Transforming Design Centers into Profit Centers

by Kay Green

Savvy builders know that options and upgrades can translate into big profits in the homebuilding industry.  Your design centers (and model homes) can make or break your sales.  The presentation of your options and upgrades is equally important to the products you choose to offer.  So…to help you maximize your profits, here are a few of the basics of “design center design.”

Design Center Scale
For a small-scale design, many builders today are building design centers in the 2-car garage of a model home.  This set-up works well for many builders and is easily organized with built-in tables and displays.  Larger design centers, 2600 square feet on average, are also gaining in popularity.  Every year, 400 to 500 new homes can be color coordinated and designed through a design center of this size.

Design Center Layout
For a design center to be successful, it must be arranged logically.  The products shown should progress from exterior to interior selections, organized room by room.  The main areas (living room, family room, etc.) should be displayed first, followed by the kitchen, baths, and so on.  Certain products (i.e. cabinets and flooring, etc.) should be grouped together to simplify the selection process.

Tips to Maximize Profits
• Include as many options as possible in model homes – people usually don’t buy what they cannot see.  And make sure everything in the model, from the built-ins to the security system, is available in the design center.
• Train onsite salespeople to demonstrate the options and upgrades in the model.
• Consider that a sales background is generally more important than a design background when hiring design center consultants.
• Choose options and products that cannot be easily compared to home center stores or your competitor’s options.
• Group related options together to sell as packages (i.e. built-ins and specialty accent lighting, overall appliance upgrades, etc.). The selection process will be easier for the buyer and more profitable for you.
• Make sure that design center consultants do not oversell upgrades.  The buyer must be able to qualify for the mortgage.
• Locate the design center near the mortgage company when possible for ease of communication and one-stop shopping.
• Make up-to-date prices available to buyers through an online options selection tool so there are no hidden costs and they can access the information quickly and accurately.
• Create a “Dream Book” of information about the products you feature to prepare the buyer for upcoming selections.
• Use models for reference (particularly for options and upgrades).  Some buyers will request exact model duplications.
• Provide plenty of lighting for color selections.  Natural lighting is best, if possible – incandescent lighting is a satisfactory alternative.  Fluorescent lighting is your least desirable option.
• Consider showing larger samples of items that may have expansive pattern variations, including some granite, carpet, etc. These samples will provide more accurate representations of the materials.
• Designate an area in the design center for children to be entertained. This will help prevent unwanted distractions.

As with any retail business, the packaging and presentation of your merchandise is the key to your success. Perhaps a few of these basics will help your profits soar!

Kay Green is President of Kay Green Design, Inc. (www.kaygreendesign.com).  She can be reached at (407) 246-7155 or via email at ashley@kaygreendesign.com.

Comments

[Rick]

I too have notice more and more 'design centers' for home builders throughout Arizona. I work closely with many builders and have seen upgrade options several pages in length!