Sunday, February 13, 2011


Twice a year there are signs that it's either spring or fall in the modular housing industry.  Sales reps start moving from factory to factory just like the robins in spring and the first frost in the fall.

The reasons for this varies for every sales rep that actually makes the move.  Some are working for factories that are sinking with the economy and want to jump ship while they still have a builder base they can take with them.  A few might have been told that their compensation package was being changed from base plus commission to pure commission.  And there are some that haven't sold very much the last couple of years and jump ship just before they are let go.  Whatever the reason, the builder and the home owner are the ones to pay the price for these reps playing musical chairs.

Also, when a factory has experienced low sales volume, they tend to kick their reps to the curb and start enticing high volume producing reps to their company.  Without a real plan to incorporate these reps into their sales staff, most of them will become disillusioned and seek another factory or quit the business altogether.  Then everyone loses.  This is a very incestuous business and it's not usual to see reps changing often as brand new reps take at least 6 -12 months to start bringing in sales.

Modular new home builders that decide to stay with their sales rep and follow them to the next factory must learn a whole new set of standard specs, new policies and new pricing.  If they were in the middle of finalizing a contract with a home buyer, they have a tough decision to make.  Do they roll over their customer to the new factory and risk losing them if they really wanted to buy from the former factory or do they stay with the factory and have a new sales rep help them and maybe convince them to stay with the first factory.

Modular home buyers also have tough choice to make.  They were convinced that factory X was the greatest one to buy from and now they've learned that their builder is switching to factory Z.  Will this set their plans of home ownership back a couple of months until new plans are drawn and they might also want to visit the new factory.  And if they stay with factory X, who will build their new home? 

Factory Sales Managers must realize that having a sales rep leave could possibly mean that the territory the rep serviced will go with them to the new factory and it will be a fight to keep the builders in the fold.  Discounts and personal visits to the builders are the first line of defense against them switching factories.

I have watched several factories over the years and the turnover of sales reps is astounding.  One factory in PA turns over their reps so often I swear they've taken the locks off the office door.  Another east coast factory that used to have 16 sales reps now only has 6 and these reps have abandoned servicing some areas completely.  Factory management advertises that they still deliver to these areas but without builders in those areas, they simply take the prospects name and when they get a lead, the rep for that area calls other factory's builders and tries to turn them by offering the leads.  

Factory management must work with their current sales staff to build a strong team that won't jump ship when the robins show up on the parking lot.  Sales Managers must take the bull by the horns and start an effective training and recruiting program that insures that when the first frost hits in the fall that they won't have to worry about their sales reps playing musical chairs again.


Sophie said...

Coach, you've given me a viewpoint I never considered before, the customer's. I wonder how a builder does change the customer's mind and convince them to go with another factory after they have decided not only on their builder but also the factory that is going to build their new home.
Keep up writing this thought provoking articles.

Anonymous said...

If a factory wont treat their own salespeople fairly, what chance does a customer have of being treated fairly?

Curious said...

Coach, I just noticed that you've added another modular factory advertisement to your blog. Is Modular Home Builder getting bigger and starting to accept factory ads or are you just doing it out of the goodness of your heart?