The selections clients make for their new homes can play a key role in delivering extra revenue. But for home building companies to generate additional income from upgrades, they need to carefully align their customer experience goals with their pricing strategy. This is where an Online Selections pricing methodology comes in.
Let’s look at how an Online Selections pricing methodology can boost upgrade revenue, improve customer satisfaction and speed up the Selections process.
How it works
First, we’ll learn how Online Selections pricing works within Constructive.
Pricing can be handled in two ways:
- Most simply, showing “Standard” and “Upgrade” items with no dollar value displayed; or
- Best use case, showing “Standard” and displaying an actual cost for an “Upgrade.”
Business Development Manager, Steph Schumer, explains, “Selections pricing in Constructive gives builders a means to show clients immediately what is included in their home build as standard, and what is an upgrade.”
Pricing for success
The best pricing strategy? Our experts unanimously endorse displaying the actual dollar amount of upgrades, rather than simply showing “Standard” vs “Upgrade.”
When upgrades show a dollar value, Constructive can help your clients make decisions about what they’d be happy to spend extra money on, well before the Selections meeting. This saves your Estimators’ time, not to mention back-and-forth emails and calls while they weigh up whether the upgrade is a must-have.
“Builders should present as much pricing as possible to clients,” says Lizzie Mooney, Client Success Manager. “By showing prices prior to the Selections meeting, your clients are more informed on their spending, can decide what a viable upgrade is for their budget and don’t have to wait for Estimators to gather quotes.”
“This is where you’re going to see real benefits,” advises Emma Lord, Client Success Manager. “Our builders notice a reduction in the cost of resourcing required for the Selections process through shorter appointments, less, (and sometimes even zero!), estimating time on upgrade quotes and quicker sign-offs from customers. Jobs get moved through the pre-construction journey so much faster.”
“Not to mention happier, well-informed clients that are confident to make decisions that match their budget. It’s a bonus for both you as a builder, and for your clients!”
Lisa Petts, Client Success Manager, agrees and recommends a staggered approach. “To begin with, we need to show your clients what’s included in their build. To take them to that next level, you could ensure their fitting upgrades — such as tapware and appliances — are priced.”
“These items are usually simple to implement and maintain, but they’ll give your clients a good understanding of what it’s going to cost to get the look they’re after.”
Lizzie adds, “I always recommend builders start with big ticket items that you already know the cost of: sinks, taps, appliances, basins, and if possible, cabinetry, as data shows these are items clients upgrade the most. Having prices readily available for them to make a decision contributes to a fantastic customer experience.”
“The key benefit of displaying these prices is that your client has had time at home to decide exactly what they like — and how much they’re prepared to pay for it,” says Lisa.
Utilise built-in smarts to help clients make decisions faster
“If you have multiple inclusion levels or specifications, Constructive will automatically show the client the correct standard product for their conditions,” says Emma.
Steph adds, “The upgrade cost for a particular item might differ based on an individual client’s specification. Constructive is flexible and customisable so you can configure that into your strategy.”
Lizzie explains how price bands can streamline the pricing process for builders. “In the Prices tab, we can create a price band for a group of choices. Essentially, we’re giving multiple items the same price instead of having to price each one individually to save time. Once the item is priced, you can then set a different price for the same item based on a specification or inclusion level. And, you can automatically price the same item differently based on Brands or Business Units.”
“The total variations are calculated in real time as the client makes their choices. That dollar value is clearly displayed at the top of Online Selections so they can see what they’re spending on upgrades as they go,” says Emma.
Customisable and flexible
“If you’re selling standard model designs, it’s easy to incorporate pricing against all upgrade items and expose these RRPs to your clients. Constructive can hold quantity data in the back end of each house model, so it knows how many bricks, or length of stone is incorporated into each model,” says Steph.
“In more customised home designs, there will probably be a mix of prices, upgrades and more size-specific upgrades. These can be left as “Price on Application” — and this wording can be customised to suit your business — until your Estimator can price the item for that specific home.”
“In these instances, categories can be used when presenting the Selections. The client instructional area can advise clients of categorised price options.”
“For example, while upgraded brickwork would be dependent on how many bricks are being used, you might have a standard category of bricks, followed by upgrade categories such as Category 1 ($50/sqm more than standard) and Category 2 ($75/sqm more than standard).”
“It’s about taking care of your clients by offering them as much information as possible.”
Emma adds, “Some items require quantities to be calculated by an Estimator, or a quote obtained from a supplier or trade, so a set price can’t be displayed. Using “Price on Application” means your client understands they’re selecting this item pending approval of the price.”
“Once you have the price, you can input it using the “Price Override” function. This way, it will still be calculated in the total variations price for your client.”
Transparency for trust
Being transparent means integrity and honesty in all customer touchpoints, including pricing. Customer experiences that build trust create satisfied clients and enhance your brand.
“Pricing being displayed allows your clients to make informed decisions while keeping their budget front of mind when they’re preparing for their Selections appointment. Transparency gives clarity about what it’s going to cost, and that can really go a long way in fostering confidence and trust in your business,” says Emma.
What to include in your upgrade range
“Ensure the products you are choosing to display as upgrade options are reflective of the choices your clients are making. I’d recommend including any that appear in your display homes, as your clients will want to follow the trends you show them,” advises Emma.
Having a range of upgrades in terms of pricing is a good plan to encourage upgrade spend, too.
“Include a few options that are not too big a jump from your standard range, and perhaps some more aspirational options as well,” says Emma.
“If some of the options you display are only a small step up from the standard range, you may see an increase in upgrade revenue when clients see the price difference is not too much more. You want to ensure the upgrades you choose to display aren’t too astronomical a gap between your standard range. It’s unlikely a large pool of clients will select those items and may leave your standard range looking inferior in comparison.”
Precision and accuracy with reporting and Intelligence data
Steph notes Constructive reporting can identify all non-standard items to make sure you’ve covered all items to be priced.
“You can cross-check these with Estimating and provide any additional POA pricing that may not have been available up front.”
“To safeguard accuracy, whenever you add a new choice to your Selection template, it will always show up as POA until you price the item. This reduces the risk of an upgrade item accidentally showing up as a standard inclusion,” says Lizzie.
Once pricing is set up, or any changes have been made, builders can review pricing configuration and overrides within Constructive’s Intelligence Analytics.
Data Engineer, Nigel Stacey suggests, “Builders could use the Duplicate Prices table to confirm the configuration doesn’t result in any duplicate prices for an item.”
Lizzie adds, “If there’s an item with two different prices and is conflicting, Constructive will automatically pick this up and email you once a week to let you know there’s an issue so you have the opportunity to fix it.”
Nigel says, “The Aged Prices table is useful in identifying prices which may be out of date,” he adds. “And the Price Overrides page — which includes both overrides to specific dollar values and overrides to standard — will help highlight Selections that often have their prices overridden. These may be candidates for a price update.”
Steph agrees, “If particular items are consistently price overridden, you might choose to incorporate this pricing up front to save your Estimator pricing them individually each time.”
Emma advises checking data to identify trends and provide insights when reviewing your standard inclusions, such as, “Total Spend — how much are your clients spending on upgrades, on average? Categories of upgrades — where are your clients spending extra money? Is it on plumbing fixtures, on cabinetry upgrades, or appliances? What is the most popular choice in each category?”
Steph endorses watching for trends, too. “Constructive Intelligence provides Selections insights into the most frequently upgraded Selection groups so you can find out which items are generating the most extra revenue.”
Steph recommends a quarterly review of Selections data. “This information will ensure you’re across what’s increasing your bottom line in terms of upgrades.”
Online Selections pricing methodology takeaways
- Transparency and peace of mind for clients increases customer satisfaction.
- Reduce Selections appointment meeting times through displaying as much pricing as possible.
- Eliminate or reduce variations and estimating work by examining data, pricing upgrades up front and within categories.
- Potentially increase upgrade revenue.
You can learn more about Online Selections pricing with these additional resources
How Kingswood Homes increased upgrades revenue by 120% with Constructive
Simplifying the process with Online Selections
One stop client Selections documentation with Online Selections
Creating a seamless online/offline showroom
If you want your clients to succeed and have a great experience making Selections online, try leading with presenting as much pricing as possible. Transparency of costs up front means clients will make budget decisions grounded in reality, while the pre-construction Selections process will progress faster and with less effort for your team.
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