Gift Baskets Are So Old-School

One of my earliest childhood memories is of receiving an annual birthday card from my dad’s insurance agent, Norm Butler of Lafayette Life. I had no idea who this guy was, but every year I looked forward to getting my card from Norm.

His method worked great to remind me about him on my birthday…but with my short memory and even shorter attention span I always seemed to forget about Norm the rest of the year. Unfortunately for Norm, my fond memory of him didn’t put any money in his pocket.

For more than a decade, I worked in new home sales as a salesperson and as a sales manager. Many builders, including four-of-the-five I’ve worked for provide gift baskets to homeowners at closing. Typically the salesperson delivers the basket as the homeowners are moving in, or shortly thereafter, with the goal of gathering names of their friends and family that also might be interested in buying in the neighborhood.

One builder I worked for took this to the extreme. At contract signing, the husband received cookies and the wife received flowers delivered to their work. At the pre-construction meeting the couple received a package with goodies including T-shirts, and at closing they got a large gift basket with gourmet coffee, chocolate, and various trinkets with the builders’ logo. All-in-all these “referral gifts” added up to nearly $500.

$500 may seem like a cheap price to pay if it encourages additional sales. But the problem with this approach is that it is not actually providing the homeowner with anything that helps them tell the story to their friends. In fact, many homeowners would actually say things like, “Wow…I just spent $250,000 on a home and you’re giving me a branded T-shirt.”

With new homes, like any large purchase, the excitement level is highest just after the purchase has been made. We don’t have to ask for referrals, our homeowners are telling everyone they know about their new home. Notice the emphasis is on the word their.

Why do builders continue to use old-school techniques that don’t work? When they could use tools like the URBaCS Referral Builder application that help their homeowners share their excitement from the beginning?