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Pay Attention to the Details to Improve Sales
By Charles C. Shinn, Jr., Ph.D., Builder Partnerships
During the years of the severe housing recession, home sales plummeted by more than 80%. Builders fought for sales by increasing their sales and marketing budgets, discounting sales prices, giving away upgrades, customizing homes, increasing sales commissions and doing whatever else it took to close a sale. These were expensive reactions to generate sales but often it was the little things-the details-that killed a sale.
As we have emerged from the downturn, builders seem still to be clinging to some of those measures to generate sales, and Emma and I have been amazed to see many inexpensive things that are simple to correct causing losses in builders' sales capture rates. Builders still aren't paying attention to the details. Keep your models sparkling. Once, I told a builder he would sell more homes if he closed the models, and he actually closed them after I walked him through the models. The entry was littered with trash and cobwebs; the entry light was broken; and the door knob actually came off in my hand. Rusty, metal hangers filled the entry closet, the models were dirty, and kids' fingerprints were everywhere.
In another builder's model, the stairway overlooked the kitchen, and the top of the kitchen cabinets were littered with construction trash including an old soda can. We've often spot burned-out lights or dead landscaping as well as settled and cracked entry stairs, walks, and driveways.
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Recognized Excellence: Atlantic Builders Earns Awards for Quality
By Paul Deffenbaugh, Builder Partnerships
That doesn't happen by accident, of course. Builders who get that kind of universal approval achieve it by establishing a culture of continuous improvement processes that lead to excellence. We talked with Gene Brown, Vice President of Production & Quality Assurance at Atlantic Builders about how the company, which serves the move-up market, worked to implement its processes and achieve its successes. Builder Partnerships: What kind of processes did you implement that helped your company earn these achievements? Gene Brown: We don't have a concerted effort to win awards, but we do have a concerted effort to improve our relationships with customers, employees and trade partners, which results in a better organization.
It begins with our culture that focuses on having delighted customers. I don't see how you can accomplish this without happy and engaged employees and trade partners. Atlantic Builders is made up of 20 great people. The homes we build are done by a diverse group of thousands of people. Trades and employees need to be happy, valued and respected so the customer will be. We've developed and borrowed many processes over the years that help support our core values and purpose. Here are some I believe are fundamental.
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Plug the Leaks: Manage Your Variances
By Ed Hauck, Builder Partnerships
We work with a lot of builders who understand that they're losing money in some areas of their production, but they aren't quite certain where and how much. And because of that they have no idea what to do about it. The answer to identifying your trouble areas is variance purchase orders (VPOs) or variance reports.
Variances are any cost that is either over budget or under budget. Of course, the over budget items are the more important ones, but it's also a good idea to know where you're under budget. The total of these two are your budget variance. A variance isn't a change order, but strictly related to quantity, costs or work that is not included in a scope of work. I take a three-pronged approach to managing variances. - Review variances early and often
- Review them with your team to identify and plan to eradicate
- Track and sort them by different cost codes
Review Early and Often. I like to start on a weekly basis and get the team together. That includes anyone associated with purchasing and estimating the budget as well as the production team. We take each item in detail and look at the cause of the variance. Why was this item over budget? We seek out and discuss ways to eradicate the variance. Is the estimate accurate or did we not use material properly. Are we not scheduling correctly? Have material costs increased?
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For Manufacturers
Selling to Builders Should be a Long-Term Strategy
By Stephen Crouch, Builder Partnerships
One of the best aspects of the improving housing market is manufacturer's focus on establishing direct relationships with builders. Sales teams are being expanded and reorganized, and manufacturers are placing a greater emphasis on taking ownership of communicating their message to builders. The return on the investment will be greatest for those manufacturers who make a long-term commitment to the strategy. This month's article highlights four best practices and benefits of making the builder a priority for the long-term.
Be Strategic and Segment. There are an estimated 40,000 builders in the United States. It is easy for manufacturers to be overwhelmed by the fragmentation of the builder market. The temptation can be to hire one sales person and focus only on the large national builders, since they drive volume, or to hire a large team to focus on every builder. Both approaches can be equally bad, since the first approach may generate sales but no margin, and the latter approach lacks focus, which generally leads to a large expense and a very poor ROI.
The best practice for long-term success is to make the builder market more manageable by segmenting builders.
- Do your homework and understand the characteristics of the builders who will be most interested in your company and your products
- Identify builders that match those characteristics and focus your effort on establishing a relationship and selling to those builders
- Establish an initial builder sales team that matches the size of the opportunity presented by the target segment.
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STYROFOAM Brand Insulation Provides Homeowners with Long-Term Comfort, Durability and Energy Efficiency
STYROFOAM™ Rigid Foam Insulation brings more consistent comfort and greater energy efficiency. By installing STYROFOAM™ Brand Insulation continuously around the exterior of your home, you can reduce air leakage 3X more than with housewrap over wood sheathing. This is just another way that Dow is helping builders and contractors build homes that stay cooler in the summer and warmer in the winter and are built to last.
Features and Benefits of STYROFOAM™ Brand Insulation|
|  | | A thermal picture shows how STYROFOAM insulation prevents air infiltration | |
- Achieves significant R-value, which measures the effectiveness of your insulation, to ensure that your home is comfortable in any season. - R-3.0 for ½ inch - R-5 for 1 inch
- A home built to code is only meeting the bare minimum required by law. Adding a continuous blanket of STYROFOAM™ Brand Insulation around the outside of your home can help you exceed the bare minimum and improve the comfort, durability and efficiency of your home.
- May help homeowners qualify for federal or state energy tax credits
STYROFOAM™ Brand Insulation, when used continuously around the exterior of the home, allows for 2x4 framing versus 2x6 framing with housewrap. The result is a thinner wall (and more liveable space) that helps prevent air leakage and the development of mold and decay.
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Window and Door Survey
By Monica Wheaton, Builder Partnerships
Builder Partnerships surveyed its members recently about window and door products. We received 92 responses that represent 6,600 total units annually. On average, the builders delivered 72 homes.
The results speak to the types of windows these builders use and address some of their decision process about selecting windows, including which suppliers. From the comments, we learned that the most common reason a builder converts to a new window or door supplier is that something has gone wrong in the relationship. When that happens, builders look to a variety of characteristics of a supplier or product to establish a new relationship, which includes lower price, better quality and improved service.
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DEADLINE FOR SUBMISSIONS
April 10
Contact Marla Blackard if you have questions
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Whizard Summit-Building Material Sales and Marketing
April 6-7, 2016
Boulder, Colo.
Mark Mitchell, Whizard Strategies, hosts his annual two-day seminar on building materials sales and marketing. This is the only event designed to help you stay current with the knowledge and strategies you need to sell today's demanding builder, architect. contractor, dealer, distributor or big box. The way you reach these people and the messages you need to use are changing. This is only part of what you will learn at the Whizard Summit.
For more information, click here
Face-to-Face Networking Event
(By Invitation Only)
April 22, 2016
Denver
A quick and efficient program that puts builders and product manufacturers together one-on-one.
For more information, contact Stephen Crouch at stephen@builderpartnerships.com
Production Management
May 9 - 11, 2016 Denver
Streamline processes, increase efficiencies, and cut costs in your production department to significantly increase your profits.The Production Management seminar introduces effective ways to organize and operate a construction management department.
For more information, click here. How to Sell to Homebuilders
May 10-11, 2016 Denver There are many programs and experts that teach builders how to sell to homebuyers but no one teaches the building materials company how to sell to the builder, until now.
For more information, click here.
Webinars
9 Secrets to Maximizing and Managing Your Gross Profits
April 1, 2016
12:00pm ET
Do you use QuickBooks or Enterprise Solutions in your company, but haven't taken full advantage of its job-costing capabilities? If so, you're overlooking an incredibly powerful cost-control, income-enhancement, and company-wide management tool!
Join Diane Gilson, Info Plus Accounting, as she covers the top 9 ways you can use job-costing to increase your gross profits. You won't want to overlook this unique opportunity to learn how to make transformative and lasting changes in productivity, accountability, financial confidence, and the amount you get to keep as profit from each and every job.
For more information, click here. Why Customer Feedback Matter for Home Builders
April 15, 2016 12:00pm ET Whether you have 10 customers or 10,000, knowing how they feel about their experience with you and your team is the only way to maintain customer satisfaction and quality.
In this session, GuildQuality will present the importance of implementing 3rd party customer satisfaction surveys to get honest, actionable feedback on your company performance.
For more information, click here. Planning for Superior Profit
April 29, 2016 12:00pm ET
Don't let your costs eat your profits! You can account for increased materials costs, decreased home prices and STILL make money. In this session, Chuck Shinn presents the Profit Equation and Ed Hauck joins him to discuss proven ways to decrease construction costs, build homes that sell at current market prices AND add points to your bottom line.
For more information, click here.
Field Supervision and Cost Control
May 27, 2016
12:00pm ET
Have you taken all excess costs out of your processes? Are you making as much money as you possibly can from each home that you build? Guess again. Chuck Shinn and Ed Hauck explore different ways to improve performance in the field and squeeze significant savings out of your organization.
For more information, click here.
Key Management Reports to Guide You to Profitability
June 24, 2016
12:00pm ET
Join us for this excellent session where Emma Shinn discusses how your accounting system and its reporting function can be used to guide the growth process and help you ensure your company is not only growing in size but also in profits. If set up correctly, your system can provide you with an incredible tool for monitoring and reacting to decisions made and will offer a clear road map on the future direction for your company. By the end of this session, you will have a firm understanding of the 10 key ways to make accounting work for you and you will know which specific reports you should use to measure growth and profits.
For more information, click here.
Back Office Processes
July 22, 2016
12:00pm ET
Increase productivity, cut costs and add several points to your bottom line. Charles C. Shinn, Jr., PhD and Ed Hauck focus on tips and tricks you can use to streamline your back office processes.
For more information, click here.
For the Complete list of events, click here
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Builder Partnerships
Builder Partnerships is a member organization focused on providing management training and support to help builders improve their performance and profit. Currently we represents more than 700 builders in the United States and Canada who have projected about 85,000 homes built collectively this year.
With over 75 manufacturer and service providers associated with our group, Builder Partnerships also manages highly competitive rebate and incentive programs and works to strengthen relationships between builders, manufacturers and other service providers in the home building industry.
For more information, visit www.builderpartnerships.com
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