Sunday, April 14, 2013

Typical Modular Home Builder Trying to Adapt to Changing World

Most modular home factory owners and management have been around this industry for decades. A lot of the big names in modular once were lowly sales reps and today they own or manage some of the biggest factories in the country.

When they were sales reps, times were better. A million house starts a year was typical and 3% of that was modular or HUDular, about 30,000 +/-. Then the unspeakable happened in 2008, the market corrected itself plunging home sales into the crapper. Prices of used homes dropped leaving new home buyers with an option they hadn't seen for years....really cheap alternatives to new home construction.

Many builders left the business or went out of business and factories were struggling just to keep the production lines open. Owners and senior management stayed on remained virtually unchanged. They tried to force sales where there were none just like in the old days.

Fast forward to today. Some of the builders that had left are coming back. What they have found is a radically different market. In 2008, they used the Yellow Pages, billboards, newspaper ads and quite a few had model homes. Today those builders have found that they have aged faster than than just those five years.

Entering today's market, they found they have to understand the new home buyer as well as how to market to them. At first they turned to the factory they had used to help them with leads and quickly discovered that those once dependable factory leads have all but dried up. They ran head first into the Internet with its Facebooks, Twitters, Pineterests, SEO coaches, website this and Internet that. On top of that, hundreds of new building codes, regulations, fees and permitting problems have emerged to hinder their road back to recovery.

Typical modular home builder reentering the market

Most of these small business owners built 3-5 homes a year prior to 2008 and now they are wondering how to get started again. Turning to their factories for help has proven nonproductive in many cases. Those owners and senior managers simply haven't kept up with all the new marketing avenues open to them and have continued to look at the industry as a place to peddle their wares instead of stepping up and educating the returning new home builder on what is happening today. Builders have now decided that they know as much as the factory people and are looking at the factory as a commodity supplier, not as a business partner.

Some modular home builders are doing a brisk business with some of them closing 30 or more sales this year but the vast majority will struggle to build more than three, if even that many.

There is hope on the horizon for these builders. I am developing a series of articles on marketing and sales for the changing world builders are facing. 

The MBSA is reentering the fray and new life is being breathed into it which will give every one of it's builders and their clients a resource to help build a new home in this over-regulated and Internet world.

Bottom Line: Keep reading Modular Home Builder blog and learn what you can do to help you market your business and sell more modular homes!


George Morgan said...

lowly sales rep ???? 25+ years doing this and I am a lowly sales rep... I prefer to think of myself as a Professional Factory representative. I take this job seriously and represent the factory to builders and represent builders to the factory. I am at my desk at 7 AM and my goal is to be current at days end...every day...I consider it almost sinful for a builder to wait for a quote or information requested. Who would ever believe a lowly sales rep would ever work that many hours ?

Coach said...

Thanks George, I was waiting for someone to say something about that. Sales reps are the key that turns the factory on every morning.

The factory sales rep is at the same time the most trusted person the builder knows at the factory and at the same time the most under appreciated person at the factory.

Congrats to surviving 25 years as a sales rep in the modular business.

Anonymous said...

Coach, weren't you a lowly sales rep at one time? If I remember correctly, you were also a slightly rounded.
We still love ya.

Anonymous said...

Would you recommend using Facebook advertising?