Our benchmarks have become the industry standard to measure the health and success of a homebuilder’s Online Sales Program. This comprehensive overview of data is sourced from many markets, both large and small builders, and established and new online sales programs. Data integrity is paramount, and the builders all track leads, appointments, and sales the same way. This blog is a collaboration of the online sales coaches at Do You Convert.
Let’s start by reviewing Q4 numbers first. It came as no surprise that lead volume was down by 24% from Q3. Lead-to-appointment increased by 4% in Q4, and appointment-to-sale conversions remained steady at 19%. The benchmarks show an increase in online sales contribution in Q4 at 51%, returning us to the contributions we saw in 2020-2022. This steady increase in online sales contribution is one of the primary benchmarks to monitor to ensure you are capturing and converting leads in your market.
So how did the year wrap up, how does that compare to 2022, and where do we see the benchmarks moving in 2024?
2023 Averages:
Appt Made to Kept Conversion 90%
Lead to Appt Conversion 41% (up from 36% in 2022)
Appt to Sale Conversion 20% (up from 18% in 2022)
Online Sales Contribution 47% (down from 52% in 2022)
2023 AVG Totals:
Leads 16,730 down from 20,714 in 2022
Appts 5,285 down from 5,685 in 2022
Sales 1,162 up from 1,062 in 2022
Total OSCS represented - 112
States plus Canada - 35
2023 Year-End Takeaways:
As always, we take special care to ensure the highest level of data integrity. We have access to data from over 112 online sales specialists, and we only use numbers from builders who consistently track their metrics the same way, ensuring we deliver the most accurate information.
There are a few trends that stand out in 2023.
Lead Volume Down:
This shouldn’t surprise any builder reading this. Lead volume decreased for 2023. Some might say it’s a return to normal, but it is a slight dip below normal as the headwinds of high interest rates and affordability issues limited the movement. Web traffic remained fairly robust, but the conversion from traffic to lead just wasn't in line. 2024 Prediction: We have already seen a sharp increase in lead volume. Pent-up demand, household formation, and a drop in rates will be positive boosts for builders.
Lead to Appointment Conversion Up:
Despite lead counts being down, we saw an increase in the lead-to-appointment metric, going from 36% in 2022 up to 41% in 2023. We attribute this to a more manageable lead count and also an increase in prospecting activities, maximizing every lead in their CRM. Quantity might be lower, but quality was higher. 2024 Prediction: We see that trend continuing and even ramping up through the spring market. Available inventory and financing incentives will continue to be a positive driver for Online Sales Programs.
Contribution Slight Drop:
Online sales overall contribution to company sales did see a bit of a dip from 2022 to 2023, going from 52% to 47%. This is the result of a normalizing market. In past years, market conditions pushed leads through online sales as a result of the market conditions. Now, we see a healthy mix of both online and walk-in activity. Of course, there is something to be said about hesitancy in the buyer due to interest rates and market conditions. This hesitancy is resulting in a lot of pent-up demand in the market. Market conditions have also caused lag time to increase, meaning it's taking longer for buyers to fully move through the process. 2024 Prediction: Online contribution returned to the 50%+ range in the 4th Quarter, and we anticipate it remaining in that range for 2024.
2024 Areas of Focus:
- Prospecting will continue to play a big part in boosting lead-to-appointment conversion metrics. Make sure your outreach is timely, targeted, and valuable.
- Demonstrating speed to lead will be a game changer in getting engagement in 2024. Get in touch with leads within the first five minutes to get the best results and response rates.
- Personalized outreach with leads is more important than ever. Make each lead feel seen and heard, and help them find the best fit for their specific situation.
- Handoff will remain important. Perfect this process both online and onsite to see more shown appointments. With fewer opportunities, we have to roll out the red carpet experience for appointments.
- Make sure that all incoming traffic and sources funnel through online sales. At a 20% appointment-to-sale conversion, you cannot afford to miss out on any opportunities here.
- Figure out your company's lag time to help with forecasting. How long does it take for a lead to turn into an appointment for your company? How long does it take for an appointment to turn into a sale?
- Make sure you have the right person in the seat in your online sales department. Are your customers getting the kind of experience they expect?
