Thursday, July 25, 2013

5 Changes Effecting Modular Home Builders

The modular home building business has been turned upside since the housing crisis hit in 2008. Many builders, both large and small, folded up their tents and quit. Many others went bankrupt and those that managed to stay in business through the tough years are finding a changed world.

Here are 5 things that modular home builders need to adapt to if they are going to weather the good times now heading your way.

1. Small builders vs large public builders.
The large public builders like Ryan, Toll Brothers, etc, are becoming even more aggressive than they were prior to 2008. During the recession years they hoarded cash like the crazy lady down the street hoarded cats and are bringing it out by the bucket loads now. Gen Y and Gen X buyers are being wooed to new age appropriate developments and Boomers are seeing more age restricted developments than ever before.

Small modular home builders can win some battles by doing things the large tract builders can’t.  Go after the scattered lot crowd, emphasis your custom design capabilities, use referrals effectively and become ninja-like in your marketing approach.

2.  Have you heard about social media marketing?
You can bet the big guns in housing have. Everywhere you look ads for Ryan Homes show up. It is not unusual for them to get over a million impressions a day!  Some of the big tract builders have marketing departments that work Facebook, Twitter, Pinterest and others full time. OMG! Even Blu Homes is using part of their $65M investor money to work social media.

You have got to take more than a fleeting interest in social media. That’s where your prospective buyers are. Forget the Yellow Pages, the newspaper ads (Gen X and Y don’t read them anyway) and when was the last time you saw a new billboard being erected. Take some time and learn how to promote your company on social media. You need to make some impressions.

3.  Going Lean and Green
Energy Star, Passive House, LEED, Net Zero, building envelopes, IAQ are just some of the terms being used by today’s savvy new home buyer. They expect a tight house, low energy bills and earth saving materials in their new home. They eschew large two story open spaces. Local, state and national building codes are getting tougher and it’s taking longer to get design approvals and inspections. You need to be aware that your buyer is probably as well informed as you about the new energy stuff on the market. It’s your responsibility to rein in their dreams of saving the planet when they build with you. Neither of you can afford it.

4.  Don’t forget your customers after they move in.
Not keeping in touch with your customers when they call about the light switch not working, a loud noise coming from the toilet or a garage door opener that stopped working will send your customer right to Facebook, Yelp or Ripped Off.  If they can’t get you to return their emails or calls, they will usually call your factory and complain. Trust me, you don’t need that hassle. Factories do not like being brought into problems that are the builder’s problem and not theirs. Where do you think referrals come from?

5. Choose your battles when it comes to pricing.
If your idea of winning over customers is to assume that price is the only thing they care about, then you need to get out of the new home business and start selling used cars. Using the least expensive materials and bare minimums from the factory will mean that just about everything the customer wants will cost them an arm and a leg.

Consider offering your homes with a standard energy saving package included in your base price. It might include better insulation, better windows and foundation insulation. Offer upgrade packages for kitchens, baths, flooring, heating and maybe even fireplaces. These packages would include a selection of options that many of your buyers have chosen in the past. Easy to do, hard for other builders to figure out what you’re doing.

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