Do you have a company-wide standard for your prospect rating system? Does everyone in your organization (sales, marketing, and management) agree on what is an “A” prospect versus a “B” prospect, and so on?
Having an organization-wide agreement about how prospect ratings are developed is a critical part of managing the sales funnel effectively.
Standardizing your prospect rating system can be a simple way to boost sales. A clearly defined rating system can sync up sales, marketing, and management efforts to create more powerful marketing messages, more effective sales follow up, and management coaching opportunities.
Prospect rating systems are likely to vary from home builder to home builder, but here’s an outline that you can use as a starting point. Your prospect rating system may differ, but if you don’t currently have a defined system this framework may help start the discussion within your organization:
“A” Prospect: Can Write a Check Today
This is a prospective buyer who has been to the community, toured the models and production homes, has been pre-approved (preferably with a Preferred Lender) or has shown proof of funds to pay cash, has identified a specific plan and lot preference, does not have a house to sell, and can come in and write a check today. An “A” prospect has already cleared their major objections, either with a sales agent or through their own research.
“B” Prospect: Can Write a Check Within 1-3 Months
This is someone who has a house to close or several offers on a house to sell (assuming your builder does not taking contingencies), a web prospect that has not been to the property but has been pre-qualified by a lender and has spoken with an agent who identified needs and wants, or a buyer who is waiting on funds (bonus, settlement, investment proceeds) before going into contract. Essentially, someone who has a few short term obstacles but could write a check within 30-90 days. A “B” prospect may also be someone who is able to purchase but has some objections and is continuing to look at other property.
“C” Prospect: Can Write a Check Within 3-12 Months
This might be a buyer who is having a difficult time selling their current home (or they haven’t listed it yet), buyers who are repairing their credit or saving for a down payment, buyers who have just started the process of looking for a home, or buyers who have registered online but have not been qualified by a lender or engaged with an agent. These are buyers who could write within the next 12 months.
“D” Prospect: More Than 12 Months (They Might Refer)
These are prospects that register online but never open a subsequent email or return agent calls after more than 7-10 attempts, sales office visitors who are tire kickers (looking for decorating ideas, neighbors), prospects who have dropped out of the market (upside down on their current mortgage, lost their job), and anyone who is more than 12 months from making a decision (future empty nesters or retirees). Although this group does not represent your next sale, they can be a powerful referral engine.
Other Miscellaneous Ratings
I like to add two more: a random letter (“X”) that refers to all who have opted-out of further email, and another (“Y”) for buyers who bought and closed elsewhere.
That’s our take on prospect ratings. Is this similar or different than the rating that you currently use? What would you change on this list? Tell us in the comments below.
2 Comments on "A Basic Guide to Home Builder Prospect Ratings"
Great write up Dawn! I agree that a company wide set of criteria for rating prospects is important; and that sales, marketing, and management should all be involved and follow the same basis of ratings.
Thanks Lance! It’s great to see you here and I always value your feedback.