Wednesday, April 20, 2011

WHY MODULAR HOME BUILDERS CHANGE FACTORIES

Modular factory owners are always trying different approaches to get new builders to buy their homes.  Sometimes they are successful and sometimes they're not.  But what I find interesting is that a lot of factories simply give away their builders without even knowing why they lost them.

I have been talking to some builders recently that shared their reasons for either changing factories or adding another factory.  Most of the time builders make their changes based on some rather interesting situations.

Service or lack of.  This has been an ongoing issue with factories for quite some time (decades) and we've explored that area enough.  This is not the main reason builders switch factories though.

Engineering capabilities.  This is what all the builders that switched companies said was their biggest annoyance. One builder in the Mid-Atlantic area wanted to add some green and eco-friendly items to his homes that required that they be added at the factory.  The factory owner told him that since he was the only builder that wanted them, they wouldn't make the investment in materials and training unless a majority of their builders wanted the same options.  The builder made a couple of calls to other factories in the area and discovered two that were already doing these things.  12 homes a year to the new factory.  0 to the old one.

Another builder wanted hip roofs and was told that they would have to be ordered by the builder from a truss manufacturer and be installed after the house is set which would leave the house open to inclement weather until they were installed, sheathed and shingled.  Also, the factory wouldn't or maybe couldn't be bothered to give detailed drawings of anything that they don't provide.  This time the builder, from Indiana, called another factory and learned that they not only do hip roofs in the factory, they also build their own truss and can build anything.  The builder switched.

Boring Floor plans and Literature.  Even though a vast majority of home buyers bring their own plans to the modular builder, they want to see what the builder's factory offers in the way of floor plans and other literature.  A couple of the builders I talked with are actually embarrassed to hand out their factory's plan books.  They look like plans from the 60's.  And when their buyers ask about Energy Star or cost saving options for their homes, the builder has absolutely nothing from the factory.  No builder I talked with left their factory because of this but they all added another factory to their lineup so they could offer more up-to-date homes.  If the plan books and literature look dated, the buyers begin to think that the factory might not be investing in other things.  Home buyers are funny about things like that.

Being taken for granted.  Nobody wants to be thought of as insignificant.  Neither do modular home builders.  If a factory ignores requests for help with a customer's needs or service, they will leave and look for a factory that will pay attention to the hundreds of thousands of dollars they will spend every with the factory every year.  I talked with a builder that has been selling modular homes for many years and said that after a new Sales Manager was brought into the factory and he rearranged the sales reps' territories, he was ignored by both.  He figured that he had given the factory over $33 million while he was with them but that's all gone now.  He's moved on to another factory where he is at least being heard.  Dumb.

There are a lot of reasons builders will switch factories but price was never brought up as the reason.  In fact, not one builder even mentioned it.  And if you look at the list above, there is nothing hard or expensive about fixing the reasons for builders defecting.

7 comments:

modular home place said...

The engineering problems are so true in some factories. As a sales rep I switched a builder over to my factory. The builder gave me signed off plans ready for permit sets by the "old" factory. When I gave the plans to the engineering I was expecting a duplicate of the plans I turned in...No way, the room sizes all changed.

I was pretty pissed off so I went to the engineer and asked him if he knew who bought our homes. He stated, "builders". I said "No - women buy our homes and when you put a few inches in the wrong place they become upset." The whole engineering department busted with laughter.

Anonymous said...

Last century I attended a "Modular Seminar" where one of the topics of discussion was "Why builders seek out new suppliers for their homes." The consensus answers have never left and are in line with Coach's assessment.
Number one was lack of service at all levels. Sales support and attentiveness, the responsiveness of engineering staff, the "Service Department" etc. The failure to value the builder as a client overwhelmingly led the list of reasons.
The second motivation was product availability and was split into two categories; the first was the inability of a manufacturer to provide homes in a timely manner while the second was the “hip roof scenario”, we don't do that! Either was a catalyst for the builder to seek a source that proved to be more accommodating to their need.
The final reason for leaving one for another was a bit more sensitive. It was based on a builder believing their importance, to the manufacturer, had diminished. This was exhibited by others being courted to either compete within the same market or ultimately replace their presence in a given sales area; some things never change.
I recognize there will always be the manufacturers’ retort to each but I wanted to further validate the conclusions Coach reached. Builders are like the rest of us when acting as a consumer. It really isn’t too much to ask to have your needs met and be treated not as another order filling a line spot but as the valued client I believe myself to be.

Anonymous said...

I switched because the sales manager and I had issues. Soon after I stopped buying from the factory and switched to another, the owner fired him. I would like to go back to the first factory because they build nice houses but so does my current factory.
I find it funny that sales manager that was fired is now a salesman for another company. I will never consider going with them because he is still there.

Anonymous said...

They do it because they don't feel the love after the sale, not that the salesman is lacking but company is lacking. A good salesmen can sell the first home but it's up to production, service and engineering (the plant) to sell the next home. And in many cases they are looked at as complainers, not real builders etcetera so they move on hoping brand x is better. And management just moves forward with the same old attitude (It's not us it's them) And I have seen it over and over and over. Anonymous

Anonymous said...

I am a member of a modular housing focus group. We recently discussed developing a short training course for service people.
The manufacturers in this group, rejected the idea as not needed.
How can we get the manufacturers to see that service is a big issue?
Do your readers agree that service training might be a good idea?

Anonymous said...

Coach, good job on the list; but, I have to agree that AFTER SALE SERVICE is probably the number one reason builders change suppliers.
I include in AFTER SALE SERVICE the actions of the sales rep in reinforcing the buy decision made by the builder; continuing to make the requisite visits with the builder; keeping the builder informed on the processing of the order; managing any change orders; and MOST IMPORTANTLY showing up at the delivery. And that is an area where the majority of sales reps fall short. Very few make delivery of the products they sale. Most will give a variety of reasons why they don't/can't make the delivery but the major reason is THEY DO NOT WANT TO SHOW UP.
A PRO will be there to support his client. He/she is there to handle any problems that occur. Take care of misfabrication, shortages or the variety of problems that can rear their head. Whey not stem these problems immediately instead of waiting for someone else to service your builder. You get paid to take care of this builder so do your job and take care of him.
When in sales I was ALWAYS the number one sales rep with highest volume. When receiving awards at year end functions my sales manager always noted that I did something no one else did that year - I MADE DELIVERY OF EVERY SALE I MADE. I could have sluffed off making deliveries but I told my builders I was working for them. That I would take care of them. I recall selling a builder and telling him my story of being there for his deliveries. When I showed up at his first delivery he asked what I was doing there. I reminded him of my sales visit when I told him I would be there; and, I was there for every delivery he had and he turned out to be my largest volume builder.
Being a good sales rep can help to overcome many of the problems you list. Note that I said - OVERCOME. I did not say SOLVE. Solving has to come from owners/ex. management. However, a good sales pro can help to maintain communications lines, keep their builders happy and get repeat orders.

Anonymous said...

Jere b?