Even if you’ve only been a modular home factory sales rep
for one day, you’ve heard that most new home builders that sign up with a
factory to build their homes only buy one house and then are never heard from
again.
The amount of money that a factory expends getting a “new to
modular” builder to visit the factory and order a house is enormous. Assuming a
mid size factory has 6 sales reps and each brings 4 “new to modular” builders
to the factory every year, that is 24 builders. If 75% give the factory rep a
home to quote, only half of those will actually stay with it long enough to buy
a home. That’s only 9 builders.
Of those 9 new
builders only one third will buy more than one house. That’s only 3
builders. Now let’s see how many houses that is. 9 builders building their
first house, 2 builders buying two houses and one builder buying 3 houses. That’s
a grand total of 16 homes for the factory or approximately 54 floors or
modules. A grand total of 1 ¼ houses added per month. Next year the circus
starts over again.
The question you have to ask is “what happened to the 21
builders that bought only one or no houses from you?” There is no definitive
research on where or why they left but from my experience working for some of
the largest modular factories in the East and talking with my contemporaries,
most of these builders simply dried up and went away never to be heard from
again.
That is not the whole story however. For the most part they
simply didn’t understand what they were getting into and decided not pursue
modular construction in lieu of what they knew; site building. Changing “new to
modular” home builders into returning modular builders for your factory may be
easier than you think.
Here are some things you can change right now to help
increase your dedicated builder base.
Stop being Self-centered. Getting a builder to visit your
factory is what you want and you probably do a great job of explaining who you
are and why your factory is awesome but your builders only care about how you
can benefit them. Figure out their pain and you will be the factory that gets
their attention. Every factory can put on a great dog and pony show but very
few have empathy for what the builder is going through.
No Nurturing Program. Some “new to modular” builders,
actually most of them, are interested in your homes but do not have a current
home buyer with a plan and are unable to buy right now. You could offer them a
25% discount and they wouldn’t be able to take advantage of it. If the sales
manager pushes the rep to call the builder and ask for a house when none is
needed, the builder will go away, never to be heard from again. What is needed
is a Nurturing Program that gives them a way to keep in touch with the factory
and slowly learn what you have to offer and how you can help them. This is the
first thing that every sales manager should work on establishing for their
factory.
No Continuing Education. Imagine yourself in the builder’s
shoes. You wake up with no prospective customers in the pipe line and unsure
how to get any. You have a website but traffic is slow or even dead. The phone doesn’t
ring anymore and you are running out of work after this house. Where do you
turn? Maybe you turn to remodeling or window replacement. Today you have to be
on-line to win “friends” and get noticed. You visited that modular home factory
and the sales rep said he wanted to help but they only want a house from you.
They really don’t have any way to help.
This is where the factory should step in and be proactive. Become
part of your builder’s business. Offer in-factory courses in lead generation,
financing for both their customers and for them, marketing and sales help,
advertising, social media, working with subcontractors and state and local
inspectors and other topics.
This doesn’t require a full time department. It takes a real
sales manager that can organize on-line and in-factory classes, maybe webinars
and possibly annual or semi-annual conferences for builders. People like to
part of a winning team and your factory can be just such a winner.
If my Builder Breakfasts have only taught me anything, it’s
that builders love to share successes and frustrations about the modular home
business. If your factory would bring experienced builders together with the
new modular builders in a factory setting, you would see builders working
together to help your factory succeed because you are listening and helping
them succeed. It’s Golden Rule time.
NOTE: I’ve had many factory owners and sales managers tell
me that they would love to do these things but money is tight and builders show
little loyalty anymore. Only the biggest builders stay with a factory because
they have built a relationship with the sales and management team and also have
too many houses in the pipe line to jump ship. Encouraging new builders through
a Nurturing Program and Continuing Education will quickly build a loyal
following of builders that will become big builders.
Coming into winter would be the perfect time for owners and
management to sit down and come up with a plan to implement both of these
programs. It’s not like you’ll be swamped in January and February.
