As more and more builders continue to consolidate divisions and exit markets, it appears that a return to handling options and upgrades directly at the model home level, as opposed to an off-site retail environment, could be in the cards. As such, the editors of Big Builder set out to get their readers' take on the situation.
When asked if they felt centralized design centers would remain prevalent as builders return to core activities and business practices, results were pretty evenly mixed, with 42.5% of respondents saying yes, 45.0% saying no, and 12.5% remaining unsure. Overhead appeared to be the determining factor. As one respondent put it, "The cost per sale far exceeds the value of the separate center."
Noted another, "As an interior designer for several builders, I am seeing most of the selections get made at the model as quickly as possible. This keeps the momentum and enthusiasm flowing--as well as the client buy-in and upgrade and overage payments on site."
Should a company decide to phase out its design centers, the majority of readers--62.5%--felt that it should return to the historical practice of handling the selections process within the model and/or community sales office, while 20.0% disagreed and 17.5% remained unconvinced either way. Said one respondent, "They should handle selections at the models, but [they should] use a designer, not a sales agent. It cuts costs but still makes the buyer feel that they have been treated well with a 'designer's touch.'"
On a side note, Big Builder asked its readers if they thought that pre-sales of model homes, which are then leased back for a few years for sales purposes, should factor into the production builder business model, half of the respondents said yes, while 31.6% said no, and nearly one in five were unsure. "It makes good sense today," said one respondent. "A couple of years ago, it did not."
Yet as another pointed out, "I think this is a nightmare for the customer service or warranty department."
All in all, two conflicting ideologies appeared to be at play: "Variety is the spice of life," and, "Less is more."
Said one respondent, "Although the market is soft, the people that are still purchasing are still buying options. The more choices and variety, the better!"
Countered another, "Limiting the number of SKUs by big builders will go a long way toward preventing the mess we are now in. More is not always better."
Still, most seemed to agree that the ability to close a sale should take top priority in today's market.
"Anything to do with sales, selling, and closing must be job No. 1; everything else is secondary," explained one reader. "Very few sales will be won or lost in design studios. However, many will be lost as salespeople get burned our, can't close, don't have their head in the game, etc."