Wednesday, July 23, 2014

Modular Home Factory Sales Manager Worried About Growth

A couple of days ago I talked with a modular home factory sales manager about the owner coming into his office a week earlier wanting to expand the territory they served adding about another 100 miles to the north and west.

The sales manager called me because the owner assumes that entering these markets would be a big boost to sales and the bottom line and wants to see $2.5 M in sales by July 1, 2015. He is worried that not only will it not happen but that he might just be fired if it doesn't. He asked for my help.

What a loaded situation!  After talking for almost two hours I would like to share the results of this first of what will probably be many more.

I started out by asking if he has any modular or site builders in the new areas that want to buy their homes. NO.

Have you hired any sales reps for either territory? NO.

Have you done any research into the number of new home currently being built and how many are modular? YES to the number of new homes, NO to the % of modular homes. I told him to multiply the total new homes by 3%, multiply that number by the average FOB price of their homes and assuming that they get every one of those homes, does it equal $2.5M or greater? NO.

Now he has the first piece of information to take back to the owner. More pieces followed.

Then I asked if he had any candidates for the two new territories? NO. He hadn't even placed an ad for new sales reps. He was hoping to steal a couple of reps from other factories.

I asked if he did that, does he know how much the owner willing to pay? NO. The other sales reps have all been with him for a couple of years or more and work mostly on a small salary plus a commission.

We all know that that there are two types of sales reps; one that can bring his builders with him to the new factory and one that has no builders. Assuming that he will not be able to steal a sales rep, does he have the time to train and meet with the new sales reps on at least a weekly basis for the first six months? NO. He has no formal training program and riding with each new rep for one day a week for six months will hinder his relationship with his other reps.

This is more information that he needs to taken back to the owner.

Great sales managers think of sales as a simple game of managing their reps' numbers. For example, I asked if he knew that in the modular home industry that 100 builder leads typically yields 20 meetings, which will convert to 8 visiting the factory, which will result in 4 sales and that this will take at least 6 months? NO

Instead of hounding their reps for a sale, the best sales managers focus on the status of the sales funnel, making sure their sales reps have the right number of leads and meetings, which they know—if they just work the system—will result in the right number of sales. With that in mind, are there enough independent site and modular builders to keep a sales funnel full through the next 12 months? NO, Maybe, "I don’t know!"

That last piece of information is critical when talking with the owner.

Now he has some ammunition when he sits down with the owner and discusses these new territories.

I just got a call and was asked if I could meet with him and the owner. YES 


Anonymous said...

Refer to the last post- Why Don't Modular Home Builders Use Business Plans - Need I say more.

Anonymous said...

Seriously - this was a Sales Manager and he didn't know these questions to ask himself or the owner - Tragic.

Even better the owner looking at this greener grass didn't ask the sales manager to find the answer to these questions before and others like styles being sold, price points for homes, and transport costs.