Sunday, July 14, 2013

Who Speaks for Residential Modular Housing?

Modular housing is stuck in neutral. Many people agree that modular housing is the best way to build; whether it’s a new home, a development, FEMA (not HUD) disaster housing, mancamps, hotels, apartment housing and multi-family but nobody is taking this message to the general public.

After all the turmoil of the past few years, modular construction in the residential, light commercial is still only 3-4% of the total unit construction even though housing is bouncing back. Local planning and zoning commissions are so uninformed about modular housing that even the mention of it brings to mind single and double wide trailers on steel frames. Moving up the ladder to county and state regulatory agencies only broadens the prospects that modular will be placed under increasing scrutiny making it difficult and sometimes impossible for a factory or the local builder to meet all the codes and requirements that seem to be aimed at deterring modular construction.

The general public has more faith in a 25 year old framer driving a old pickup truck that has magnetic signs on the doors stating that he/she is a "New Home Builder" than they do for the modular home builder that works out of his or her office/showroom. The problem is the modular home industry’s lack of marketing to new home buyers.

Cavco, Clayton, Champion are not helping clear up the problem of people equating modular homes with HUD homes. All these companies build both and many show them on the same dealer street lots. I remember one HUD street dealer that started carrying “Hudular” products from the same factory that was supplying him trailers putting up a flashing neon sign that read “We now sell modular homes.”

So who is responsible for not informing the general public about modular homes? Apparently no one is.

Every modular home factory has a website that gives a good explanation of what they build along with the floorplans they offer. But is that enough? No! Very few of these factories have a marketing plan of their own and there is absolutely no nationwide modular industry marketing plan. A Facebook page is not a marketing plan.

Modular home builders design websites that tell the visitor about modular construction but most of the sites are almost apologizing for using modular by explaining why it is superior to site built housing. Builders need to make their site less about modular and more about what the builder can do for the new home builder. Again, a few years back I walked into a modular home builder’s office/showroom and saw 3 digital picture frames, one on each wall of the waiting room, showing continuous photos of finished homes, kitchens, bathrooms, etc. There was not a single picture of a modular being set or manufactured. I was watching the photos so intently that the owner had to come over and tap my shoulder to get my attention.

This is not to say that modular home builder shouldn’t tell their potential home buyers that they build with modular construction. It only reinforces that since there is no national marketing to support these builders they must compete with the site builders on a level playing field before they explain that the home the buyer fell in love with is modular. Builders need to stop being the first line of marketing for modular housing.

So who does speak for modular housing? Besides yours truly, not many. I’m highlighting three organizations that say they speak for the modular housing industry. You decide if what they are saying is actually helping the residential modular housing industry. Are they marketing our industry to new home buyers and could any of them actually begin to be our standard-bearer?

The first paragraph on their website states their goals.
The Building Systems Councils (BSC) is the leading resource for the concrete, log, modular and panelized home building industries. Whether you are a manufacturer, builder, vendor, or consumer, the BSC is here to serve your needs. Target a specific council, or explore general systems-built home information. The BSC aims to educate and inspire through consumer-friendly documents and interactive learning tools.
They are holding Showcase 24 this Oct on Washington, DC with the purpose of awarding fellow members for the work they do for our industry and for excellence in building. The highlight is the Jerry Rouleau Award for Excellence.

What is missing from their website is any kind of marketing for residential modular homes. The NAHB website is jam packed with features of site built homes as is their Facebook page but little or nothing about modular is promoted.  This is the old dog that probably will never learn a new trick when it comes to modular home marketing.

I give this a ranking of 2 out of 10 on the Modcoach “Excellence in Marketing” scale.

Their goals are also on the first page of their website.
The Modular Building Systems Association is the only national organization dedicated exclusively to serving the modular housing industry. In an effort to improve construction productivity and efficiency, the MBSA promotes the advantages of modular construction to builders, government agencies and the general public. MBSA also advocates at the state and federal level to ensure a fair and competitive playing field for the industry.
Tom Hardiman and his crew of dedicated associates are trying to resurrect one of the oldest names in our industry. Are they there yet? No. Are they laying the foundation for the future? Yes. The people at the MBSA know their way around all aspects of marketing and I’m looking for good things from them. 

They are advocates for our industry and are planning lots of things to benefit both the modular factory and the modular home builder. 

I give this a ranking of 3 out of 10 on the Modcoach “Excellence in Marketing” scale.

Their website really doesn’t state what they are doing to help the modular home builder attract customers to our industry. Rather, their focus seems to be a blog and some featured articles mostly about manufactured housing along with builder resources.

The builder resource section is very good and if you're a builder please take a few minutes and search through it if you haven’t already. Their “codes corner” is helpful but comes up short on details. There is a section for “local jurisdiction adoptions” but there is no way to tell when any of them were last updated. There is a link to the now defunct Modular Housing Training Institute and another that lists all their members by state where you will mostly find double wide factories.

And they offer next to nothing in the way of marketing modular homes to prospective new home buyers.

I give this a ranking of 1 out of 10 on the Modcoach “Excellence in Marketing” scale.

As you look through the Internet searching for anything modular, only one company keeps coming up…..Blu Homes. Are you comfortable with them being the most recognized site of the entire residential modular home industry?

Where do we go from here? I wish I had some quick and clever answers but I don't. If you have any suggestions on what we can do to begin a marketing program to help show new home buyers the benefits of modular housing, send them over.


Anonymous said...

Good article Modcoach. I've visited all the websites mentioned and they all suck at marketing to new home buyers.

I'm a builder and I read you every day.

Anonymous said...

Coach, you've hit the proverbial nail on the head. Unfortunately, it's 30 years and counting with the same shortcoming. The industry needs a "single" or at least unified voice in this effort. Modular or systems-built (which is it?!!) manufacturers only need look in the mirror to see the problem. Sure, the industry is fragmented with the factories fighting over the same three to four percent of single family housing market. But until these factories AND THEIR OWNERS are willing to make significant financial contributions toward the marketing effort, nothing will change. Modular builders should also bear some of the burden, recognizing that challenge because many of them also participate in the site-built world.

Randy said...

A good article Gary. The comment just above is also on the mark about a unified voice. Not one trade organization here and one there and one as a subsidiary of another and so on. We need to have fewer conventions where vendors show their wares and more seminars for GCs, architects and developers. Use actual real life examples of what has been constructed using offsite construction. Also if you are waiting for the factory to do the PR you will be waiting a long time. Most are run by production/engineer types. I suggest the first thing we do is to stop using the phrase "stick built" to describe site building. That is a real pet peeve. on and off site are both IRC stick built. Thanks Coach. I would really like to see this thread get legs from those who read it. this is critical to the future of the business

Anonymous said...

Well I've been saying it for years, they won't work together, because of high ego's. They are too busy claiming each other is going out of business and we are better than they are or we build a better product than the rest. (Truth be told most of them are not all that and a bag of chips.) If they do get together and there is a cost to be paid, 1/2 never cowboy up and pay their share. Stop being children and start a nation wide campaign to inform the public what we do on the manufacturer's dime, not the builder's dime.
Don't tell me it's not in the budget as many owners and CEO's have plane's helicopter's high market vehicles and so on. Put some of that in a TV and radio advertising campaign.

Anonymous said...

Actually I believe we have two very important shortcomings in our industry that will greatly affect the continued lack of market share.

The first shortcoming, is the one you mentioned in this article. The is no unified voice for our industry that promotes off site construction as a preferred form of construction to consumers.

The second shortcoming, is the lack of new blood coming into our industry. I have been around this industry all of my life. Working on both sides of the fence. The one common thing I hear from modular factories is the lack of real modular builders out there. In a lot of markets there are hudular dealers, but not real modular builders. The modular builders that do exist are getting older and soon will hang it up with no one in the wings to carry on.

Modular factories also seem to have a hard time finding new blood. So many of the people in this industry have moved from company to company of the years. Not that they are bad people, but what happens when they are gone? Who is going to take their place?

To grow our market share as an industry, we need to expand are marketing efforts to include consumers, workers, entrepreneurs, business owners and so on!

Anonymous said...

Factories have the most to gain by increasing share of the single family housing market that is built off site (i.e. modular). With many builders handling both types of construction, it will be a challenge to engage a unified voice among builders. Manufacturers will have to step up to the plate. Imagine if Coca-Cola relied on distributors to advertise and market its products! While perhaps not an entirely fair comparison, the example points us in the right direction.

While this blog and its contributors take numerous stabs at Blu Homes, the company certainly has been able to sell its ivestors on the long term viability of its concept and business model. What will it take for the "other modular crowd" to do the same?

Randy said...

I will tell you what it will take to get the "other modular crowd" to do the same as Blu.
Many millions of dollars!!!
So there you have it. One group wants the factories to do all the PR and the other group wants the distributors to do all the PR. The dysfunction continues. This is why we need one major trade group to speak for the industry which is the theme of this blog. I can say without reservation that if you wait for the factory to do will wait a very long time. A truss company does not do all the PR for a builder...a sheetrock company doesn't do the PR for the builder....why does the factory? Do you think a builder will want a surcharge placed on his orders for PR purposes that will be generic and not designated for him? As it stands all a factory hears is make it cheaper!!

Anonymous said...

I would be interested to hear Randy's vision of the "trade group" that will be the voice of all things modular. How will the trade group raise the millions and millions of dollars needed to educate homebuyers on the benefits of offsite construction?

Anonymous said...

Gary, YOu always do a great job in bringing to light issues that affect our industry. And you always ( least most times get commnets to your articles that further point out thoes issues. I think that Randy's and the Anonymous's comments, in some csaes make all the sense in the world for the industry, but may not have to be the only way to get a positive face on the industry.
Firt having been around the industry for a while, I can tell you that our failiure to promote the industry as a whole is the single greatest drawback we have. I know that many factory owners and operators belive that individual promotion is the only way fro them to go. Why promote what my competiotn does? How does promoting my industry benefit my compnay if my company name is not appearing in an article covering the industry? What if the other guy gets that one house that I didn't? I spend plenty of money on advertising, why should I use any part of that for a comprehensive promotion campaign thelling hte world about what it is "we" do? I admit that type pf thinking does exist and I belive it will continue to be as it is as long as we, as an industry, cannot get in one room and agree to disagree. And disagree about many issues, but at the end of the day, do whats best for "our" industry.

I on hte other hand do not belive that the industry needs or should have one voice on the issue of promoting what it is we do. Tom at the MBSA has developed many great contactsover the years that he usees and continues to use to get positive articles put into press on our industry. I for one can tell you that these positive articels come in very handy when selling the Modular industry to the site builder. I also belive that the BSC of the NAHB has developed their own set of contacts that they cultivate and use as the opportunity arrises. Both organizations have suffered over the past five years with falling membership and paticipation, which affecvts thie ability to get things done, with member support and participation.

I, for one do not think we have to satrt out with millions of dollars to get something going. I belive that we all have stories that need to be told and will protray the industry in a positive light to prospective builders and home buyers. Just visit some of the manufacturers web pages and the stories are all there. A good way of gatherign them and using them in the best media possible is what we need. I do agree with Anonymous in that we should set up an advertising budget for he industry to participate in, but we need to start with more simple goals like" column inches " of articles written aboutus and have everyone seee the benefits of co-promotion so that they buy in. And yes, let's keep in mind that not all of them will "buy in" when the time comes. But not everyone joins every trade organization that is available to them.

I have waited a long time for the industry to start to promote "The Industry" And before anyone goes after that statement, I have expressed this opinion to everyone that would bother to listen to me.