Automate Your Processes to Build Profits

Posted in: Blog- Oct 12, 2010 No Comments

Builder Radio interview with Charles Schneider, Chairman & CEO, Builder Sourcing Corporation.

In today’s world every home buyer is starting out on the Internet, so every builder needs to establish a presence there, to make a good impression, and to create the interest to come up with a lead. Then, they need get that lead into the hands of a salesperson quickly that can respond to the interest with a phone call or email that engages that prospect in a conversation that gets them to come in and visit.

That may sound simple, but it takes a system in place to make sure that occurs fast.

Systems such as CRM, automated estimating, upsell and change order tracking, and warranty management can help sales people generate various scenarios of purchase contracts; this particular house, with these options, on this lot, etc. They can run financial calculators to be able to determine financial affordability for them.

They can also help you save a lot of time by making it a lot more efficient to handle the volume of people that come through the door. The whole idea is how to do more with less and that has been a big part of businesses implementing these processes and systems. Then, they can get that information to flow over to the building side of the house; there’s no guessing about what is or is not being included in a particular home.

We can also do things like sell options to a home buyer while the building is going on. With these systems we can know exactly when to sell up to the last minute. Through automation we can get that into the process without a lot of work and can notify all the subcontractors about changes or additions instantly, keeping the whole construction process moving forward efficiently.

In the bidding and contract areas, we’ve seen a lot of builders with reduced staff that want to rebid work but are limited to a certain number of subcontractors that they can include. With good systems we can invite a large amount of contractors to bid, get the results back and compare them all to get better pricing by means of competition without a lot of work.

In the area of customer service, warranty and the ability to know several years later what went in to the home, who built it, who the subcontractors were, what were the products – having all of that information at your fingertips enables a customer service rep to handle all of that much more effectively and quickly. It also tracks statistics and shows what problems are occurring and what needs to be addressed.

This all leads to the financial systems going paperless and the ability to go to inspection paying, where you pay based on completion of work based on the contract. We no longer have to wait for an invoice. We avoid a lot of the paper work and minutia and streamline the entire situation.

Systems can be used for what we call business intelligence and alerting. For example, I can have a Dashboard that will show me all the prospects and where they came from relative to a particular model home community. So if I have billboards along a particular highway but I’m not getting any prospects from the areas served by that billboard, maybe I don’t need to be spending money on this. If I run radio ads or newspaper ads on a particular weekend, did I see any traffic from that event? A system can tell you that.

In the construction cycle area, if I can see at a glance all projects behind or ahead of schedule or above or below budget, I’m in a position to act quickly instead of having to wade through all the reports to get to the same information. These are areas where process and systems really come together to improve results.

A Process for Streamlining Cycles
We advocate a single, fully integrated software platform vs. modules that serve different components. We’ve found that people struggle with integrating what happened in a sales contract to what’s going to happen in purchasing. . Using a fully integrated system really makes a lot of these things actually possible.

In the area of managing a construction schedule, the key part is having all the steps that you want outlined. It’s easy to say that all builders have these things, but are they as disciplined as to what’s required when you put it into a computer to have the details correct? Often when I ask someone if they have a construction schedule they say “yes,” but when I ask to see it they struggle. They know the steps, but when it comes to sitting down to know how long every step should take and what needs to be completed before others start, those are the details that are needed before the rubber can hit the road. Linking up all the tasks to every activity that goes on and saying that this option needs to be decided upon before this step in the schedule is completed needs to get out of their heads and onto paper so we can put it into the software and reap the benefits. It requires a lot of discipline.

So, you get to take your best practices and your best thinking and apply it to every situation. If they hire a new super or a new salesperson they’ll come in with the best thinking and the best process that the organization has come up with. It makes assimilating people and following particulars easier and leads to better results. It’s becomes a framework that’s repeatable and predictable.

Starting the Process

There are two problems that most businesses run into when integrating a systems process. One is they find it difficult to tell a computer what it is they do. Most people know what they do, but to tell all of that to a computer is an entirely different matter. A second problem is that the processes are not integrated. They’re using modules and people have to key in data from one to the other.

So when we got into the systems business we saw these two problems and we came up with something we call FastPath, where we developed a series of best practices that we can then implement into a system with all the necessary work flows. Then we take a builder’s existing data and conform it to the system. When we sit down with them we don’t ask them what they want the system to do; we sit down with a system that’s already filled with their data and say, “how do we make the system work for you?”

With the Internet and cloud services, the ability to deploy some of the bigger software that the larger builder companies in the country are using can be done at a fraction of the cost that builders used to spend to install servers, software, maintain and then integrate it all. None of that is required now.

The payback time would probably be within six months. The initial costs are so low and the systems costs are monthly charges based on home sales. The costs are typically a function of something positive happening, such as production starts. The implementation costs are anywhere from $10,000 – $30,000 depending on the size of the builder and the complexity of the operation. The returns are that you can instantly capture savings with better processes and the ability to follow up on more leads. No leads are allowed to fall through the cracks. Even the builders that are using outside salespeople from a brokerage firm are using the system because it helps them sell better and the builder gets to see the activity and dialogue that’s going on between sales and prospects. Then they can fine-tune the process to generate more sales. All of these things have the ability to payback.

Some used to views systems as confining, but as less people do more work it becomes enabling. It keeps people from having to do the drudgery. If there is a particular task that the system is saying needs to be done, you know it instantly and can address it.

One company organized an event where they hired a large food truck to come into the neighborhood and serve food. They tweeted this on Twitter and it generated so much traffic that they were able to sell 4 or 5 houses immediately. They were able to capture the traffic through their social media network and generate leads that went right into their lead system to use on future follow up. There’s no way to deal with the volume of work given the number of people that we have today without the use of these tools.

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