Below is a graphic of “Average Conversion Rates” taken from a presentation by the Bokka Group at the 2017 DCX Conference
According to these average conversion rates, a home builder would need to generate the following for every home sale:
- 5 Appts / 25 Leads / 5,000 visitors / 500,000 impressions
Using these average conversion rates, you can work backward to determine where you need to focus your sales and home builder marketing efforts. It’s important that builders track these conversion rates through each stage of the sales funnel. By doing this, you can stay focused on the stage of the funnel that will have the greatest impact on your sales. Keep in mind, these are only average conversion rates, and they can vary from builder to builder. For example, home builders that have a person dedicated to all online leads (an online sales consultant) tend to see much higher lead-to-appointment conversion rates.
These ratios are usually provided by publishers that run your ads or listings on other websites. It's also called click-through rate or CTR. So out of the number of times your ad was viewed (impressions), you're calculating how many people clicked through to your web site or landing page (visitors). The highest conversion rates will always come from publishers that provide content to active home shoppers (e.g. NewHomeSource, Zillow, or PPC ads targeting phrases like "new homes Denver").
There are very broad ranges of this type of conversion rate because there are so many different places where the ad can be run. The lowest converting ads tend to come from banner ads displayed on general purpose websites (e.g. local news outlet web sites) or 3rd party affiliate sites. Keep in mind low conversion rates here aren't always a bad thing here, especially if your goal is brand awareness. For example, if you're opening a new community, you may just want a high number of impressions to let people know it's coming soon. Clicks may not be the goal.
Once you attract visitors to your web site, the next conversion in the funnel is to engage them enough to become a lead. This is where most digital marketing strategies tend to focus. Tactics here include contact forms, downloadable gated content, user logins (to save plans or favorites), etc. Here's a great article listing proven methods to capture more leads on a home builder web site. The 0.5% average visitor-to-lead conversion rate listed above is for most builders with a passive web site that has little more than a contact form for converting leads.
Bokka clients regularly see conversion rates above 10% when using a landing page campaign specific to the inbound source. For example, a grand opening campaign targeting new home shoppers in a certain area, linking them to a page with content specifically tailored to them.
Once a lead is in your home builder CRM, the goal is to get them to schedule an appointment with a sales person. This is where follow-up is crucial. An average of 20% of your leads will eventually come in for an appointment or walk-in, with little to no follow up. The faster your sales team or Online Sales Counselor reach out to the lead after they submit a from or call, the higher your chance of conversion. Home builders with a dedicated online sales program have much higher lead-to-appointment conversion rates, as they don't rely on the on-site sale staff to follow up with the prospects, when they may be busy with face-to-face customers. For more info on this type of program, get this Ultimate Toolkit for Online Sales Counselors.
This is the rate most builders are already tracking. It's the ratio of number of appointments or walk-ins (model center traffic) to those that write contracts. There are many things that can influence these conversions, and generally speaking the best way to improve them is through new home sales training and coaching. Again, those builders that invest in an online sales program have higher appointment-to-sale conversion rates because the quality of appointments that have been set by the OSC tend to be much higher. It's quite common for a builder with a successful program like this to see well over half of their total sales coming from online leads and appointments.
If you're interested in hearing how a program like this could work for you, just send us a message or schedule a free consultation below. We'd love to help.
How a top 50 builder crushed these visitor-to-lead conversion rates
Builders that work with the Bokka Group for their home builder marketing strategies see much higher conversion rates than these. For example, this top 50 builder achieved an 11% visitor-to-lead conversion rate from paid search traffic. And by closely tracking this investment they found they had achieved a 96% decrease in cost-per-lead. See how they did it here >>
3 Examples of Builders that Outperformed Industry Average Conversion Rates
Are you a home builder interested in tracking your sales funnel conversions? How about getting the best ROI from your digital spend while crushing average conversion rates? If so, find out how the Bokka Group can help you do all of the above. If you’re still not sure, check out the following case studies.