Like clockwork, it brings with it hope; cherry blossoms; bunny rabbits; and the Ragatz Report on The State of the Fractional Industry in North America 2011.
A Ragatz survey of prospective fractional buyers offers data of interest to fractional real estate developers. Results showed:
- An overwhelming 81% of potential purchasers said that their main reason for not buying a fractional interest was “economic uncertainty.”
- Only 20% blamed a lack of consumer financing.
- Just 4% preferred whole ownership.
An executive summary of the report concludes that, “the decline in the industry’s sales performance from the last quarter of 2008 through 2011 was much more due to external factors such as the economy and lack of financing and much less due to lack of consumer interest in the concept.”
While these encouraging findings bode well for future fractional sales, what actions can developers take now to generate fractional sales for today? Or, should developers just fold their tents and hang up a “Gone Fishin’’” sign while awaiting The Recovery to turn around The Economy?
A different strategy is proposed here:
Fractional property developers may consider providing sales training to their agents on how successfully to handle this and other objections that most agents fear will be the “silver bullet” that kills their chances for a sale.
Following are some philosophic underpinnings of the specific training presented below:
- Relationship selling. Successful sales efforts depend first and foremost on a trusting relationship that agents develop with prospects over time. The basis for trust is empathic listening.
- Importance of financial qualification. When prospects say that they “like” the property and that it meets their vacation needs, the only valid reason for them not to buy is lack of money (which should be tactfully established, if necessary, early on in Discovery, rather than at the last minute.)
- Understanding the prospects’ mindset. When financially qualified prospects who genuinely like the property offer “objections” to buying it, what they are really doing is avoiding the need to make a large financial decision because they are afraid of making a mistake. Sales agents need to be trained to explore the prospect’s underlying fears and address them.
- Professional attitude. Agents must act as professional counselors who help prospects make good ownership decisions for themselves. They step into the shoes of the prospect and see the world through their eyes. First, they conclude in their own mind that the property is suitable based on understanding the prospect’s needs. Then, they ask guiding questions that help prospects explore and clarify their objections. Finally, agents advocate the property and lead prospects toward concluding for themselves that they want to move forward toward ownership.
- Memorized scripts. Once appropriate scripts are written and agreed upon, agents must memorize and practice them out loud so their delivery is easy, natural and spontaneous, as if there were a teleprompter in their head. Top-producing agents have at their command numerous different closes and make multiple closing attempts—often five or six or more—before ultimately succeeding.
Following is a sample script agents can use with financially qualified prospects to address the “Economic Uncertainty” objection. Explanatory text is in blue.
Prospect: The economy is too uncertain right now.
Agent: I hear you saying that…. (Agent echoes what the prospect has said to show understanding and support.) Did I hear you correctly?
Agent: You raise an important point. (Agent supports.) Tell me more about it. (Agent explores.)
Agent: I understand your thinking. You’re waiting for the economy to improve, aren’t you? (Agent reframes the question to make it more specific and thus answerable.)
Agent: Well, it makes sense to wait for the economy to get better. (Agent supports.) But how will you know when that has happened? (Agent leads prospect to exploring his objection.)
Agent: And at that time, do you think real estate values will start going up or going down? (Agent leads prospect to exploring his objection.)
Agent: You’re saying that prices will rise when the economy gets better, right? (Agent verifies.) So, [name of prospect], isn’t it a good idea for you to profit now from today’s values—while time is still on your side? (This is Closing on the Objection.)
(The agent starts filling out a Refundable Deposit or Sales Agreement. This is the Order Blank Close.) Would you like the property in both your names or in just one? (This is the Alternate of Choice Close.)
(If the prospect resists, the agent adds:)
Agent: Please, [prospect’s name], help me understand better what is preventing you from taking advantage of this opportunity. You’re still enthusiastic about the property, aren’t you? (This is a Tie-Down.)
(Prospect persists in blaming the economy.)
Agent: I appreciate what you have said. (support.) If I were in your place I might think the same. (support.) So, what if the economy did head south? What do you imagine is the worst that could possibly happen? (This is the What If or Imagine Close.)
Agent: I understand your concern. (support.) On a scale of zero to five—with zero being the least likely, how likely is that to happen? (exploring the objection.)
(Prospect chooses a number.)
Agent: And if that did happen, how severe on a scale of zero to five—with zero being the least severe, would the impact be on your family and yourself?
(Prospect chooses a number.)
Agent: [Name of prospect], After all is said and done, the risk of the worst happening is quite small, isn’t it? (Agent leads prospect to let go of objection.)
Agent: And the impact on your family and yourself would be minimal or non-existent, wouldn’t it? (Agent leads prospect to let go of objection.)
Agent: So, isn’t it plain good sense for you to begin enjoying right now all the vacation benefits you have said you want such as, the ocean views… (The agent nods while mentioning each of the items the prospect has said s/he likes, pausing after each one to get a reciprocal nod or word of approval). (This is the Summary Close + a bit of NLP.)
Agent: You wouldn’t want to deprive your family and yourself of all these benefits, would you? (This is the Take Away Close + emotional factors + a tie-down.)
Agent: In fact, in times like these, family vacations are even more necessary than ever, aren’t they? (This is Closing on the Objection + emotional factors.)
Agent: Then, with your authorization we can move forward with membership. (The agent hands the prospects a pen. This is the Pen Close.)
Another of the many more possible closes is the old Ben Franklin or Balance Sheet Close. A video of it is at: http://www.candogo.com/search/insight?i=1628.
Basically, no matter what prospects say, nine times out of ten their “final objection” is really “price.” Agents need to learn how to uncover this final objection—or to raise it themselves pre-emptively, if necessary. For example:
Agent: [Prospect’s name,] I hear that you are concerned with economic uncertainty, but I sense there may be something else. Please, level with me, is it about the money?
To summarize, though the fractional real estate industry has been through difficult times, but a recent Fractional Life headline reads, “Ragatz report indicates light at the end of the tunnel.” So, this spring, there is reason for optimism.
In the memorable words of football coach Vince Lombardi, “Quitters never win, and winners never quit.” More and better sales training holds the key to future success in profiting from what many believe is the pent-up demand for fractional ownership.
What are the buyer objections that your sales agents fear most? Share them here, and you might see dialogues posted here on how to respond to them.
David M. Disick, Esq. helps fractional developers secure financing, attract more buyers, close more sales and earn more profits. He is author of Fractional Vacation Homes: Marketing and Sales in Challenging Times which offers many more valuable closing scripts. Order the book or contact David at: http://www.TheFractionalConsultant.com.