Today's Home Builder Key Word: Customization

Take a look at Builderonline's October 2015 article, Your Biggest Competition isn't Other Builders, discussing new-home builder's sales advantages when compared with existing home sales.  The author, Myers Barnes, highlights 7 key selling advantages.

The second key advantage is customization and it offers a very powerful message:  who wouldn't want input on design and product selections?  The article suggests reminding home shoppers that a new home will reflect their personal style -- not someone else's taste.

And, a reminder: the millennial demographic -- only starting to purchase homes -- is very keen on customization and personal style!

Take advantage of technology to stay current on selections

Some of you might be thinking, "Oh, customization; tried that.  Definitely added time to our schedule and very tough to keep track of all the selections, changes, re-selections. Not sure they're even profitable."

But...customization is a key selling advantage for new homes.  How can a builder's current process be better managed to effectively offer something that home shoppers really like?

Previous Blogs mentioned the need for simplification (isn't that the opposite of customization?) and process analysis.  Scott Sedum's 25 Essential Scheduling Practices article in ProBuilder offers several steps to consider:

(1) Provide only the number of options customers will pay for and can be kept 100% current - revisit annually.  Do you know how many times each option is selected ?  If every sale has a particular option, wouldn't it improve operations to make it a standard feature?

Ask accounting to provide an "options ordered" list and review with sales.  It's a great selling advantage to have an extensive list; take the time to analyze that all your costs are included and the scope isn't so extensive to unduly burden the team refreshing the list at the beginning of each year.

(2) Coordinate cut-off dates with sales for option selections and changes -- and help manage everyone's expectations. Sedum mentions, "It takes skilled salespeople, a focused management team and a company-wide commitment to maintain this discipline." Not maintaining such an approach impacts schedules and costs and can create negatives in homebuyer perceptions, as well.  No one wants to hear the neighbor was able to add the granite countertop after cutoff when they couldn't!

We'll suggest a third:

(3) Take advantage of technology so your team knows when options are added or deleted -- and can easily browse all appropriate documentation including drawings.  CPS' FieldCollaborate offers scheduling software tools as well as provides field managers anywhere/anytime data access necessary to keep up with options activity.  They're able to see, in real time, what has been ordered on Lot 12 -- and when.  It's possible to view drawings, as well, so your field managers can review accuracy both before and after construction.  All from their smartphone and tablet!

Customization is a powerful selling advantage; make sure that your operations are nimble enough to manage the necessary processes.

Home Builder Scheduling: More on the "Small Ball" Approach

There's quite a lot going on in the new home market these days: momentum is positive, more homes are being built and sold.  Low interest rates are still to be found,  household formation is growing, millennials finally seem interested in home ownership and...there are ongoing labor shortages in certain, key industries and markets making the construction part of the business ever challenging.

There's also growing interest in maximizing the concept of job scheduling in the effort to "bring order from chaos" in new home construction.

There's no doubt about it: new home construction is unlike many other production processes. However, Scott Sedum, in a ProBuilder article suggests there is one inviolate rule: The best builders are the best schedulers. Every builder recognizes that, as Fletcher Groves notes in Practice Makes Process:  "the reason an enterprise exists is to make money and... that value is delivered through the work that the enterprise performs and the work has to be performed in some manner of workflow."

Getting Down to the Basics

There can be a tendency to say (or mutter): "I already schedule -- and haven't really noticed much difference in the chaos!"

That's where "starting at the beginning" will pay off.  The art of scheduling needs to be much more than creating a list of tasks to be done today. Taking the time to review, analyze and enhance organizational processes will pay off -- as that review process will highlight areas needing attention leading to better scheduling.

And, as much as it might hurt, it pays off to start at the beginning. Remember KISS?  Regardless of whether you're building single-or multifamily homes, production or custom, in Alaska or the desert -- make an effort, as Sedum suggests, to reduce extra steps, paperwork, trips, calls.  That's what, Groves points out, allows you to complete more work, at a lower cost, with fewer resources. End result: increased efficiency resulting in better margins.

OK; where to start?  Remember our mentioning taking a SF Giants "small ball" approach? Details matter; we'll suggest 3 detail points that will help improve your scheduling process:

• Make simplification a daily objective -- throughout the organization. Finding out where you can simplify things (whether paperwork, approvals, or phone calls) is the first step in increasing efficiency -- and should be a part of schedule review process.
• Create a complete "start to finish" checklist -- nothing is more painful (for the organization and the pocketbook) than discovering a grading mistake when the slab is about to be poured. This list should be your start document -- and will generate one or more tasks in the schedule. 
• Absolutely include "BUYER" items in the schedule --  Touchpoints are today's mantra. And, they don't  start or finish in the sales office. The pre-construction meeting, walk through and home orientation are not only critical to your relationship -- they take time.  Make sure to include them in your schedule -- both because they're tasks and to highlight their importance.

Groves mentions process review needs to be much more than documenting today's workflow -- it is the front end of an improvement methodology.  We'll look at more key points in upcoming Blogs!

Scheduling: An anchor point for today's home builder

Are you building homes with paper & pencil, fax machine and a mobile phone to call your subcontractors and let them know when to show up?

If that's the case, you're probably wasting not only time but money.  And, not doing your vendors or home buyers any favors.  They're late, you're late... everything can feel as if it is in a state of chaos.

Let's talk about a pivot in homebuilding processes

Today's home building environment isn't that of 10 years ago.  Back in the day, many suggest that production (or, operations) was, as Scott Sedum mentions in ProBuilder, an afterthought when compared to finance, sales and land development. Now, Sedum suggests, homebuilders need to be great builders of product.

Clark Ellis uses a baseball analogy in a recent Builderonline article suggesting we're seeing a switch from "long ball" to the SF Giants style "small ball" playing with a focus on operational details.

Sedum suggests visiting Dr. W. Edwards Deming's carefully crafted statement, "Uncontrolled variation is the enemy of quality." to which he suggests adding "and profit."

Of course, some might argue variation is at the very heart of new home construction.  There are different size lots, different elevations, options, upgrades... the variations seem endless.

How is it possible to manage all of this variability and deliver the desired result -- a well-constructed home, on time, within budget? How to manage all these variables in addition to weather, labor shortages, mistakes and rework?

The key, suggested by Sedum and many others, is schedule.  A good schedule means that you've adequately addressed critical issues so that your schedule becomes the anchor in your operations. Getting to the endpoint of a "good" schedule suggests that the builder has addressed what Fletcher Groves identifies, in Builderonline, as process mapping and workflow.

We're going to be talking about many of these "critical issues" in the hopes of addressing how to develop and maximize the effective use of a construction schedule.  Stay tuned!

Fall Homebuyers: Yes; they're out there!

Agents might think the home buying season is over once the calendar turns into October.  It's getting darker sooner -- and cooler, there's all sorts of school and sports programs underway and home shopper traffic might seem few and far between.

And, buyers could mistakenly assume if they buy in the Fall they won't see much progress on their home before cold, rain and snow potentially slow construction progress -- and waiting until prime buying season in the Spring could seem reasonable.

Get visual in your storytelling! Make interest rates & process more relevant.

But, says Builderonline in a recent article, "Fall and Winter are a great time to start working with a builder."  After all, much of today's new home sales are "built to order" requiring the "upfront planning and legwork that goes into a new construction home," according to Brian Brunhofer of Meritus Homes.

What can an agent do today to bring today's home shopper to a purchase decision?

Tell your story effectively: Interest rates are bumping around all time lows today.  It is fair to think they aren't going to get any lower. And, today's buyer is that much closer to reaping green benefits!  Use your touchscreen system to calculate payments, illustrate green benefits -- and remember women and millennials two "green leaning" demographics!

Explain your process: While some buyers are interested in a "quick delivery" home, most will be a part of the standard process including approvals, permits, structural option decisions, design center selections.  Let them know your 8-point process or 15 steps to home purchase -- build their confidence in your organization and how the process will create a positive result.  If you can do this visually, all the better as women appreciate creative story-telling.

Get into Process 2.0: Brunhofer suggests that builders are just starting to finalize 2016 vendor bids and many will adjust their home prices reflecting increased costs.  Once buyers understand the time frame involved and the process, suggesting a purchase today is consistent with your story. Show them your construction schedule; introduce them to a Buyer Portal with schedule updates as well as stage of construction photos.

Work Your Co-op Program: Many areas see co-op agents bring in most of their traffic; do you have an established co-op program?  Such a program helps bring in traffic -- and it also helps with co-op sales.  Offer to put your home shopper in touch with one of your co-op program participants; help them understand Spring selling time frames and let them coordinate what is needed for a summer move-in.

Remember: there are all sorts of touch points associated with the buying process.  Information gathering is critical for many of today's buyers -- especially millennials.  Visual presentations and storytelling are key for women shoppers.  Take advantage of the slower traffic season to strengthen the tools necessary in today's market!

Millennial Homebuyers Say: Show Me Some Flexibility!

There's no doubt about it: millennials (those born between 1982 and 2000) are a key home buying demographic.

Trying to wrap your arms around this 82 million-strong group isn't easy.  As Sarah Unger, VP of insights and strategic planning at Ketchum Global Research and Communications notes, "This demographic is very diverse, which makes it very hard to pin down on any one type of housing style."

One concept, however, emerges from a variety of market research studies according to a recent Builderonline article: the desire for flexible spaces and adaptable floor plans.

Show Millennial Homeuyers the Flex Options!

Most builders offer a number of structural option choices in their floor plans -- effectively providing buyers with customization options.

Unger notes, "71% of buyers surveyed say it's important for their home to have the ability to be personalized and they're willing to pay for it."  

And, Unger goes on to say, buyers are willing to "spend up to 22% of their home-buying budget on cusomization options suited to their needs."

How do you communicate what's possible -- and communicate effectively to your millennial home shoppers?

The Blog has highlighted previously the need to offer different types of shopping experiences for different buyer profiles.  Millennials shop online, they shop experientially and they seek alternative information-gathering processes.  What better way to indicate your flexible and adaptable floor plans than an interactive presentation via kiosk or iPad?

Adding Furniture to the Homeshopping Experience!

And, while you're at it, why not include CPS' SalesTouch Move-it/Move-it feature allowing them to add their furniture into their newly created floorplan?

Now, you've provided the millennial home shopper with an easy-to-use shopping experience highlighting your adaptable floorplans and letting them visualize how their new home works!

Does the Term "Digital Transformation" Make You Anxious?

There's a recent McKinsey & Company article by Karel Dorner and Jurgen Meffert highlighting the key questions surrounding the concept of digital transformation. You can take a look at Nine questions to help you get your digitial transformation right on the McKinsey Insights & Publications page.

The article suggests there are few organizational stressers greater than digital transformation. Why? There are so many possibilities -- on so many levels.  Digital is ubiquitous.  Digital impacts core businesses (think about connected cars), opens new frontiers (e-health, anyone?) and suggests the need for fundamental change (do you have the type of staff needed?).

Comment Board -- proactively reaching out to the consumer

The authors suggest, when putting together a digitial transformation plan, it is helpful to consider  the customer journey as a way to initiate your planning. The Blog has reviewed this concept (take a look here) which can be summarized as the sum of an individual's interactions with a company's brand at all levels previously. 

Unpacking your customer's experience not only will help you map the journey --  it highlights how digital can make each customer/brand touch point more effective.

Take another look at the Whole Foods Customer Comment Board image to the right. We can all agree it is a transformation of the old style comment board with bits of pieces of paper stuck to it.

 In addition, doesn't it positively change the business touch point with the consumer interested in making a comment?

With its dynamic and visual design, the Board proactively solicits feedback -- and, at the same time, transforms the notion of a comment board providing valuable information with calendars, video and weekly specials.  Wouldn't you leave the Board with an enhanced experience?  That's the journey behind digital transformation!

Organizational Celebrations -- Scaling the Gong!

Just received an email from Williams-Sonoma ("the source for gourmet foods and professional quality cookware) celebrating founder Chuck Williams' 100th birthday.

"That's nice," I thought and then, "that's really cool they're sharing their corporate celebration with everyone!"

Celebrating! Whole Foods Comment Board Anniversary! 

Celebrating corporate events seems a somewhat grey area.  When organizations are small, every sale is celebrated, every birthday gets a cake.  Gongs clang, there are all sorts of special clapping ceremonies and congratulatory emails flow throughout the organization.

Then, time goes on, the organization grows -- multiple offices, different shifts, people start working remotely. Celebrating diminishes as size, logistics and all sorts of other things seem to get in the way.

But, we need a way to scale the gong! Because celebrating isn't just for the moment; it is a motivator, a team builder, a way to share in the success of others -- ultimately, driving individual and team performance and satisfaction.

Given the importance of celebrating sales wins -- and other events -- you have to ask, "How am I going to be able to keep on top of this?" There are all sorts of answers; we'll mention just one: CPS CRM emails key contacts whenever there's a home sale or closing.  Automatically; you don't need to do anything other than celebrate!

And, while we're at it: CPS is celebrating!  30 years since we were founded in 1985.  And, we're recognizing Customer Comment Board and SalesTouch installations. Take a look: we've scaled the gong by sharing!