Tuesday, October 7, 2014

Your Factory Just Lost a Big Modular Home Builder, What Next?

Your modular home factory just lost a big and important builder.  You don't lose customers very often, and if you do, in most cases, you can rationalize why the client made the wrong decision to leave you. As humans we can rationalize just about every decision and rarely get it right.

You had a builder that consistently bought 20-30 homes a year for the past decade. They had built what seemed like a solid relationship with your sales rep. Quotes and orders were coming in as usual and houses were being delivered as usual. Then came the phone call from the sales rep that the builder was leaving your factory and going with someone else.  They told the rep that they have needs that must be met and over the past year those needs have not been met by your factory.

The die has been cast and no amount of begging, promises or discounts by the factory sales manager or owner has dissuaded the builder from leaving. The lose of a big builder is not a small thing to a modular home factory. In fact one builder can be up to a third of the factory’s sales.

Here are a few mistakes that most likely drove your builder away:

1. You chose not to invest in new solutions.
You continued to use procedures and production methods that worked well for you 10 years ago but haven’t kept pace with today’s new home buyer. You may have cut the budget or manpower in certain departments that look good on the P&L sheet but had adverse reactions at the builder level. While other factories were moving quickly into High Performance homes and offering new energy solutions, you chose to keep things the way you have been doing it for decades.

Showing outdated floor plans, not offering builders pricing software or marketing and business plan support that other factories are can be the kiss of death.

2. You didn't deliver on the promises you made.
Builders are generally not very patient and reasonable.  It comes with the business and the factory rep and management have grown up knowing it. But when you make a promise and don't deliver, you lose trust, and credibility.  It is unacceptable to let a deadline pass without proactive communication.  If you make a promise, deliver on it.  If you can't, communicate in advance, and you'll likely find a builder very willing to negotiate a new date.

3. You were arrogant enough to believe you were untouchable.
By most accounts, you are the best in the modular housing industry and have a stellar reputation.  You have a high builder retention rate.  Even still, if you let our guard down and lose trust, your builders will leave you.  There is a big difference between loyalty and satisfaction.  Loyal customers will forgive mistakes and stay with you—they won't shop.  Satisfied clients are open to alternatives, and when things go south and another option presents itself, the risk of a change is lower than the risk of staying with you.  Always look to build trust and loyalty.  

4. You didn't listen. 
In general, silence is not golden.  A quiet builder is an unengaged builder and should raise a red flag.  What's worse is a builder who is engaged, tells you exactly where you stand, and then you still don't deliver.  We should always listen, and always respond to our clients.

So how do you recover from losing a big builder?

1. Don't panic
If you don't have other prospects already lined up, you could find this situation rather frightening. You might want to jump at the first builder that comes along even though your gut says NO. You might think about drastically slashing your prices in order to quickly attract new business. Keep your head cool and think about what's best for your business. You don't want to find yourself a year from now slaving on low-paying projects that keep you too busy to find anything better. The skills that got you the builder you just lost will help you find others.

2. Analyze your mistakes
Without blaming yourself, think about whether there were things you might have done differently to keep the builder. Then ask yourself whether that is likely to apply to other builders as well. We can all stand to improve ourselves in one way or another. We may need to learn new skills, or work on our interpersonal communications.

Did you miss or ignore any warning signs that this was about to happen? It's always good to examine ourselves for the cause of our difficulties, but don't forget that sometimes circumstances have nothing to do with anything we did or could have done.

3. Visit your modular home builders.
Many sales managers do a ‘ride along’ with their sales reps. When they get to the builder’s office they often try to display their importance and authority. Sometimes they even throw the sales rep under the bus in front of the builder.

Instead of doing these awful things, try working on a plan of action with your sales rep before the visit and NOT on the drive to the builder, going over all aspects of the builder’s current business and what you can do to help both your rep and this builder. Take your time and do the homework necessary to build loyalty. Make the meeting with builder productive and not just a ‘Hi, who ya doing and now let’s go to lunch’ type of visit.

4. Find new builders.
Even though you may feel compelled to work extra hard for your remaining builders, you probably need to set aside some time to deliberately seek new business. If you try to make up your losses on your existing clients, you may create problems in those relationships. When looking for new work, keep a cool head. Desperation doesn't sell. Stick to your proven methods of finding work, or innovate thoughtfully -- but don't grasp at straws.

Losing a big builder can shake your company to the bone but it should not be the end of your business. If it is, you have made the classic mistake of putting all your eggs in one basket. If you haven’t lost a big builder yet, plan for the day when it will happen. Yes Virginia, there is a Grinch and he is just waiting to snatch your prize builder.

1 comment:

Anonymous said...

Coach, I have built 10 homes a year for the past two years and decided to leave my factory in PA and go to another. I simply just stopped buying homes from them and it took 3 months before someone (not my sales rep) called and asked if I had gone out of business. I am sending your article to them.