Monday, March 28, 2011

WHAT MODULAR BUILDERS ARE SAYING ABOUT THEIR FACTORIES

Last week I sent a small questionnaire to 135 modular home builders across the US asking them to tell me about the factory that supplies them with modular homes. 


From that, 57% of the respondents were from the Northeast, 15% from the West, 11% from the Midwest and 17% from the South. 

The answers were very encouraging and I'd like to pass them along to all the modular factory owners and management.

Here are the questions and their answers:

1. Do you buy homes from several modular factories? 
Only 38% said that they buy from multiple factories.  Most thought that having a good relationship with a single factory was the key to their success.  The ones that said they bought from more than one factory gave the unsure health of the factories as one of their reasons.

2. What are they doing to help promote your business?
Co-op advertising was the biggest way most factories are helping the builders but even that is getting harder to get.  Some of the builders said that factory leads have dried up and others said that their company's name and link are no longer on the factory website with most of these being in the Northeast.

3. Do they have a "partnership" relationship with you and your business? 
This was a tough question for some of them to answer.  Most (88%) thought that the factory they bought from viewed them as a valuable asset, helping the success of the factory.  A few said that they never felt they had a good relationship with their factory but have to buy from them because their prices were the cheapest.

4. Is your factory sales rep an integral part of your success or are they just an order taker? 
This one really surprised me.  All of them said that their sales rep was a very important part of their success.  Only one builder thought that his sales rep was just adequate but still wouldn't trade him.  However, (pay attention Factory owners and Sales Managers), most said they would follow their sales rep if he/she went with another factory.  


5. How is service after the sale from the factory?
Where they found the sales rep to be important to their success, most found the factories service departments to be the weak link.  Whenever they had a problem with a house, the service people would try to nickle and dime them to death or simply stop taking their calls.  Contacting their sales rep or factory management helped a little but for the majority of the builders, they found the service to be lacking.

Even though the service departments were considered less than stellar by most builders, the overall opinion of the builders is that the factories are doing an OK job considering what the economy is going through. 

11 comments:

Anonymous said...

Question #4 This is absolutely correct. Sales Reps have the relationship. Builders will follow the rep.

Question #5 You would think that a factory would want to know how they could improve their processes to minimize charge backs and help make the on site work flow more efficiently. Not true. When a builder does not charge back, it rewards the factory for poor workmanship.

Bill said...

I've been in the modular home business for over 30 years and have changed factories several times over the years because of service problems. Some factories don't want to repair or replace anything even if it was clearly shown to be their fault.
I think the reason is that I only buy about 4 or 5 houses a year and consider me a small fish that wouldn't hurt them if I left.
My current factory seems to have a good service department and it's a shame I can't buy more than a couple of houses a year from them because of the economy.

Anonymous said...

Good to hear the responses about Reps. One of the best lessons I learned from one of my builders was after we had established a good business relationship, I asked him how I compared to his last Rep as I knew the builder had some issues with him and I didn't want to repeat them! He told me the difference was that I told him what the factory could do and not what they couldn't do. He said I provided information that helped him sell houses like what the company had been doing that was new with designs, products that we've used, etc... It wasn't always perfect, but both the builder and my company were successful because of each other. One thing I am seeing as I work with my sales reps now is that they need to be up on what is happening in their respective market areas...i.e. what are the current challenges with codes and permits, financing opportunities, utility incentives for energy efficient and green homes, etc...Sales Reps need to be a resource beyond the factory spec sheet for their builders so both can succeed in this tight market.

Heywood said...

#5- I believe factory service is the weakest link in the chain. Many service departments are operated with a manufactured housing mentality, which means deny, deny deny!

Anonymous said...

I agree with heywood. Not only do they deny requests for service, they drag their feet so long that most builders just go ahead and fix the problems so that the homeowners can move in. If Ford or GM did this to their customers and dealers, they would be out of business.

Anonymous said...

There is no quick fix with factory service issues, but I agree, from the real world of the sales rep, just be honest with your builder and they will hang in there with you....

Anonymous said...

It's the service stupid! The automobile analogy was in the right vein: imagine selling a high ticket item and then completely failing to service it after the sale.

I love my factory for all that it does - pricing, service at the sale, design service, polite service. And then I take delivery and the follow up is TERRIBLE. It's like dealing with teenagers when it comes to requesting legitimate help. I don't feel like they're pinching pennies; it's more like flat out ignorance: of communication, record keeping, follow up... it is exasperating as hell.

These PA factories keep hiring the same people based on skill sets that have no basis in customer service.

Their motto: "keep doing the same thing and expect a different result". They have got to look outside the industry for once.

Dealing with modular factory CS is, without a doubt, the worst part of my job.

Anonymous said...

I don't agree with #4. I've seen fabulous reps land at poor factories and it will drag the once solid rep down.

Anonymous said...

Regarding #4, most reps lately have been moving due to desperate factories willing to do whatever is needed to get a deal. Ask them what type of discounts go along with the following of the rep. More than likely it is based on #1 price, and #2 the rep.
And #5. Everyone points the finger towards the service dept. Look at it this way. the modular service dept. is like the paramedics responding to an accident. They didn't cause the accident and MOST of the time are there to help out with a tough situation. The problem is multi-faceted, the economy is down, so the quality of the builders in allot of situations suffers. The builder either gets in over their head with product complexity, or has a sales rep that doesn't get detailed enough and then the product doesn't meet the expectations of the home buyer. The next issue is the builder (broker, real estate agent, etc) isn't a hammer and nails type of person that has a general understanding of the issues and then replacement material is ordered incorrectly, or what generally happens the root cause of the problem isn't what the "builder" reported in the first place.

john haddad said...

Most factories treat their service departments as janitors - They want these guys to clean up the mess at no cost, but don't look for the department who made the mess in the first place. Sales and Service is one in the same.

Anonymous said...

You should have asked if builders work with architects that specialize in modular design. We get calls from factories on upcoming projects.