Thursday, February 21, 2013

Modular Home Factories Retread Sales Reps

Modular home builders who were fortunate enough to have weathered the depressed housing market over the past 5 years are now awakening to the prospect that 2013 just might be the year that brings profit back to their business.

Something else the last 5 years has brought to them is a myriad of factory sales reps trying to get their business. On the face of it, that should be expected as factory after factory needed more homes to build and having their reps call on established modular home builders was the quickest way. The biggest problem here is that the sales reps that call on the builders might have been working for factory 'A' last month and factory 'B' this month. Retreading factory sales reps is the path of least resistance for Sales Managers looking to increase business but in the end it only confuses the builder.

But only if you've worked as a modular home sales rep for another factory
What was and is still mostly overlooked by both the factory and the sales reps are the thousands of site builders that have built up a resistance against changing over to modular. The retreaded sales rep was expected to bring their builders with them when they jumped from one ship to another, adding the builders that their predecessor, who also jumped ships, left behind. He or she were never brought on to look for new business.

Now all this brings me to an email I received this week from an experienced sales rep in a related industry that has been desperately trying to become a modular home sales rep. I'll call him Sam.

Sam emailed me about two years ago and asked about becoming a modular sales rep. He was employed as a sales rep with a log home factory and wanted to use his sales skills of finding and bringing on log home builders into the factory fold. I gave him my speech about modular being the next big thing in housing and encouraged him to send out his resumes to as many modular home factories as he could.

This week I received another email confirming what I have known for years. The modular business doesn't want new blood in sales, it just wants retreads that have no ambition or incentive to go after site builders.
Sam wrote, "Since that time, I have talked with many modular general managers and sales managers, and been to quite a few interviews.  The feedback and the results have always been the same - they tell me I was a very strong candidate, but in the end they decided to give the job to someone who had been a rep for another factory and could bring builder/dealers with them.  
I can understand this approach, but it fails to address the issues you frequently raise about the modular industry simply recycling the same talent from factory to factory, and also ignores the fact that new blood in the industry might be more motivated to go out and nurture builders who were new to modular construction."
The bottom line to this is that modular home factory owners want results after all those years of scrapping along and push the sales manager to bring in sales "right now" and the best way to do that is stealing other factory's reps and hopefully their builders will follow and buy. 

There is no recruiting and training programs for either "new to modular" sales reps or builders in any factory I know of; no sales manager that has the time to do it or the proper skills and no factory owner that has the money just lying around to start such a program. The results of all this will become evident when the retreads begin to retire and the housing industry starts to rebound and there will be no trained sales reps ready to bring in site builders, just going after the same dwindling group of established modular home builders.

4 comments:

Anonymous said...

Coach, I agree that this is a problem in our industry. When I was a Sales Manager for a modular home factory, I actually preferred bringing in fresh blood to our sales team that I could train to work the way we wanted them to versus bringing in factory retreads that brought too much bad baggage with them. If a modular factory really wants to go after site builders, then they should bring people into there organization that have worked in the site built world. They will understand what those site builders are looking for that will get them to give modular a try!

Anonymous said...

Coach.

I have always thought, and I still think, that you are missing it. Modular builders do not buy houses. Owners buy houses. Why spend the time and effort to "sell" to builders? Factories should be selling to Owners. A couple of the "old school" factories are already moving this direction. All of the "new school" factories (Method, Blu) are already there.

For this industry to move forward, it needs to stop acting like sales guys, and start acting like builders.

Coach said...

Anonymous 10:39,
Modular factories are "Marketing" to prospective home buyers on Facebook, Pinterest, Tweeter and through blogging. Sales reps "Sell" the to the builder. Leads generated by the factory are usually given to authorized builders to follow up.

Please don't use Blu Homes as an example of how to sell to the end consumer because their advertising money will evaporate long before they can sell enough homes to be profitable. There are not that many buyers that want folding houses, a building style that went out of fashion almost 50 years ago.

Anonymous said...

Coach.

I'm asking you to consider another model. Where the manufacturer is the builder. Total turnkey.

We have a very successful business (we're a manufacturer) offering full turnkey packages to owners. Our reach isn't as far as some of the other manufacturers, but we have a much larger percentage of our local market then 3%.

We're a professional building company. Customers recognize that. We present a lot less risk to the owner (and their bank) then a smaller builder might. We compete every day against the old model (manufacturer to builder to owner), and get consistent feedback that our model just feels better.

Maybe to get better then 3% nationally, we all need to get better then 3% in our own markets?