Setting the Marketing and Sales Goals

Identifying the Steps in Your Pipeline and Setting Goals

Not every potential buyer who contacts you will buy a home. There is always fallout along the steps of the marketing and sales process, and it’s important that your marketing efforts get enough people into the beginning of the pipeline to end up with enough closed buyers at the end. It’s also important for you to know where fallout occurs and why.

For these reasons, it can be very helpful to break down a marketing and sales goal into a pipeline that describes the key steps between first contact with a potential buyer and closing a sale. When you’ve identified those steps, estimate the number of potential buyers you must have in each step to result in the desired number of closed buyers. This will help you plan the timing of your marketing activities and build capacity to process all the potential buyers you attract.

The number of potential buyers you need to make first contact with to achieve a sale varies depending on how precisely your marketing is targeted to buyers that are eligible and qualified (as opposed to a wider universe of anyone who is interested in homeownership). For example, for a developer who expects to get most of its buyers from an in-house homebuyer education program, Table 1 shows a possible scenario.

Table 1: Sample Mass Marketing and Sales Pipeline for Homebuyer Education and Home Sales
  To Sell 1 Home To Sell 10 Homes To Sell 30 Homes
Two-week mass marketing blitz (e.g., radio ads, postcard drop, meetings with lenders, presentations in homebuyer education classes, e-mail blast, etc.) 1 5 8
Phone inquiries 50 500 1500
Registrations for orientation session 25 250 750
Participants in orientation session 18 180 540
Registrations for homebuyer education 9 90 270
Graduates of homebuyer education 5 50 150
Mortgage-ready offers on homes by graduates 2 20 60
Successful closings 1 10 30

The marketing in this scenario is not geared directly to home sales, but more to attracting people to participate in homebuyer education as the first step toward a potential home purchase. This example shows a large number of initial inquiries relative to final sales (50:1), because there are many steps along the way just to get a potential buyer to the qualified and eligible stage. They may graduate from homebuyer education and still be years away from having the credit and savings to qualify them for a first mortgage. Even if they are qualified, they will not necessarily want to buy your home.

If someone else is conducting the homebuyer education for potential buyers, and your marketing is more targeted to people you already know are eligible and qualified, your ratio will be narrower. Your job in this case is simply to get eligible and qualified buyers interested in your home, as opposed to casting a wider net to capture a mixed pool of buyers who will be ready to buy in six months, a year or several years from now. Table 2 provides an example.

Table 2: Sample Targeted Marketing and Sales Pipeline for Eligible and Qualified Buyers
  To Sell 1 Home To Sell 10 Homes To Sell 30 Homes
Two-week targeted marketing blitz (e.g., home tours for neighbors, homebuyer education class presentations, postcard drop to area retailers, meetings with lenders, real estate agent open house and luncheon, e-mail blast to mailing list of homebuyer education graduates, etc.) 1 5 8
Phone inquiries 20 200 500
Public open house events 1 5 30
Public open house visitors 10 100 300
Mortgage-ready offers on homes 3 30 90
Successful closings 1 10 30