Episode 19: The Proven Sales Process For Builders With Russ, Sky and Andy

In episode 19 of the Professional Builders Secrets podcast, we’re joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio reveal the proven sales process that all builders must follow.

During episode 19 of the Professional Builders Secrets podcast, Russ, Sky and Andy share the secrets that every builder should be implementing into their sales process to sign more contracts at higher margins.

As a builder, if you are struggling to charge for quotes then you are probably attracting the wrong audience or you are not demonstrating value. The best way to convey value is to be unique, so it’s important to review your unique selling proposition (USP).

Builders that charge for quotes are 8 times more likely to win a job as opposed to those who do not. So while the easy option may appear to be ‘just do it’ or ‘quote and hope’, the reality is that you’re probably wasting your time.

Listen to the full episode as Russ, Sky and Andy share more important secrets behind the proven sales process that every builder should be following.

 

Russ Stephens - Co-founder

Russ Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Russ is a data analysis expert who has introduced data-driven decision making to the residential construction industry. Russ is also a proud member of the Forbes Business Development Council.

Connect with Russ

Sky Stephens - Co-founder

Sky Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Sky is a proud member of The National Association of Women in Construction and she was also recognised as one of 2021’s Top 100 Women. 

Connect with Sky

Andy Skarda - Head Coach 

Andy Skarda has owned and led businesses in South Africa, the United States, South-East Asia, and for the last decade, Australia. With 30+ years of business experience, Andy heads up the coaching team at the Association of Professional Builders (APB), helping business owners in the building industry identify and implement the skills and systems they need to be successful, without needing to go back to school or more importantly, without going bust.

Connect with Andy

 

Timeline

1:06 Should professional builders be good sales people?

3:50 What builders need to have a successful sales process. 

9:25 Where builders are struggling when it comes to sales. 

14:12 Can you have an effective sales process while still managing client expectations? 

18:39 The most common objections builders get (and how to overcome them).

22:57 Sales techniques and strategies that are working for builders right now.

29:36 How knowledge and industry expertise establishes trust. 

32:49 Metrics that are crucial in a builder's sales process (even if you’re completely booked out!).

38:32 The #1 thing builders must have to enhance their sales process.

Links, Resources & More

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APB Website
APB on Instagram
APB on Facebook
APB on YouTube

Join the Professional Builders Secrets Facebook group for builders & connect with professional builders world-wide.

Bosco Anthony:

Hello and welcome to the Professional Builders Secrets Podcast, a podcast by the Association of Professional Builders (APB) for building company owners, general managers, VPs and emerging leaders. Here, we discuss all things running a professional building company, from sales processes, financials, operations and marketing.

Bosco Anthony:

Hello and welcome. Today I'm joined by Co-Founders Sky and Russ Stephens as well as Head Coach Andy Skarda for APB. Welcome everybody; I’m excited to have you here today.

Andy Skarda:

Hey Bosco.

Sky Stephens:

Hey Bosco. I’m excited for this.

Andy Skarda:

Hello everybody.

Bosco Anthony:

Let's get into it. I'm going to start off with a pretty comical question that you probably get asked quite often: should professional builders be good salespeople?

Russ Stephens:

Well, sales are important and you do need the ability to sell, whether that's selling a contract to a consumer or maybe just selling an idea to your team, but the ability to sell is absolutely crucial in business in order to be successful. But do you need to be a great sales person if you're a builder? Not necessarily.

Russ Stephens:

If you don't like selling and it's not your strength, then I think it's fine to bring in someone who can do that role better than you can. That's what it's like in business. It's not a standard template for everyone. You’ve really got to focus on your strengths and then cover off your weaknesses. There was an episode where you interviewed Tye Aloe recently. I think Tye mentioned that the first thing that he did early on was bring in an estimator because that wasn't his strength. So, if sales are not your strength, that's a good place to focus.

Bosco Anthony:

Why do you think builders struggle with the term selling or sales in general? Is there stigma around it?

Sky Stephens:

Definitely. I think it's mindset as well. It's human nature. We have a fear of rejection and sales can be the ultimate rejection. You're actually putting yourself out there. You are asking for something, and when you hear those noes, it just hurts a little bit more. That fear of rejection is so deeply ingrained; we're just trying to protect ourselves. I think that's at a particularly unconscious level, but quite consciously, there is that stigma associated with selling and salespeople – “slimy salespeople.” We've all heard it and this is something that is talked about a lot when builders first come to us because, it just feels dirty. It's uncomfortable. You feel like a dirty slimy salesman ripping people off.

Sky Stephens:

We just need to remove that stigma. We were talking just before we hit record here about the phrase “the gift of the gab.” A lot of builders in particular think, “Can I be good at sales? Why am I struggling with sales? I'm just not like that. I don't have the gift of the gab.” Maybe you are introverted. Maybe you just like focusing on construction. You know what you're good at and you want to stick to that. You may think to be good at sales you need to have the gift of the gab, but you don’t. You can just break it down and pull apart what actually is involved in sales, because you can overcome your struggle with sales if you can boil it down to a very simple process.

Bosco Anthony:

So, what are the factors that can impact the sales process, specifically for builders? If they're sitting here listening to this podcast, what do they need to consider to actually have an effective sales process?

Andy Skarda:

The problem for most people when you say sales process is they immediately get some kind of weird and wonderful Jedi mind trick impregnated NLP [neuro-linguistic programming] thing in their minds. The truth is, any builder who has ever sold anything has a sales process. Well, maybe not. They have a sales system; they have a manner in which they go about selling the services that they offer. I think the real emphasis in this needs to be on process, because what really needs to happen as the starting point is to capture what you are doing now, in writing and in sequence, so that you can see the logical progression from the first time you talk to the client right through to when they actually sign the contract.

Andy Skarda:

Just to add to that with something that Sky said that I think is absolutely critical; the bottom line is that as a professional of any type, you don't want to be manipulating people. There's no value in a builder getting somebody to sign a contract with them if they don't want to build a home and they don't want to build with them as the builder. So really what you're looking to do is to find that beautiful sweet spot where what the client is trying to achieve and what you’re trying to achieve intersect.

Andy Skarda:

If you can bring those two elements together in a process that is repeatable, you will move yourself out of that place of feeling “slimy, slide through your own fingers uphill, manipulative” into the space of “I'm going to help these people get the home they want within the budget that they can afford.” If that's the way that builders approach this, I think they'll find that working out the process and closing sales, which is critically important, is the one skill that every business must have. It's not negotiable. I think they'll find putting a process together to make that happen more often will get significantly easier.

Sky Stephens:

I like that. It’s the process every business must have, but like Russ was saying in the beginning, do you have to be the best salesperson? No, but you can control the process and make sure your salesperson can follow that and they can do it. It doesn’t necessarily fall on you.

Russ Stephens:

When you write it down and you’ve got a documented sales process, then you’ve got consistency. I think we see too many guys who do have a process more or less but it’s kind of in their head, which means they get taken off track very easily. When you actually document your sales process, then you’ve got something to follow each time, and that’s critical.

Sky Stephens:

What we’ve seen enough times is even if it is in your head, you don’t actually have a sales process. You’re following the consumer’s buying process.

Russ Stephens:

You have an idea of where you want to go, but you get pulled off course very easily as soon as the client has a different idea.

Bosco Anthony:

Is there a proven sales process that works for builders today? And if so, what are some of those key components?

Russ Stephens:

Oh, absolutely. This is something we’ve been working on and refining and coaching builders on for seven years now. It really is based around the design and build model. This is the process that really works well and that is capturing the lead early on before the clients have gone to a designer or an architect. That’s a very key component and that obviously affects your marketing, because you’re targeting very different people to those who are just looking for builders to put a price on some plans they’ve already got. 

Russ Stephens:

If we put that aside and take that as a given that we’re following the design and build process, the very first step in the sales process is to qualify. You’ve got to qualify them. Again, you’ve got to follow a written process, a documented process for qualifying which starts with the closed questions, which will discount people very quickly before moving on to the open discovery questions which will allow you to go deep.

Russ Stephens:

From then, the next step once they’re qualified is to take them to a meeting. That could be an online meeting these days or in person, but it has to be a structured meeting because that meeting will then allow you to take them to the next step, which is concepts; that is, signing up for the design agreement. That’s a very important step in the process because that is where you take them out of the marketplace. 

Russ Stephens:

Once you’ve got a client to the concept stage, if you’re following the process correctly, they really are yours to lose. Circumstances do change, so we’re not suggesting all the concepts will go to contract, but a very high percentage will go into a prelim [preliminary] agreement, which is where a lot of the hard work and the detail is done in terms of pricing. It's the last step before contract. So, the final step in the sales process is to sign them to a building contract.

Andy Skarda:

Bosco, if I can just amplify what Russ is saying there, if you listen to what he said: step one, step two, step three, step four, step five. It is that sequential, logical progression from one stage to the next that makes this a process rather than just a good idea.

Bosco Anthony:

Where do you think people struggle with the process as well? Is there a ratio of people who struggle on that opening discovery side? Do you find a lot of builders struggling on the concept or the agreement side? Or is it sort of an even ground?

Andy Skarda:

Well, I think it varies depending on, first of all, the kind of building they're doing and their background. We have the full spectrum at APB from people who love that interaction with clients to people who tell us quite openly, “Well, it's a real problem to have to have a client.” They'd much rather just build houses for nobody, which is an impractical way to do it. Or as some builders call it, spec homes where they build for themselves and hope that they can sell them, which of course is dangerous. 

Andy Skarda:

The reality here is we find that most people, when you are able to lay out a process for them and they start to think back over the sales that didn't work, they then say, “Well, if I'd followed this process, they would've worked.” We generally find that very, very quickly they settle down into the different phases of the process that Russ has just explained.

Russ Stephens:

It's funny you mentioned that, because we see it all the time. It's the guys who don't have a documented sales process and who then struggle with the sales process who always have the goal to move into spec building. That's their dream, “I just want to build houses.”

Sky Stephens:

This can go a full circle now, but do you remember a previous episode we did on marketing a building company? This is where your avatar slots in, because if you don't have a proper sales process, well, you could have a sales process but even the way you deal and talk with your avatar matters. So, you'll be repelling other people in your sales process if you're not speaking a certain way or speaking to your actual ideal client. This loops all the way back into marketing. You've got to have your marketing doing its thing and done properly so you can attract the right people into your sales process. That's when qualifying comes in and what Russ just said is so important. Your marketing should be repelling the people you actually don't want and only attracting ideal clients.

Sky Stephens:

But if they're in, if they've actually entered now into your sales process, and they're in a sales conversation, this is an opportunity now for you to see how far you can take them. That qualification is so important, not to be understated in any way. That should take so much work to perfect and get right so that you can quickly disqualify even more people. If you're spending this time doing a deep discovery, an emotionally in-depth conversation about why they want to build and then doing a meeting with them and then doing concept designs, you want to get quickly rid of as many people as possible, because that's a lot of time you are investing. Andy, how long's the sales cycle in building?

Andy Skarda:

It can be anything up to nine months, in some cases 12 to 18 months, depending on the kind of job. I think, Sky, there's something you said there that is critically important. Some builders listening to this podcast must have just stopped breathing because you've just said, “Get rid of people who are making inquiries.” I think that's something that the professional builder understands: not every inquiry is even worth pursuing. What you really want is what Russ said: the first stage is to qualify them. Essentially, the best example I can give people is in the qualification process, you're essentially auditioning a future client to see whether or not that client gets the golden ticket to go to Vegas or whether they're never going to become American idol. That's the process.

Sky Stephens:

It's not from an arrogant perspective either, that's the thing. I know we've talked about this in the past. You want these prospects to tell you why they would be a great client for you. You're not coming from an arrogant perspective, but you're a professional now. You get to vet your clients.

Andy Skarda:

Yeah. I think in terms of builders being able to build the business that they want for the future, they have a certain type of build for a certain type of client that is going to suit them. We always talk about builders developing a niche. The reality there is the purpose in that is to dominate a section of the market, to become the go-to person in that market. So, it stands to reason if you make sure that at the top end of your sales funnel you are putting those kinds of people and those kind of jobs in, guess what’s going to come out the bottom? Predominantly more and more and more of the kind of work and the kind of people that you want to be working with, in which case you’ll never want to become a spec builder.

Bosco Anthony:

Someone once said to me that a customer’s favourite radio channel is WIIFM, which is, “What’s in it for me?” Can you still have an effective sales process while managing clients’ expectations as well, because you’re going to get people who ask, “What’s in it for me? Throw me a better deal.” Can these two concepts live together?

Russ Stephens:

Absolutely. I think that is how every salesperson should always be thinking whenever they’re interacting with a consumer as well. They should be looking at everything from the client’s perspective and thinking, “How can I help this person?” This is one of the key things we always try to coach our builders through, stop selling to people and start helping them. 

Russ Stephens:

Now, you have to act as a fiduciary, which means acting in your client’s best interests at all times. That can even mean losing a contract, not going ahead on a contract because it wasn’t right for that particular person or maybe your building company wasn’t right. That’s not easy to do, especially when times get a little bit tough and you need every contract. But it’s a commitment. And when you commit to this way of thinking, you’ll find that you’ll have much happier clients, you’ll enjoy your business a lot more and your margins will be a lot stronger.

Andy Skarda:

I think, Bosco, just to go back to that favourite radio station, a professional builder changes that radio station call sign from WIIFM to WIIFU, “What’s in it for us?” I’m not putting emphasis on the ‘FU’, I’m putting the emphasis on the ‘for us’ because the truth is this: no matter what part of this business you are in, you sell a particular cookie and that isn’t the right cookie necessarily for everybody that you’re going to come across. The best thing for both of you is that the cookie you can sell is the cookie that your client actually wants to buy. Russ has said it again: help your clients. Don’t sell to them, help them get the home of their dreams within the budget that they can afford where there’s as little stress as possible. There’s no selling involved in that.

Sky Stephens:

I’m still dying over this FU comment for a second here, but while I gather my thoughts, to piggy pack on that, “What is in it for me,” is why we need to qualify and we need to get rid of people. Think about this for a second. When you are so much in demand and you do your marketing properly, this is why a sales process is so important, because you are manufacturing demand. If you’ve listened to previous episodes and you got very excited by doing proper marketing and you’ve set up a proper marketing strategy for your building company, ooh, you’ll find it’s a little back to front. If you suddenly start generating all of these new inquiries and you do not have a sales process to back anything up, you will get yourself into a mess very quickly.

Sky Stephens:

So, you're getting your sales systems down pat correctly. By the way, this takes years. You can't just implement it and you're good to go. You implement something and then you need to tweak it; you need to refine it. You're looking at the metrics, you're looking at what's getting said or listening to what's getting said and reading the emails you're sending out and actually assessing everything, because if you don't do that, you will get yourself into a mess. But if you do it properly, you can handle anything. You've got to use automation to handle a lot of this by the way, and then systems in place that keep gating the next steps so only a few people go through more and more and more.

Sky Stephens:

But think of this for a second. This is actually a really big question we get all the time, especially when we talk marketing advertising and how many leads you need to be generating. If you're a luxury custom home builder, you might be thinking, “I really do specialised custom homes. I'm a luxury builder. I only need to do 12 homes a year.” You still need to go hard on your marketing advertising so you can manufacture that demand. We've talked about this before. Marketing is linked to margins, or rather margins are linked to marketing.

Sky Stephens:

I don't want to get in depth into that right now, but think of Ferrari or Aston Martin. Think of all of those brands that are highly sought after. Think how many inquiries they get. Think how many of them are from time wasters. If they don't have proper systems in place, they would just be wasting their time all day long. So, this is why you want to create a brand that is so highly sought after but have a sales process in place so you can weed out people who are just, unfortunately, never going to build. A lot of people never are; they're just interested.

Bosco Anthony:

You talked about builders trying to navigate through a mindset and also manoeuvring through fears of rejection. What are some of the common objections that builders face and what are you hearing from the front lines?

Sky Stephens:

Well, you're going to hear them at different levels. You've got sales objections. Right at the end, right at contract signing, which by the way, if you have a proper sales process in place, you shouldn’t really be getting to the end before you hear about a major objection. With a proper sales process, you should actually be uncovering them and overcoming them throughout the entire sales process so that by the time you get to a contract signing, it's a no brainer, you just get to move forward. Sometimes though, and we all know this, a lot of the time objections are knee jerk reactions. People do this thing to protect themselves. You ask, “So, should we do this now?” And they throw out something as a little excuse because they're trying to buy themselves some time to actually comprehend what's happening.

Sky Stephens:

A lot of the time you can just revert back, talk it through, actually understand where they're coming from and then go back through the process and then you can get your contract signed or whatnot if you've done it properly. But sometimes you get big objections right at the end. Perhaps, "I need to think about it." That's not even the real objection. There are lots of objections that can come out but they get masked as other things. “I need to think about it,” or something's not well, “We need to have a conversation about this prior.” What have you been doing until this point? You've been talking about it the whole time. So, there's something else there, so, you need to dig a lot deeper.

Sky Stephens:

So sure, you’ve got a lot of sales side objections, but flip it and think about all the other objections you get throughout the entire sales process. Someone just fills in an expression of interest. Maybe they downloaded your design range to look through all of them. They’ve gone through your website, maybe they’re filling in a request to call because they would like to actually have the opportunity to schedule a meeting and talk about designing a new home. You give them a call. 

Sky Stephens:

So, they were interested, and you call them and then they say, “Look, I’m too busy. I can’t talk.” That’s another objection. That’s just another fob off. So, you need to be able to document all these different kinds of objections you have so that you can have a systematic approach to overcoming them, isolating them, putting them to one side, discussing the real root of the problem. “If we could solve that, would it make sense to actually get started today?”

Russ Stephens:

Yeah. It's really important to have a framework because these objections, although fundamentally there are very few, will seem different. It'll seem like you've got thousands of different objections, but really there are probably only five or six. Having a framework to follow and not be surprised when an objection comes up will really help a lot. I think one of the worst ones that we hear is when a builder has done all this work taking people through the whole entire process and they're on the verge of presenting the final contract proposal. The prospect will say, "Yeah, just email it to me." In some cases, the builder actually does just that. That is terrible. They've got to be able to overcome that. So, objections are not even always obvious. They're not even obvious noes that are preventing the builder getting into a position to have that good conversation.

Sky Stephens:

It's a deflection, isn't it? It could be for many reasons, but one of the big ones is they probably still don't trust you yet. If we take it all the way back, this is why we talk about on the first conversation you have with someone, in the first five minutes, you're not going to go straight out asking for their budget. They don't trust you yet. So, they're going to have some sort of an objection or a lie to get rid of that question, because again, they’re protecting themselves.

Bosco Anthony:

What you're saying is they're not saying no, they're just not comfortable to give you the real reason as to what's really preventing them from having this conversation with you.

Sky Stephens:

Correct. Or some of them just don't know how to say no. We don't like being rejected personally. This is why a lot of people don't like sales. We also know how it feels to be rejected, so we try and let people down very easily. We've all done it. If someone's asking for a decision or they’re trying to move forward in some way, you just try to fob them off gently. "Look, can you just give me a call back in two weeks?" You know you're never going to answer that call, but they'll get the hint if they call back in two weeks and you're not there. We've all done it. So, you need to read the signs.

Bosco Anthony:

Let's peel the onion a little bit. I'm sure all our listeners are wanting to know what are some of these trending techniques in sales that are working for builders today. Obviously, the industry's changed, but what do you see right now that's quite effective for builders?

Andy Skarda:

I think Sky has mentioned one of the biggest ones in this industry and that's trust – building trust. The reality is, we always teach builders that people buy from people they know, like and trust. So, what you've got to be looking at in your sales process is as many opportunities as you can logically and systematically create to grow all three of those pathways. Create opportunities for people to get to know you. 

Andy Skarda:

You're not selling a commodity, you're actually selling in most cases a relationship. Building a house takes anything from six to 18 months. A renovation or a remodel takes anything from three to six or nine months. In a remodelling scenario, you are potentially going to be in these people's home every day. They are going to be coming out of the shower with a towel wrapped around them when you are going in there to pull it apart. It gets that steamy and personal in more ways than one.

Andy Skarda:

The point I'm trying to make is, imagine spending 18 months with somebody you don't trust, you don't like and you hardly know. It's not going to happen. So, when we talk about this process, that's part of what we want to do: create opportunities to be real. It's way better that you learn that this isn't going to work during the sales process than three months into the build. That would be a foundation. But in terms of techniques, and we've alluded to it with the word ‘process’ and Russ has unpacked that process to some extent, but the primary technique that we see working for both parties is don't move the sale ahead until the client is comfortable to move to the next stage.

Andy Skarda:

Essentially, what we are doing there is saying, some builders do a whole bunch of work over a long period of time and then have this huge meeting at the end of the process to sell the client where there's pressure and tension for everybody in that meeting. Instead of that, you can break it up into bite-sized chunks and get people making what we call micro-commitments regularly throughout the process. That is a technique that gets to the point that when you do that final proposal, it's really a summary of all of the other micro-decisions that have happened all the way down the line. As a technique, if we're going to talk about it, breaking it down into micro-commitments, walking people at the pace they can handle, those would probably be the two foundational techniques that I would put out there.

Sky Stephens:

Even if we talk about micro-commitments, let's actually break that down for everyone listening right now because they're not as big as signing a contract or even buying concepts. These micro-commitments are even smaller than that. You are teaching the clients compliance the whole way through and you're going from very small steps into bigger ones, like charging for things, but it's actual compliance: booking a meeting, accepting the calendar invite, talking at the time you said you would be talking, showing up to that scheduled meeting, then going to concepts, then showing up to your selections meeting and design meetings. It's everything.

Russ Stephens:

An important component as well, just what Andy was talking about, is bringing the clients along with you. When you bring them along through this process, the budget is going to change. Don't be afraid of this. You've really got to own that. When the prospect talks to you about adding something in, first of all, you outline what that is likely to do to the budget. Typically, you get their approval and their nod. But the one thing that most builders miss is then documenting that in the communication in a follow up.

Russ Stephens:

You must get that revised budget in writing, because you may have started with a $450,000 budget, but they've just raised something else they wanted included. That's probably going to cost about $10,000. They're happy with that. Now the budget you're talking about is $460,00. And so, it goes on, and we all know that a budget that starts at $450,000, within three or four months is probably going to get to $600,000. But if you don't document every step of the way and only talk in terms of the new revised budget, then you've got a big problem to deal with when it comes to contract time if you don't do that.

Sky Stephens:

It's a really good point and you can extend that to every single bit in the sales process. To operate as a professional, the most professional thing you can do is follow every single interaction you've had on the phone or in person in a meeting or online in a meeting, is follow up that interaction with an email in writing, documenting what was discussed, so everyone's on the same page. Otherwise, you will all have your own different versions of reality and this is where it can get very messy. I know we were talking about this in the client expectations episode, but you're managing expectations the entire way through the sales process, like Russ said. More with the budget, that's where it gets messy. So, it just builds a good habit if you can do it after every interaction, not just when you talk figures.

Andy Skarda:

Think about where we've gone in this conversation – let's close the loop again. We're talking about builders working to build the kind of houses with the kind of clients that they want to work with. We're talking about a process that's documented. What does that mean? It's repeatable. Not only is it repeatable, it's templatable. It's a process. You will literally find that every meeting, if it's following the same sequence, will largely have the same kind of communication package on the far end of it. The more you get this to a process and a system, the easier it becomes in terms of making sure that those things happen.

Andy Skarda:

The other thing that I think is important, just before we go to anything else, is we've spoken about trust. We've got to understand that for a lot of people, this is probably their biggest single purchase that they've ever made in their lives. They are naturally concerned and skittish. So, if there's one element of those three that I would highlight as this must be taken care of in your sales process, it's got to be the trust side of things.

Bosco Anthony:

Would knowledge and knowing a little bit about the industry help establish trust as well? I think about myself and I think about the things that I purchase and I'm typically drawn to sales people who actually know their product really well and know the industry really well. Would that play a role here as well?

Russ Stephens:

I think that's critical, isn't it. These days, especially in the world we live in where people do their research online before approaching a salesperson, what's happening now is they know a lot of the answers already. They're basically interviewing you to see if you are someone they could actually work with. I always think of my wife when it comes to getting a new car. By the time we’re going into a car dealer, she knows everything about that model before she walks in. She's done her research and she always knows a lot more than the salespeople, and that's fine as long as they don't try to, what would we say, Andy? Lie. That's it.

Andy Skarda:

I was thinking of another word, but yeah, that one will do. But I think, Russ, just to amplify that a little bit, trust comes from not only what you do but also from other people. I always talk about how every person coming into a sales process with a builder has what I always refer to as the ‘bulls**t meter’. When they come in at the beginning, it is ticking on the red. It's right up; they're watching and listening to every word. But as you show up and you communicate and you present and you do what you say you will, you start to bring that back down into the green.

Andy Skarda:

The other thing that is hugely important that we always tell builders to build into their sales process is previous client testimonials; having other people who don't have the vested interest that you do say the things that you know will be important to your upcoming clients. So literally bringing previous clients who will confirm the fact that you will do exactly what you say you're going to do is a huge part of actually making that trust thing work.

Sky Stephens:

Totally. There's one thing that everyone seems to know. Everyone, every consumer, when they approach a builder, seems to know everything about construction these days. This is probably the biggest bugbear to a lot of builders and salespeople working at a building company because everyone seems to know a lot. Just as you were saying, Russ, people get to do their own research. How many of that's actually applicable to when we're going through that sales process? So as a builder, number one, if you have someone approaching you who has done their research, they know a lot; how can you build trust with them? Well, you need to ask yourself the question, “How can I add value to what they already know?”

Sky Stephens:

They may know a lot of things. Ask yourself, “How can I put it together for them? How can I actually enhance their experience?” You don't just want to just think, “Well, you know everything,” and stop selling because they know it all. You don’t want to think, "Okay, well, here's the next step," so it becomes emotionless. No, this is where you can level up in your sales game and say, "Okay, so this is what you do know. Walk me through it. What do you know; what are you aware of?" How can you add value to their experience and their knowledge and walk them through the rest of the journey?

Bosco Anthony:

What metrics are crucial for builders and what should they be paying attention to? If a builder says to you, "I'm booked up for the next few months, I'm good, I don't have to worry about the sales process," what are you looking at?

Russ Stephens:

Now you're talking Bosco, this is what we love. This is what we do with our mentoring clients. We produce a KPI dashboard that they fill in. When we study those metrics on that dashboard, a lot of them are the lead indicators that all apply to the sales process. A couple of key ones that we do look at are the marketing qualified leads. These are the leads that are qualified in the sense of they are consumers looking to build as opposed to someone trying to sell you SEO services. 

Russ Stephens:

So, we look at the marketing qualified leads that become sales qualified leads. We do that by qualifying them, because that then reveals are they in our area, are they looking to build the type of home that we specialise in building, et cetera? When they come out the other side of qualifying, they then become a sales qualified lead. It's very important to measure that ratio because that tells you how well your marketing is performing.

Russ Stephens:

The next ratio we look at is the sales qualified lead progressing to a meeting or an opportunity, we call it. And again, by monitoring that number, especially as you take on more people or other people might take over the sales role, it's a very important percentage to measure. That will really reveal how good you are on the initial call and then taking someone to a meeting. When you ask, "How about we meet and take it to the next stage?" the first thing they're going to say is, "Yeah, give me a call next week,” or “I don't have my calendar, my diary," and all that type of thing. You've got to be able to overcome those objections.

Russ Stephens:

The next ratio we look at is the opportunity, which is the meeting. What percentage of those go to concept, or the design process, because at that point you're taking them out of the market. So again, this is going to reveal how good your offer is, how good your sales process is. The next one is the concept to prelim as a percentage, as a ratio. And then of course, prelim to contract.

Russ Stephens:

Now the interesting one is if you ask most builders, “What percentage of your prelims go to contract?” they'll say one of two numbers: “100%” or “nearly all of them.” That is their perception. But the reality is when you start logging the numbers, it's probably closer to around about 75% to maybe 80%, which is still way too high. The benchmark that we like to work on is 50%. When you work on 50%, you are generating a lot more prelims than you actually need to sign. So, it really does change the relationship. It leaves you less dependent on each prelim that's in your funnel. That last step, that prelim to contract is a very important ratio to keep an eye on.

Andy Skarda:

If you think about what Russ has just said, this creates for the builder the biggest problem he has in his life: too much work. All of a sudden, the problem he has is if he is signing twice as many prelims as contracts that he needs, he's going to have to turn down 50% of the work. Or imagine this: imagine if he brought in another team, trained them and stepped up to the next level. The point I'm trying to make here is this: when you start to measure the transition from each step to the next step and you actually have a process, and that process has been optimised, you are now in a place where you can scale.

Andy Skarda:

Now, I'm re-underlining what we always say. We will never scale a business that's not profitable. So, the assumption here is that you've got your margins working correctly; all of that stuff is in place. But essentially, once you've got a sales process working, you are now in a situation where you can track that data and that puts you in a place to literally be able to scale to the next level by simply rinsing and repeating everything that you're already doing that's working.

Bosco Anthony:

You talked about builders and dashboards and having all these different ratios. Do you find a lot of builders don't have these metrics before they start working with you?

Russ Stephens:

What do you reckon the ratio is, guys? Take a stab.

Sky Stephens:

Look, it does vary, Russ, to be fair. We have had some very advanced builders come into our program, and Andy, you can probably speak a little bit more to this than me. I don't want to use the word ‘bootstrapped’ but it's almost like that, because there's nothing out there that can give you this information. It's always self-made, everyone has their own version of a spreadsheet.

Andy Skarda:

Yeah, that's valid. What I think we've found in the mentoring program in particular where we dig into this stuff is some of them have certain bits of it and then the rest of is missing, or they have some bits of it that they do well and other bits of it that they just hate doing and because of that, they ignore them. It's one of those weird things where when we work with people, generally we start with the assumption that we're starting from scratch. The first step virtually every time with one of our private mentoring clients would be to capture what they are doing now, because then we're able to actually pull that apart and see where it slots into each of those steps that Russ mentioned earlier.

Bosco Anthony:

What resources or technology do you recommend for builders looking to enhance their sales process?

Sky Stephens:

Straight up, you don't have a sales process if you don't have a CRM system, a customer relationship management system. You need something to actually handle the sales side. A CRM is essentially a database, but without oversimplifying it, there’s a few key things that your database needs. You can track all of this in a spreadsheet, but you suddenly don't have any benefit of any automation. If you get a proper sales CRM system, you not only have your entire database of all of your opportunities, your current opportunities, your past opportunities and your current clients on there so you can track referrals and cool stuff like that, it can all be segmented, but you can also have deal tracking.

Sky Stephens:

So, you can actually track current opportunities. You can get a lot more data from a proper CRM system, draw a lot of reports from it so you can fill in dashboards with lead indicators like Russ and Andy were just talking about. But then you need the automation component. If someone reaches out to you in the middle of the night requesting a free download, maybe it’s a request to call, they want to book a meeting or something, you need a system to handle that. 

Sky Stephens:

Professional builders get back to people instantly, and a CRM system allows you to do that. So, if you're looking for some sort of system, A, just make sure its cloud based so that you are using modern technology, but B, do ensure whatever system you choose actually has auto responders so that you can be emailing people automatically, instantly when they require something.

Sky Stephens:

It's literally a salesperson that will never get sick or go on holiday. It is there for you 24/7. So, you need that kind of reliability in a sales process. To go a layer deeper, that's just the technology side. In terms of resources, you need this process written down and documented, exactly as Andy said. You need scripts for each section. You need a process on how you are inputting data into the system, on how you're moving people forward. You need proper email templates that summarise each of those conversations because like Andy said, if you're dealing with the same kind of people building the same kind of homes, the conversations get kind of similar. You make it different and unique for who you're talking to, but when you summarise a conversation, you can have a very easy template for that where you get to customise it each time you send it. So, technology and resources make your life easier.

Russ Stephens:

I think one of the most highly discussed topics inside the APB members’ group on Facebook is CRMs. “Which CRM should I be going for?” “Which CRM do you recommend?” On that topic, I think one thing that we would say to builders is look at how fast you're growing. Look at the size you want to grow to and make sure you're investing in the system that will service that growth for the next three years at least, because the last thing you want to be doing is changing systems midway through a fast paced growth.

Sky Stephens:

That’s the worst, especially if you're implementing everything else inside your building company. It's just aggro that you don't need. Some people get very scared with a lot of systems, not even just software but systems, putting in place an entire sales process, scripts for each step and what to do to get from A to B to C. When we talk about a sales process, we've not unpacked this just yet, but when we talk about systemising something as personal as sales and selling to someone, they think that personality just disappears and goes out the window. The people who don't want to follow a system in something like sales because it's unique to the person in front of them, they're the kind of people usually who don't want to be held accountable or be held up to a benchmark.

Sky Stephens:

But here's the thing: you can't be able to measure anything if you don't have a system in place. So, systems, templates, even structure like routine sets you free. So really, if you can have a sales process in place, that is your baseline. When you have a sales process and all of your scripts and templates in place, think of them like highway guardrails. They keep you on track and you can keep moving forward. You can have a personality, you can have banter with your prospects, you can have a relationship with them, but you've got these highway guardrails up and you just keep moving forward based on this process you've got.

Bosco Anthony:

You talked about the members. How are you coaching your current member base as well to apply this effective sales process moving forward?

Andy Skarda:

We always talk about the fact that we want a system that has proven and predictable outcomes, because there is no point in following a system that's going to get you the wrong result. We've skimmed the surface of it here. But as Russ explained earlier, we know that there are six or seven very specific steps in sequence. As Sky mentioned a second ago, within each of those steps, you can customise them to your situation, your personality, your type of building, but that fundamental process, we know if you do these seven things correctly, you will succeed. So that's part of it is where we want to make sure that it's proven, it has predictable outcomes and it must be documented. We've said this a couple of times.

Andy Skarda:

It cannot be in your head, because even with the greatest intention in the world, if you get smacked by a bus tomorrow morning, that entire process just evaporates. Every builder should be looking to the future and the future's got to be either growth and/or sale of the business and/or passing the business onto the next generations as a positive legacy. If you do not have systems in place that are documented, number one, you are the bottleneck. Number two, when you die, your business dies, whether that's an actual physical death, whether that's you retiring, whether that's you getting burnt out, which is the other side of this. When you are reinventing the wheel every day, burnout is a very, very real thing very, very quickly.

Andy Skarda:

Whereas, if you get to the place that you are able to almost do things unconsciously, once a process becomes ingrained and it becomes unconsciously competent, you are then in a place that you can literally be taking the time to really interact with your potential client, really be listening to their responses because you're no longer focused on what's the next thing I have to say. It has become the way that you do things, and when it gets to that level, obviously that's where you want to go.

Andy Skarda:

So, we make sure that it's properly documented and that it's followed by everybody who interacts with it. Sky's mentioned already that we want it to be cloud based. We want it to be accessible online so that every one of your team members and your clients can access it. Clients always ask, “Where do I start?” Our response is, “It doesn't really matter. Start where you find yourself today.” You're going to have one of two things: leads are coming from somewhere and contracts are getting signed or not. You can literally start at either end or, as we often do with people, we start at both ends and work back to the middle. But the point is, you've got to start. You've actually literally got to work the steps out and then detail every one of those.

Andy Skarda:

If we were going to pick a place to start, it would be – depending on who you speak to – qualification. Qualification is hugely important because it solves a whole bunch of problems. It doesn't just solve the beginning of your sales process, but if you’re time poor or any of those other things it'll deal with that for you as well. What we find in the private mentoring program is a lot of clients come to us with prospects already on the books, which means often we start at the end and work backwards. So, we make sure that they get to deal with what's in front of them as professionally as possible, and then fill in the middle once we've got the bookends in place, so to speak.

Bosco Anthony:

Insightful as always. Any final words of wisdom from any one of you?

Russ Stephens:

I think what we should do here is add a link to the APB sales process for builders so that builders listening to this podcast can download the proven process that has worked so well for our members and they can see themselves how this process works.

Sky Stephens:

Yeah. We'll make that available in the show notes. That's also available on the website just to make it easy. [Link to Sales blueprint.]

Bosco Anthony:

Well, Andy, Russ, Sky, it’s been a pleasure as always. Thank you for being here in another really informative episode. I think we're all going to be changing our radio channels pretty soon.

Andy Skarda:

Cool.

Sky Stephens:

WIIFU.

Bosco Anthony:

Cheers guys.

Russ Stephens:

Thanks Bosco.

Andy Skarda:

Cheers Bosco.

Sky Stephens:

Cheers Bosco. Bye.

Andy Skarda:

Cheers Bosco.

Thank you for listening. Remember to subscribe to Professional Builders Secrets on your favourite podcast platform and leave a review. To learn more about how the systems at APB can help you grow your building company, visit associationofprofessionalbuilders.com. See you next time.