Tuesday, September 20, 2011


Since 2007 there have been a lot of modular home factories and modular home builders that have gone out of business.  Some of these businesses were running on borrowed time anyway and the housing recession just hurried up the inevitable.  Others were absorbed by stronger competitors while a few were bought outright by large investment companies.

The factories and builders that are still remaining in an upright position still have to weather more storms but for most of them there is some sunshine in the future.  A few builders and factories will actually be in great shape because they appear to be doing some things today that will help them when housing recovers.

But no matter how well you think you are prepared for it, the future has a way of becoming the present and if you commit any or all of these mistakes, you can still find yourself at the bottom looking up.

Faced with a shrinking housing market, customers who can't get mortgages and competitors cutting prices in spite of higher costs, many builders and factories are losing business.  You need to ask yourself two very important questions.  "What are my current marketing efforts?"  "What should we have done in the past to get ready for this?"

Is it too late to start changing?  No, but you have to know the mistakes that got you in this position in the first place.

Here are the 5 mistakes that can kill your business.

1.  No Marketing Plan.
Every company must have a Marketing Plan.  It provides the framework and guidance for today and tomorrow.  It has to be flexible and realistic.  You must set goals for your business.  They have to be hard and well thought out.  Don't just say that we need more sales.  Set some goals and decide how you are going to reach the.  Make Everyone Responsible for its success.

You need to identify the major problems keeping you from reaching your goals.  Then look for opportunities that can offset those problems. Create a strategy and define your tactics for accomplishing it.  In other words, without a marketing plan for guidance, you will forever just wander around aimlessly.

2.  No understanding of your market position. 
Your company has a market position based on your current attributes.  Are they the correct ones, that is the question.  Is the niche you carved out years ago still effective today?  Do you have a clear and precise understanding of who your competitors are and how they are doing business?  

3.  No understanding of your customer's motivations. 
Knowing your customer is vital to your marketing and sales success.  You may not be able to afford extensive marketing research but simple questionnaires and low-cost focus groups can deliver a lot of the data you'll need to build effective marketing, sales and advertising tactics.

4.  No Sales Forecast.
Planning for your business begins with a sales forecast.  For the modular factory, building a forecast for a involves an in-depth analysis of the builder's business, the builder's relationship with your factory and the builder's marketing plan for the next year.

The only person who should do the sales forecast is the salesperson who is closest to the builder.  Each sales rep must forecast for their builders with a fill-in-the-blanks, paint-by-numbers approach.  There are no excuses accepted for not completing their forecasts.

Then let the chips fall where they may.  Since it was the sales rep's own forecast, then they will be held accountable for it.  One word of caution.  If the rep makes their forecast small expecting that you will be impressed with their bigger results, you have to nip this in the bud.  Under promising and over delivering is not tolerated in a sales forecast.

5.  No Sales System.
Sales management is the key to success.  I did not say the Sales Manager is the key to success.  Effective selling is the result of a complete system.  The Sales Manager is the prime facilitator!  Effective sales reps are "self-managed professionals." They know that every phone call, road trip and emails must be organized beforehand.  Records must be kept.

Effective selling is based on working the company's Marketing Plan and making it relevant to every builder.  Every phone call and visit must further the plan.  Self-Managed Professional sales reps have a 30 day plan and work the plan every day.

Professional factory sales reps know their builders, their factory's product line, financing options for the builder's customers and their factory's marketing plan.

Eliminating these mistakes will allow the factory to solidify its position in the market and move forward regardless of the economy.  Modular home factories do not have large market shares.  Therefore, if your factory can eliminate most or all of these mistakes, you will keep moving forward because most of your competitors will continue to make them.  A  little here and a little there and soon you will be gobbling up market share.

1 comment:

John said...

Marketing is the key to sales and profits but it will be years before the old guys that run modular home companies realize it. They don't want to spend any money on trivial things like marketing and research.