Duane Black has seen company after company in the home-building business focus only on their percentage of profit in every final sale. That’s all they think about all day long because that’s why they think they’re in business. That’s how they think they’ll be successful. External profit. They focus daily on the final, outside result. As Duane says:
And every one of them I observed closely had their profit margins decline over the years, because all they focused on was the bottom line. Over time they would find themselves in an ever more competitive environment delivering an average level of product, an average level of customer service, and an average level of community. But customers don’t want to pay a premium for “average.” Customers don’t get excited about “average.” And so these companies ended up not making big margins. Soon they had to do bigger volume to try to offset their mediocre product. And their volume negatively affected their quality, so the spiral went downward and it wasn’t long before they were in real trouble. That’s the tragedy of a purely outside focus.
Duane’s many years in the highly successful SunCor Development Company have been characterized by the company’s inside focus. He’s helped lead their commitment to working on the inside rather than the outside.
SunCor decided long ago not to obsess about volume of sales. It trusts that volume will occur naturally; it allows volume to show up when volume is appropriate. It’s more focused each day on perfecting the inner system that will create great communities and phenomenal land planning. For example, it insists on always having good architecture, it builds only in great locations, and it boasts a staff of people who love what they do and are aligned with it, and therefore are naturally, effortlessly committed to doing a great job.
The company has also thrived on a noncompetitive, non-intimidating sales environment. Allowing success to occur naturally rather than trying to force it. As Duane says:
We don’t say to our salespeople “You will sell 10 houses every month.” If we have a month of really bad weather and no one comes to our sales center and they don’t sell any houses that month, we don’t have a problem with that. We have said to them, “Look at the opportunity you have, here. You get to represent a quality community. You get to represent a quality home. You get to represent people who you know are going to follow through and deliver the product you’re promising. What an opportunity you have to be successful. You don’t even have to work hard at this. You just get to share with people the incredible opportunity that being in this community would be for them.”
Salespeople know they’re telling the truth when they sell this way. And customers know the company will take care of them after they buy. They know from SunCor’s history that their house will grow in value over time. So it’s not a hard sale. If you’re a SunCor salesperson you don’t have to decide whether your chair should be higher than the customer’s during negotiation, or when you should push back from the desk, or when you should be silent because this is a “closing moment.” All of those artificial and manipulative strategies don’t have to play a role in the process.
All you have to do to be successful as a salesperson is to share what you’re excited about and proud of. Share what’s inside you. Customers respond to that and it becomes an easy sale. Salespeople succeed when they know what they’re really selling. When they know that final, intangible experience of joy that a homeowner feels from moving into just the right home.
Business guru Tom Peters gives seminars on the importance of inner design versus outer striving. On one of his slides he quotes a Harley-Davidson executive who said, “What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns, and have people be afraid of him.” The hands-off manager helps a salesperson go inside to find out what they are really selling.
Going inside is used by Duane when he negotiates with landowners to do joint ventures with SunCor. That’s why he’s been able to make buys that make people around him say, “I can’t believe you did that. Why would anybody do a deal like that? How could you buy 20,000 acres for $100,000 down and no payments except out of sales?”
Because the landowner became a partner. The landowner was excited to be a part of what SunCor was doing. He wanted to share in the same passion for producing something to be proud of. It wasn’t because his accountant told him it was the best short-term deal he could get. It wasn’t because it was the highest amount of up-front value or the most immediately profitable. It was because he felt in his heart that it was how he would be most successful over the long run. He knew that partnering in a sincere quest for quality would likely bring him the most value over time.