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Selling to Small
Volume Builders
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Volume Builders
Who is this large volume builder?
There are three basic types of large volume builders.
1. The local builder who has grown to build 100+ homes a year in a given market.
2.
A regional builder who has total volume that exceeds 100+ homes a year in a wider
territory.
3. The nationally known builder who builds in a variety of national regions,
(Northeast, Midwest, etc.)
Some of these are publicly traded, while some are privately
held. There is little difference in how they are administered. Some of the privately
held large volume (LV) builders have their own corporate jets, while the publicly
traded fly commercial, in business class
Local and regional based builders will normally
operate from a single office for the purpose of making purchasing decisions.
The purchasing
manager will be the decision maker. Some regional or family owned larger builders
might choose to augment the buying with the user of a committee that will review
and often recommend new products or design changes. You will have to get past the
gatekeeper to see the PM. The most effective way to do this is an introduction from
a member of your network. The purchasing manager will be pressed for time. When your
are granted an audience, make every minute count. The basic agenda of these skilled
professionals is, quite simply, their future.
The PM position can be part of a career
trek. If performance is good in this critical aspect of the building business, good
things can follow. The PM often has an incentive to perform. Performance is based
on keeping projects on or below budget. If they succeed, they are rewarded in a variety
of bonus plans. On budget or below! Call backs, out of stocks, delays in building
are not part of the process in their world. If you are fortunate to have the opportunity
to work with more than one LV builder, be aware that no two are alike. You will find
guys and gals, rookies and grizzled veterans. That is part of the fun in selling
to LV builders.
The final characteristics is this turnover at the position, with
those leaving often going to other LV firms. If you have a solid relationship with
the PM with one builder, there is a great opportunity to add another builder to your
base when he or she moves on. This business is still based on relationships, regardless
of the size of the builder.
There is a growing commitment from builders of this size
to the service aspect of their business, in particular to price. Builders of this
size will have a service department. Do not be surprised if they have an aggressive
follow-up for the first year. Some LV builders offer extended warranties. How does
this impact your business? Read your contract: there maybe clauses obligating you
not to only supply the product within a predetermined time, but also will obligate
you to perform within as little as 72 hours, without receiving a charge back. Again,
read your contact. Figure this in your price.
Be patient. This will take time. Most
of your competition will not have the patience to endure what will be required to
close the sale. Many hours will be needed to become a savvy sales person. As you
talk with members of you network about the characteristics of this builder and the
key decision makers, you will note those quirks that all builders have in procedures
and policies. Can you fulfill them?
You will need to visit job sites and see where
your product or service fits into their building plans. If the job superintendent-community
manager is not a decision maker, and he or she may be on some trades, then it would
be wise to begin to develop a relationship. Members of your network will be able
to provide valuable insight, not only names and locations of these important players
working with the large volume builder, but their personal expectations. Listen to
their stories, gain their trust, and you are on your way to building a solid base
to approach the true decision maker.
If you are not the owner of your company, you
will want to consult with those in leadership as to your plans. Your company will
have to be willing to make the necessary investments in personnel, equipment, and
inventory to meet the specific demands of the LV builder you are pursuing. One of
the major mistakes made by those who are attempting to sell LV builders is assuming
that it is business as usual. Not so. Be prepared, and the profits will come. Planning
and patience will pay off. Be prepared to spend months and maybe even years before
the builder says "yes." If you have done your homework, the payoff will be good.
Commitment
to a community based on sales and strength of the local economy. This will vary between
the three basic LV builders. Local large volume builders have had a deeper stake
in the community and tend to work through the more challenging times that may come
to a given area. Regional LV builders may just put land in inventory for a time until
he area economy returns to strength. They will simply shift resources to other areas
in the region that are stronger. If there is not a great deal of reasonably priced
land in inventory, national builders will pick up and move on. It is not unusual
to see the same builder return to a previously strong market once the local economy
has returned.
Large volume builders buy and develop much of the land and lots they
use. It is not unusual for a builder of this size to purchase raw land and "bank
it" for future needs. Another characteristics of this size builder will be to purchase
large tracts of lands well over 500 acres, and then make a long-term, mixed used
plan for that land. Single family attached and detached, active adults, shopping,
commercial and maybe a school thrown in for good measure that will see a builder
through four to five years. In selected locations, you may find two large volume
builders building in the same development. If this occurs, one builder will attract
a particular population, move-ups for example, while the other builder may serve
active adults. Another growing trend is for the large volume builder to purchase
the land on a takedown basis from a developer who hands over the tracts in a specified
order and time sequence.
Large volume builders almost always do their own in-house
sales and marketing, while agreeing to cooperate with realtors on a predetermined
fee or percentage basis. There are some real estate marketing companies that specialize
in meeting the unique demands of the large volume builder. They will in turn work
with the Sales Manager of the builder client, while supplying in home sales people
for various developments.
We can help you effectively market and sell
to this LARGE Volume Builder -- click here
Selling To LARGE Volume Builders
