyer households and their payment power calculus means homebuilding organizations had best be ready to embrace and shape if they don't want to get squeezed and shaped in its force field.

The cliche is a pivot from "order-taking" to "real selling." That, however, is an unhelpful framing of only partial truths. What's more, it under-appreciates the enormous part marketing and sales organizations – up and down their chain of command -- have played adding value to an extraordinary, resilient, and relentless demand for new homes and new community living.

Still, what will more than likely go down in market-rate housing lore as an early 2020s gold-rush mentality – part fear-of-missing-out on dirt cheap rates and part Millennials' home-formation clocks ticking toward their zero-hour – will enter a next chapter. That next chapter – owing to the new math rules of mortgage qualifications and inflation impacts on ASPs – will no doubt winnow a seemingly limitless universe of would-be buyers into a more finite number of prospects with bona fide payment power.

The good news for builders – and they know it – is that all of the flux leaves the ones who've planned for and are moving ahead into decisions that transcend the volatility, instead focusing on the next three to five years or more. They're the new undeterred core of demand, the ones whose goal is value and whose intention is to leverage today's uncertainties to their advantage in getting the most value possible. The big bet is that there are still more among the ranks of the undeterred, with the payment power wherewithal intact, than there are new homes currently on track for start-to-completion build cycles in the months ahead.

A Bank of America survey of Homebuyer Insights – fielded between Feb. 18 and March 8, 2022 – notes:

Today, more than half (53%) of prospective homebuyers intend to buy a home according to their original timeline (41%) or sooner than they originally intended (12%).

Image Source: Bank of America 2022 Homebuyer Insights Report

To keep to those timelines – and remain undeterred – respondents allowed for some compromises to their plan, but stood pat on other needs, preferences, aspirations, and non-negotiables in their pursuit of a home purchase.

In that light of "interesting times," hyper focus on new homes' solutions value – a strategy that's part of most homebuilders' marketing and sales toolbox, but not necessarily refreshed and ready for challenges to come – may be the capability builders want to dust off and modernize for the moment.

Take a look what goes on in that vein at Delray Beach, FL-based Kolter Homes, one of the bigger privately-held regional homebuilders you seldom hear about because they're not big on talking about themselves in terms of rankings.

Under the leadership of former Pulte, DelWebb, Ryland, and Taylor Morrison and Levitt Homes executive Bob Rademacher, Kolter – which operates about 25 actively-selling 55-plus, age-targeted, and mixed-age new home communities in Florida, Georgia, and the Carolinas, and is most widely known for its Cresswind communities brand – has grown in its 25 years into a formidable regional power in some of America's most hyperactive residential construction markets in the Southeast.

And it's done so, in the 10-plus years Rademacher has been at the helm, on the back of a marketing and sales discipline and platform almost custom-suited for this tunnel of "interesting times." The platform draws its sales-approach pedigree from the work championed more than 30 years ago by Neil Rackham, known as SPIN selling, an acronym essential sales journey mapping that build on four types of learning and exchange that define the sales process:

  • Situational questions
  • Problem questions
  • Implication questions
  • Need-Payoff questions (aka Value questions)

Rademacher, with long-time advisory partner Richard Heaston of Reimagine Selling, which has adapted Rackham's methods to the high-ticket homeselling and homebuying journey, has operationalized SPIN Selling as part of the Kolter business culture.

What's more, as volatility, supply chain unknowns, fast-changing prices and costs, and other uncertainties plague the process, and often delay the homebuying to ownership journey, disciplines Kolter's practiced to deepen connections with their customer prospects translates into added capabilities when it comes to housing finance surprises, completion date shifts, and other unpredictables.

Our focus is on how we make a home shopper confident in their decision, and we work across the spectrum of tools Rick and the Reimagine Selling platform on learning how to decipher customers' needs, desires, pain-points, motivators, etc.," says Rademacher. "As a result, we feel we're not in the business of selling homes, we're selling a customer on his or her making their 'perfect decision' confidently, and they're getting the value of the lifestyle they know they want most. And these days, when schedules get delayed, and move-ins don't necessarily happen when they're initially planned, that means we're able to sell them on being patient, because we've bridged being able to be a trusted part of their decision-making. They're less disappointed along the way, because where they get is where they want to be."

Rademacher has so thoroughly embraced the Heaston value map approach that he's rechristened sales team members as new home guides, whose role is to ask, learn, and, as Rademacher emphasizes "selflessly serves" a customer's full array of needs and desires. Together, the guide and the customer evolve a plan that matches the customer to the community they feel is their perfect decision. That's not just about a product, a floorplan, an elevation, a site in the community, it's about how they want to live, who they want to connect with and make friends with, what they want to do to thrive, says Rademacher.

In that sense, Rademacher would go so far as to say that Kolter and its Cresswind communities brand need to be "what our customers think we are and ought to be."

This really isn't a home sales program," he says. "This is an 'understanding' program. And when our guides fully carry out that program, they earn that role as a trusted advisor. At a moment like now, if we can take that feeling of risk someone has that they may be making the wrong decision, we're doing our job."

No time like now for an approach that gives a customer confidence that they're choosing the right place at the right time for the right value in the throes of "interesting times."

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ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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