Most dealerships and other industry businesses would love to get more volume builder business. But in today’s market this is especially difficult. Builder business is high volume, highly repeatable and very maintainable if done correctly. The problem is volume builders are very price sensitive and are the most demanding of customers.
Soliciting volume builders for an opportunity can be intimidating. What can you offer them other than a lower price? How can you make money? How can you make sure you keep them after they become a client?
In visiting many distributors who dominate the volume builder business in their regions, I have noticed some common themes. After many long conversations with salespeople, designers and owners, I’ve compiled these five keys of attracting, servicing and retaining production builders.
1. Make it Easy to Switch
Builders do not want the hassle of putting together (or rehashing) the entire options/selections/pricing model for every house plan whenever they take on a new company. This is your opportunity to walk in the front door and lay out your streamlined, well-structured strategy of how these things will work without the builder having to recreate it with you.
You should have a system internally that helps you easily & quickly structure a program for any builder and present the program to them in a short time frame. If quoting new builders results in weeks of work quoting plans, you need a better way. The output of your internal system should be a well-presented, easy to understand program that any builder salesperson can explain to their customers.
Give the builder the low base price they want (which is the way in the door with them), then make up for it on the options and upgrades. The key here, if you get the work, is to make sure the builder’s salespeople are trained on options and upgrades so they know how to up-sell effectively. Keep a strong relationship with your salespeople to keep them abreast of updates and to ensure they’re succeeding.
If you approach the builder with an impressive structure like this, you’ll pickup more of them than your competition.
2. Service, Service, Service!
The best way to illustrate the results of outstanding service is with a real-world example:
Greenville Cabinets’ largest builder received word from headquarters that they had made a deal to buy cabinets direct from a major cabinet manufacturer. All locations were to make the transition. The builder’s Greenville office was up in arms. Greenville Cabinets had provided such impeccable service for years and the superintendents and managers knew it would be a losing proposition for them if they switched. In fact, they were so adamant about it, headquarters finally gave in and allowed the Greenville division to continue their cabinet deal with Greenville Cabinets, while the other cities would make the switch.
Here’s what happens: In the superintendent weekly production meeting, they either talk about how your service put them behind because it was poor, or how it helped them because it was outstanding. If it is consistently about how it put them behind because it was poor, it’s just a matter of time before you’re gone.
Make sure your company provides the kind of service where you are spoken of consistently in a positive light, so that when this kind of decision comes it will feel very costly for them to switch.
Greenville Cabinets had an outstanding “service culture” where they had the right people on the ground at all times to take care of issues quickly. This culture is imperative in keeping builder business.
3. Be Proactive
As part of impeccable service, being proactive will make a huge difference. For example:
- Punch the house before the superintendent does. Always keep them informed of the job’s status. Make them feel like they don’t even need to look at your work because they know you have it under control.
- Get things fixed before the superintendent has to call you about it. Every time the super has to pick up the phone and call you about a problem, it’s a mark against your service.
- Take homeowner’s issues off the superintendent’s hands and handle them yourself. Nothing buys more loyalty than being able to tell the super that “it’s complete and the homeowner is happy” when the super didn’t even have to be involved.
4. Be Clear & Consistent
Builders only work with people they can depend on. Be clear about what you will and will not do when facing common problems. What they’re looking for is consistency and predictability. Have an understanding with your builders in advance of what should and will happen when problems arrive.
McDonalds isn’t a huge success because it has the best food. It is a success because it delivers an average level of quality – consistently. The builder doesn’t need to like all of your decisions if they love your predictability. Major disagreements with builders almost always come from missed expectations. If they ever have to guess on what to expect, they’ll always guess optimistically, then try to hold you to it.
5. Build the Relationship
Everyone likes doing business with people they know and trust. Spend social time with your builders (and superintendents). Let them get to know you and your values. It takes time, but it’s much more difficult for them to terminate a relationship when there is emotion attached. They will fight much harder to keep you when this is the case. Make it difficult for them to consider leaving a friend for a lower price.
Key #5 may be the most difficult for some businesses, because it really requires time outside of work to build the relationship effectively. Even so, it pays significant dividends.
So how do you make all these things happen consistently with all of the other things on your plate? You must find ways to free up resources so they can be allocated in a more effective manner.
One of the most effective ways is to streamline and automate your quoting and ordering process to eliminate delays and mistakes. Mistakes cause crises and consume additional resources of both your company and the builder. Most dealers and remodelers have difficulty effectively servicing their customers because they’re too busy putting out fires. Creating streamlined paperwork at the beginning of the process is critical.
Remember, you attract high volume builders with an appealing pricing program, you make your greater money on the upgrades, and you keep them happy through outstanding service.
Setup a structure to implement these five keys, and you’ll succeed at generating profitable sales from volume builders.
This article was originally published in the Kitchen & Bath Design News magazine in October 2007.