Builders: Using Software to Help Ease Margin Pressure

Are you a homebuilder focused on the entry-level and first-time home buyer market? That portion of the new home market is hot -- and the Millennial home shopper is more focused on purchasing than ever before!

Are you experiencing price increases on basic materials? How about difficulty in obtaining labor -- especially in critical trades? Labor shortages lead to price increases -- and these factors mean you're seeing margins being squeezed.

Now is a good time to focus on Operational Excellence

Recently, John McManus had a great article in BuilderOnline. McManus notes there's an opportunity today to motivate apartment dwellers to purchase homes. Home shoppers prefer new -- and apartment dwellers don't need to sell their current home so there are fewer strings attached to the purchase.

But, these buyers are at the first-time, entry level price point so price increases on the builder side indicate a need to be extra focused on what could be considered controllable costs to maintain margins. McManus notes builders are "doubling down" on items under their control such as construction cycles and workflows.

Construction Scheduling Offers an Effective Management Tool

Cycle time doesn't live in a vacuum -- and can't be determined or measured in the abstract, either. Do you have a published schedule -- do you track progress against it? Does everyone look at the same schedule or are there multiples floating around within the organization? If so, there's where inefficiencies multiply!

If there's one schedule, not only can you measure cycle time but you're able to provide consistent, reliable schedules to your vendors. That's a win/win as your vendors can rely on your schedule to book their crews. That lets your vendors get and stay efficient.

Construction scheduling software will help you develop the tools so there's only one schedule (for everyone -- within and outside the organization). Not only can you track and measure against it but..your vendors will have easy access to it and can rely on it.

CPS FieldCollaborate: Award-winning Construction Scheduling Software

We're available to provide a FieldCollaborate demo -- and we'll show you how to implement and use software that has resulted in up to 30% cycle time reductions -- day in/day out!

2017 Means More Buyers, More Selections: How to Manage Customization

A Builderonline article, Your Biggest Competition isn't Other Builders, highlights advantages to purchasing a new home when compared with an existing home sale.  The author, Myers Barnes, highlights 7 key selling advantages.

The second key advantage is customization and that asks a basic but key question:  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.

FieldCollaborate: Improve customization processes

And, a reminder: Millennials -- expected to be a key 2017 buyer profile -- are very keen on customization and personal style!

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

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

Previous Blogs mentioned the need for simplification 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 home buyer perceptions, as well.  No one wants to hear the neighbor was able to add the granite counter top 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 and provides field managers 24/7 data access necessary to keep up with options activity.  They're able to see what has been ordered on Lot 12 -- and when.  It's possible to view drawings -- 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. CPS can help you determine what processes will best help you -- CPS•CRM manages option selections including cut-offs and FieldCollaborate provides critical 24/7 access to selections, schedules and drawings.

Gen Y and Housing..beyond Tech to Location!

Gen Y, Echo Boomer, Millennial...regardless of label, we're looking at z population demographic whose members were born between the late 70's and early 2000's.

Much has been written regarding their approach to just about everything: technology, shopping, relationships, family.

Of course, they're more tech-savvy (although many "connected consumers" aren't part of this demographic). A current term is "digital native" (as compared to digital immigrant, for example).

As a result, according to a J Turner Research Study, What Do Residents Want? Trends in Resident Technology and Communication Preferences (read it here), Gen Y members shop using smart phones, laptops and tablets.  And, they use these devices when searching for a home, as well.  In fact, it might be noted that the younger the prospect, the more likely they will use social media and the internet to search. 


What's nearby? Try highlighting the neighborhood!

We'd suggest "test driving" your marketing processes on some of these devices; how do you measure up?

What has also been found when analyzing housing "hot buttons" for this group is: Gen Y housing wants/needs aren't that different from previous generations.  Builder, in a 9/25/12 article, suggests "satisfying the needs of those prospects still seems to be an exercise driven by community location and service reputation."

Location trumps design and amenities and McDonald states "location, efficiency and adaptability" as critical decision points.

What To Do to Get More Customers?

Traditionally, salespeople would answer this question by saying: have a good product, put together a great marketing program, cold call leads...you get the idea!  All over the place, in other words.

Leo Widrich, in a BufferApp blog available here, suggests we need to spend time understanding how our customers think -- and increased sales will result.

SalesTouch: Light Up Their Brain..and Go Green, too!

He talks about 10 things you can apply today to get more customers; we've narrowed his list down to 3:

(1) Use Urgency the Smart Way -- creating a sense of urgency or scarcity is known to drive up sales (think: iPad, Elmo, Wii). 

What Howard Leventhal suggests is critical: people tend to block out urgent messages if they aren't given information on how to followup!

There's a message for every builder: put your CRM to use! That means schedule follow-up activities for your agents (emails, phone call reminders, hard copy mailings) -- whether agent-generated or automatic. 

(2) Make Their Brains Light Up 'Instantly" -- It's your brain's frontal cortex that is highly active when we think about waiting for something.

HomeBuilder CMO's: Your Construction Team Can Help!

The rapidly changing relationship between marketing and technology has been discussed by many; we found an interesting article summarizing an IBM study analyzing CMO issues. We think there's an opportunityto utilize technology employed by your construction team to help address the areas highlighted as CMO concerns:

(1) data explosion and social media;
(2) growth of channel/device choices; and
(3) shifting consumer demographics.

What do you think?  Are these your concerns? And.. are we serious about how your construction team might help?  Absolutely!

Live from your job-site: relevant and engaging content!

We like to think your construction team can help you deliver value to your customers and help create lasting relationships with your customers, as well.  How?  By taking advantage of recent construction scheduling software features utilizing new devices mentioned in #2 (above). 

Encourage your Field Managers to take "stage of construction" photos or video.  CPS FieldConnect Mobile makes it easy to email those immediately -- from the jobsite. Then, post those images on your website! 

Have a special "behind the scenes" story to tell?  Going green in terms of materials or processes?  Here's a unique, up-to-the minute way to tell your story! And, these stories will help you stand out -- both to potential and current buyers.

Social media (#1 on the list) is another great location for these stories.  Post Lot #12's grading photo; there's no doubt Lot 12's buyer will re-post it on his/her Facebook page, too!  Now, your buyers are joining your marketing team; and they're telling your story!

Did you know over 60% of Millennial (aren't they are large component of #3 above?) social media users will look-up a brand mentioned on a friend's page? You've just expanded your marketing reach -- not only in sheer numbers but to a demographic that is very relevant in today's market.  And, you've made a huge step in keeping them engaged; who knows when you'll post another image or aticle directly relevant to them? 

Try it; let us know how your content is becoming more relevant, more appealing and helping address those concerns outlined above.  Want more information about CPSFieldConnect Mobile?  We can help there, too!