Tuesday, March 17, 2015

Modular Home Builders Answer Some Tough Questions

Recently I sent out a questionnaire to 50 modular home builders that have been in business for more than 5 years asking them to comment on our industry and their factories.

Surveys usually get about a 5% response but for this one I got more than a third of the builders sending back their questionnaires with some surprising answers.

Here are the questions I asked each of them. I summarized their answers as some builders really went into extreme detail.

For the first question, think back to your first modular home. What two things about going modular caused you the most problems?
Most of the builders said that the factory was so excited to get a new builder that a lot of essential details were excluded like the cost of the set crews, the amount of work needed at the jobsite to complete the home and even down to not telling them about trying to get a module onto a tough lot.  They also said that it was never explained just how much work has to be done both at the factory and at the jobsite before the actual home gets to the production line.

The biggest problem for them was the lack of communication between the factory and the builder on the first house. One builder said that they were treated like prey that had just got caught in the factory’s trap and couldn’t get any answers to even the simplest questions. Their only contact was through their sales rep.

Again, going back to the beginning, what did your factory give you in the way of help in building that first modular home?
Some of these builders have been using modular construction for over 20 years and they all said the same thing.

“The amount of steps from initial drawing through house delivery is tedious and time consuming process.  It is made much more complicated than it needs to be.  There wasn’t any training, follow up, or advice from the factory or the sales staff.”

One builder said that they gave ‘free’ drawings as an incentive and another factory promised them a dedicated territory and promptly reneged on it.

Several builders said that if it wouldn’t have been for their sales rep giving them a lot of help during their first home, they probably would have gone back to site building.

Was there any formal training given you by anyone at the factory?
This question prompted the most negative comments. The answers ranged from absolutely nothing to some saying that the factory people actually the question altogether.

One builder with hundreds of site built homes under his belt said that he got no instructions or any skill training whatsoever from the factory for the first house.

One builder commented “Whichever factory gets this done properly and efficiently will be the most successful company in this field by far.”

Looking back at your first modular houses, did you make a profit?
They all said they made money from their first modular home. Some even made more than they had expected.

The response to this question caught me a little off guard at first but then after thinking about it for a bit, I should have expected their positive comments.

The failure rate of site builders going modular is high and has been acknowledged by every factory owner I’ve talked with. The difference here is these builders made a profit on their very first house and have been building modular ever since.

I didn’t send out any questionnaires to builders that tried modular and lost money on their first home because they probably never bought another one. No training, few successful ‘new to modular’ builders staying with modular construction. Any questions?

Don’t name your factory but what two things don’t you like about your present factory?
The BIG 3 answers were Quality, Updated Pricing and Service.

Quality was all over the board. More good than bad but some houses should never have left the factory. The factory ships a poor quality home and then expects the builder to make it right at the jobsite.

Having to ask your rep for a price for every house even if it is one the builder had recently ordered and wanted to duplicate it as one builder told me, required another full quote and Oh No!, a new higher price with new engineering fees and freight cost.

Most builders said that service departments are improving but they still have to track down reimbursements and fight for what they are owed. Too many service departments want to outsource their service work to the builder and then argue about what the builder says is a fair cost for repairs.

Don’t name your sales rep, but is he/she working with/for you or are they just working for a paycheck?
This particular question produced a consistent answer…Their rep is great and works with me.

Are there any skills you wish your sales rep had that could help you either market or sell your homes?
This question produced a ‘deer caught in headlights’ response. Most didn’t answer this question and the ones that did stated that maybe they could help the builder with social media stuff.

One builder said that even though their sales rep is great and has been with them for years he wishes the rep actually knew more about the construction process after the house is ordered and shipped.

Today, does your factory offer any help marketing or selling your homes?
Here is another question that got a unanimous response. They all said their factory offered absolutely no marketing or selling help outside of providing some nice plan books (maybe) and treating their home buyers nicely when they tour the factory.

A couple of builders said that when they asked their sales rep for help in promoting their homes, they were told that the factory doesn’t do anything, all they want to do is ‘push’ homes out of the factory.

Some builders said they get leads from their factory but almost all of them are useless and neither their sales rep nor anyone from the factory follows up to see if the they actually contacted the lead.

What are two things your factory gets right?
The builders were quick to sing the praises of their factory, and I think, the modular industry as a whole.

Every builder that was sent a questionnaire has been with their factory for years and each feel like part of the team. Loyalty was the #1 thing mentioned.

But there was an answer that I didn’t expect. These builders really like the engineering departments at their factories. Each one had high praises for everyone involved in drawing and producing plans for custom homes. The only downside was that even though the plans drawn by engineering clearly indicate a specific item to be completed on the plans sent to the production line, a lot of times those instructions are overlooked resulting in an unhappy home buyer. Not the engineering department’s fault.

Given a choice, would you like to have a new sales rep?
The answer to this was a resounding “No.”

Tell me about the factory service department?
Most builders like their service department. OK, so what is with their answer to what they don’t like about their factory?

I think this is one of those “Love/Hate” relationships that every builder has with their factory service.

The only problem many builders have with the service department is getting a timely response to either a problem while the builder is standing at the job site or not answering emails or voice mail till days later.

If skill, marketing and sales training were available, would you participate?
The universal answer to this was “I would be the first to sign up.”

Again, you have to put this into context. Every one of these builders is very experienced building modular with some of them featured on this blog showcasing their spectacularly beautiful homes and they still would jump at the chance for training.

Hey factory owners! Are you seeing any opportunities here?


George Morgan said...

Having to ask your rep for a price for every house even if it is one the builder had recently ordered and wanted to duplicate it as one builder told me, required another full quote and Oh No!, a new higher price with new engineering fees and freight cost.

As a factory rep, I would like to address this paragraph...Taxes. freight and general price increases heaped on the factory demand that we requote each house...sometimes just changing the county affects the tax rate...and destination always affects the quote. We always have to look at code requirements. The wind requirements are driving all sales rep crazy...each and every address has to be checked for correct wind rates which affects the quote.. The same builders who complain that they cannot do a accurate quote without sales help are the very guys who demand that the quote be 100% correct...

Anonymous said...

The friction between service dept. and builder for builder's backcharges is a fact. I think if this survey was taken by sales rep we would see that an equal amount of the rep's time, probably more is spent on service related issues. That is counter productive to a rep's sales time in the field.

Unknown said...

The industry needs better plant operations. Other than mobile home people.