Monday, June 3, 2013

3 Reasons Modular Home Product Launches Fail

We have all seen modular home factories introduce a line of homes, promote it and before long, the homes seem to be just another dud for the factory.  If a factory has added an option for a better widget but no one is buying it, whose fault is that? Is it the builder’s fault; their customer’s fault or is the fault inherent with the factory?

Let’s look at why a modular home factory would introduce a new line of homes or a new widget. Designing a new line of homes doesn’t just start with someone in management saying that a new home is needed. No, it starts as a seed of an idea usually generated from one of the factory’s builders. One of their prospective new home buyers came to them with a house that didn’t fit anything currently built by the factory. Then another builder asked for a similar home and the seed germinates. A CAD person is tasked with designing something that fits the need and others look at it and say that maybe a new line of homes might be the way to go.

In the case of the widget, it’s usually a supplier bringing a new product to the factory’s attention that gets it added to the lineup. Nobody really gets excited about a new faucet or vinyl flooring but the factory really wants everyone excited if the widget is a new insulation system that they’ve just invested $20,000 for the machinery to install it.

So what goes wrong between the conception and abandonment? There are three important parties for a new product launch and they all have to be in sync for it to work properly. Here is the triad needed to do that; the sales rep, the customer and the builder. If any one of them is missing from the launch, get prepared to shuffle it back to the dud closet.

Sales Reps don’t care about your new stuff.

After the factory has the idea for a new line of homes or a new widget, one of the last people to know about it is the sales rep. They’re usually not aware anything new is being added until the weekly sales meeting where they get the new brochures and pricing.

In general, people don’t like change. That is especially true of sales reps and if they can’t see an immediate benefit for themselves, they will file the brochures in their desk drawers along with the pricing. No good can come from telling their builders about a new widget.

But suppose a couple of sales reps think it is a good idea and want to run with it, there is little or no training supplied by the Sales Manager other than handing them the brochure and saying “here’s something new to offer your builders.” No spiffs or gifts are offered to get them excited about selling these new homes or widgets so they take the path of least resistance and just continue doing what they’ve always done…sell what they know.

For a new product line to have any success, the sales staff has to be brought in early and kept in the loop. They have to feel they have an investment in its success. Training is required. If a new line of "Near Net Zero” homes is being developed, the Sales Manager and everyone working on the project must develop training and marketing programs to launch it. Get the sales reps on board early and with an incentive to offer the new product line and success has a much better chance. Then when something else is added to your product line, you will have a map to follow to insure a successful launch.

Potential New Home Buyers never hear about it.

Now that you’ve developed your new product line or added a new and improved widget, you have to get the word out, not to the builders but to the people that will actually be purchasing new homes….the new home buyer.

For a factory to get the word out about something new used to be like putting a gallon of water in a thimble. Only a little actually gets captured. Today however, the factory has a variety of ways to launch new product lines. 

Have you ever heard of “Social Media?” Yes, Facebook, YouTube, Pinterest, Google +, Instagram and many other sites are followed almost religiously be the end consumer and none of these cost a single dime to be on. Signature Homes, Nationwide Homes and Homeway Homes are on them quite a bit and their sales numbers are showing the success of their social interaction.

Your factory should have a blog linked directly from your social media efforts. How will any prospective new home buyer learn more about what’s happening at your factory if you don’t have one? You can expand the details of that new line of homes or the new widget that is costing you money just setting there gathering dust. 

If you don’t have a blog for your factory and I know that a blog takes a lot of time, then at least get published in someone’s blog like Modular Home Builder or MBI’s blog. Don’t kid yourself, if you don’t get the word out to the public about what you’re doing, nobody else will because it’s not their responsibility, it’s yours.

Customers buy based on wants and needs. If the don’t know what new products you have to offer, how will they ever know if they want or need it in their new home.

Builders don’t see the benefits

Now we arrive at the forgotten part of the triad, the builder. You’ve got your sales reps fired up with a marketing program, training and maybe a spiff program; the customer is excited to learn more about that new insulation or “Near Net Zero” home you introduced but now your builder has become the bump in the road.

Have you presented anything to the builder other than the brochure and pricing? Did your sales rep offer to spend one on one time going over the new product line? Did you share your media marketing program with the builder? The answer to all these questions is a resounding NO!

So why should the builder will be anxious to see the new products? They just have to learn something new and if it includes a pricing increase over the standard product, how are they going to present it. Unless a builder was the one to actually bring the germ of an idea to the factory, most builders will simple find a way to deflect a customer’s inquiry about it and continue to sell homes in the usual way. They follow the path of least resistance.

When should a factory get the builder base involved? The answer to that depends. If you have a strong and loyal builder base, bring them on board after the decision to add the product or home has been made but before preparing the marketing plan. Get a few builders together in person or by conference call and let them contribute to its success. This way the builder is part of the launch. If you have enough confidence in the new item, give the builders an incentive to upgrade their new home buyers.

If you have a builder base acquired by offering the lowest price, you might not want to get them involved early in the process as they will tell the other factories they buy from and maybe one of them will jump on the idea quicker and at a lower price point. Being a lowball price factory means that your builders have little loyalty and even that stops when you they find a factory with an even lower price.

You now have a way to successfully launch a new product line. The sales department is on board, the end consumer is aware of it and the builder wants to offer it. What more could you want?


Anonymous said...

There you go playing favorites again Coach - mentioning Signature Homes, Nationwide Homes and Homeway Homes, but not Excel Homes, Ritz-Craft Homes, Blu Homes, Westchester, etc. - all modular manufacturers active on social media and some with blogs as well.

Sometimes it seems like you write to satisfy your advertisers instead of being an objective news source.

Coach said...

I spend hours writing an article about how a factory can improve their success of launching a new product and mention 3 factories as examples, one of which does not have an ad on my site and the only thing you comment about is that I didn't mention EVERY factory that has a page on Facebook.

Builder Bob said...

This is one of your most informative articles and really think you got to the heart of why some factories fail to get a positive reaction to new products.
Then I read the comments. You were right saying that that jerk overlooked the entire story and focused only on something that really had nothing to do with the topic.
Keep up the good work Gary

Jimmy said...

This is such a truism in our industry. I can't think of one factory that has put this system into practice and I've worked for more than a dozen of them.
I agree with Builder Bob. Keep up the good work.

Anonymous said...

It is true, perhaps salesman do not want to sell the CRM programs or web sites or design centers, build a better home that is not trailer based and you will sell more product. Include the salesman in the field with a better built product not information on how to sell a so so product because most mgt. teams are old fashioned and it shows big time today.