Thursday, October 15, 2015

Builder Comment Sums Up Some of the Modular Housing Industry's Biggest Problems

In response to the recent article Modular Housing Industry Needs to Get Off Its’ Butt Now, a modular home builder wrote the following comment, signed his name and his company.

Before the slow down I did nothing but modulars, when the bottom fell out of the market I found other work and from time to time sold a mod mostly from references from old clients. This week I took delivery of a simple ranch that came with a preframed porch. We found that porch stuffed in the living room along with the gable ends, collar, ties, sheetrock, and all the siding. It took 7 of us an hour and half to pull this mess out of the LR and cost me 1-1/2 hours of extra crane time--Strike one, The fit and finish of the framing is terrible, overhangs are crooked, rim joist go every which way, on one box the bridging goes from 2x10's to 2x8's to 2x6's ??? I guess they ran out of 10's ?? Strike two. I called the sales rep. and got ba, ba, ba STRIKE THREE !!! no more mods for me it's not worth the trouble. And you wonder why sales are dropping ---I don't!

It really doesn’t matter which factory he bought the home from, what is important is that this is not an isolated case. We’ve all been in this industry long enough to have many war stories about factories doing things like this and as well as builders doing some really dumb things that they blame on their factory.

Another builder wrote me yesterday about the service tech a factory just sent to a house that had issues with the windows when the house arrived. When the tech arrived he was met by the owner, as they were living in it by now, and he told her that the windows his factory sold were cheap and he was surprised anyone would buy a modular home. When the homeowner told the builder what was said by the service tech he immediately sent of an email off to the factory owner and GM and as of last evening he still hadn’t gotten a satisfactory reply from the factory. Maybe it is being resolved right now.

Now that a factory has possibly lost a builder, what can be done to fix the problem.

Here's a step-by-step plan.

1. Get Out of Denial

You probably think you know why your customer left–but you probably think wrong. Most people believe the primary reason a builder left is that the customer found a lower price elsewhere or the builder's needs changed.  But if you ask builders why they switched factories, the reason is usually either "bad customer service" or "poor quality."

The lesson here: Do not assume you know what actually happened.

2. Discover the Real Reason

I don't want to point out the obvious, but: If you don't ask, you're not going to find out.  In other words, the owner or GM must absolutely speak directly with the builder who gave your firm the heave-ho.
Approach them respectfully and with a sincere desire to learn and improve.  In some cases, you'll get an earful right off the bat, but in other cases, you'll need to probe to get the honest answers.

Either way, you've need the straight scoop in order to use the situation to your advantage.

3. Fix the Real Problems

If the problem is anything except the "the builder's needs changed"–which, it turns out, is the reason only 14 percent of the time–then you need to address the issue that the builder raised.  If your quality or your customer service sucks, make the changes necessary to improve them. If your price isn't competitive, either drop the price or figure out a better way to articulate why your higher price is justified.

Fixing the problem, by the way, is the best way to keep a defection of one builder from becoming an exodus of multiple builders.

4. Keep the Relationship Alive

While you're fixing the problems, keep your former builder in the loop.  That doesn't mean pestering him/her with junk emails, but it does mean informing them about the progress of the changes and improvements that you're making.

Any communications along these lines must make it clear that the builder's opinions and complaints are not just being acted upon but are sincerely appreciated.  And if the changes help you win new builders, be sure to thank the former builder.

5. Revisit the Lost Customer

When you're completely sure that you've addressed the issue, it's entirely appropriate to ask the former builder to revisit the decision.  It's far easier to get a former builder to return to the fold than it is to acquire new ones.

And that make sense, if you think about it.  When you exhibit an honest effort to improve, most people are willing to give you a second chance.


Anonymous said...

"Coach, Saying your going back to stick building because of your experience with a bad factory is like saying you're going back to handwriting everything because the t's stick on your keyboard.

Why go back to inefficient handwriting? You can get way more done faster by typing. The answer is to get a new keyboard and keep typing. "

George said...

Most of these builders do not want to pay for an extra ship loose carrier (could run $2,000 plus depending on destination). Maybe its the builder's own fault for not asking about the location of his ship loose componants. Its not always the factory. A little education or questions asked by the builder before delivary could take away a lot of the surprises.

Anonymous said...

With transportation a component of pricing it may not be as simple as find a new factory and keep on building. The issue is why need a new keyboard! As for getting things done faster it may be true for the on site portion of a project but with pricing requests taking 2 weeks or more, production schedules out to 10+ weeks, and factory callbacks the target builder for modular homes begins to say why bother particularly when costs plus profit are the same as building on site where the builder has to fix and defend his mistakes not those of a supposed Quality controlled production line.

Coach's illustrative point is factories need to deliver on the promise and premise underlying the use of modular construction for SFR

Anonymous said...

The other side of the problem could have been that when the factory realized that the amount of parts that had to be shipped in that house was just too much,they only had two choices. The first was to send a parts carrier to handle all of the ship loose. I cant think of one factory that really likes to make that call. Further I cant think of more than a handful of builders that would accept an extra carrier as their responsibility. Then their obvious second choice is to freight the parts carrier at the factory's cost. So you have a GM that is profit orientated towards the bottom line saying, " Just ship the parts in the house, how much work could it be? The set crew will take the parts out of he house and set them on the house anyway" What needs to happen is that the GM needs to get on the phone and explain the situation and then compensate the builder for his time and crane costs, which will still be substantially less than a parts carrier being shipped to the site. Or have the service manager or sales manager make the call in the absence of the GM's willingness to make the call and do the same. I agree with the prior posting , why let your guy go back to handwriting when, you can put the computer keyboard in your builders hands again.

Anonymous said...

Almost amusing where the comments address Strike 1 but ignore Strikes 2 and 3 that called the factory out with this builder. Also, maybe just maybe this builder, like many said give me your best and lowest price, and got what he asked for with the ship loose loaded in the home versus an extra carrier.

Even more tragic is the second story where a factory Tech not only makes the builder look bad but undercuts the crediabilty of the industry

Unknown said...

The problem and solution starts with the factory. When you have a significant amount of ship loose, say from an addition such as a porch, don't assume the builder knows how you ship these items. The factory rep needs to discuss shipping with the builder. We all know how to spell "ASSUME". An experienced modular builder would have asked about ship loose, but it's still the factories responsibility as ship loose of additions is somewhat unique to the floor plan and extent of the addition. A factory that is concerned with their quality would be on the site within 24 hours to see first hand what was delivered and work out satisfactory resolution. As a factory owner or manager I would expect the rep to bring this to my attention immediately so that we could dispatch a responsible party to the site.
As to the second scenario, if I were a builder who received poor quality, such as the fit and finish of the framing, I would be on the phone with the factory seeking immediate resolution. Email is not efficient communication when it comes to complex issues, especially when time is of the essence. Use the email to follow-up and document the call. Obviously, the factory owner and GM need to get their act together. They have at least one bad service tech and their own response has failed. Failure to train, monitor and follow-up on service visits will destroy their business.

Anonymous said...

It's the same old thing.

Manufacturer vs. Dealer. Framer vs. Electrician. Builder vs. Architect. Or One Builder vs. Another Builder. . . . . .everyone thinks everyone else is a moron.

In the rest of the world (where offsite building is the norm, not the exception) they don't use Manufacturer to Dealer to Owner system. Or as I call it, the Finger Pointing System. The "manufacturer" IS the Building Company. Either as a direct to Owner full soup to nuts building company. Or selling building components direct to the Owner.

In my opinion, Manufacturers should BUY their good builders. Put them on their payroll. Control the entire process. Let the realtor / dealers (the ones that cause 99% of the public perception problems) go back to selling real estate. Or used cars.

Anonymous said...

I just had a conversation about this very issue yesterday. A student studying modular and panelized construction in the US can't understand why we're actually losing market share while the rest of the world is moving whole-heartedly towards modular and panelized construction. Modular companies in the US are serving the lowest cost buyer. That's it. When there's pressure to hit a $50 per foot, you don't have budget to throw at another carrier or to kick back to the builder for his extra 1.5 hours of labor. In short, you get what you pay for. I work for a factory whose average sale price is 130 per foot. We can do higher quality work and have a better product because our customers are willing to pay for it. You can't expect a rock bottom price and beat up the factory for cutting corners. You get what you pay for. The industry will provide what customers demand. If they demand low cost, they'll get it. If they demand higher quality and are willing to pay for it, they'll get it. Let's pull this industry out of the gutter and work towards a higher quality product, but the builders and customers need to pay for it.

Anonymous said...

As a former Factory Rep now working for one of the largest stick builders in the Country, I can share a little perspective. The successful stick framers are acting with great customer service, not just lip service, as 95% of the mod factories do, you can run but you cant hide. There are no crane costs, shipping costs, permits, repairs, engineering fees, print fees, and service reimbursements (heartburn for everyone). And when there is a quality/service/parts questions the factories are aggressive in trying to make it the builder's fault SO THEY DONT HAVE TO PAY $ and deal with it. The service managers dont answer the phone, and they have an encylclopedia of excuses. Builders told me on the trail this was industry wide. The mod factories need to figure out a way to shrink their costs and give pro-active customer service and then you can compete. The BABABA from the rep is all he can do bc the management gives him the run around too! Another suggestion is to bite the bullet and send a set crew to SERVICE, yes FULL SERVICE with a SMILE, and set, UNLOAD, and fix the home right at a reduced cost built in. Modular can be a great product, but it has been/ is being sold like a used car by Vinnie Choo Choo.

Anonymous said...

I could not agree more with the pay for what you get approach. I agree any modular builder knows what is coming when it comes to ship loose and if you understand the logistics of the carriers you will ask these questions ahead of time. At the same time it is also the factory responsibility to educate the builder on how this is going to come. Building modular is not easy and that to me is always the biggest misconception. You have to know what to take from the factory and know what you want to build local. Porch roofs are a perfect example and I am sure what this builder experienced is what most of us builders experience onsite. The porch roofs never fit and work. I have built well over 100 custom modulars and I can honestly say the roofs for porches never work. We know this so we stick build them after the set. Is it a little extra work, yes, but you know it will be done right. The problem with this industry is not always the fight between builder and factory, but the skill levels each has and knowing what they are good at. The problem with this industry is not so one sided to the factory, but just as much a bunch of makeshift "builders" who are not builders. It is a way for remodelers to all of a sudden be single family builders, electricians to all of a sudden be general contractors, attorneys who are now developers. The factories need to start selling their products to qualified builders and I would beat 90% of modular problems would go away.