As production builders move toward offering structured wiring packages and the digital amenities that use the wire network, a question is bound to pop up: If we're are going to offer these features, would we not be better off handling sales and installation ourselves?
The immediate answer would most likely be “NO WAY.” Employees, benefits, turnover and training are just a few of the cost-generating considerations associated with putting a new crew on staff. But for some builders, it may make sense for a number of reasons.
The most important of these is control. An in-house digital home unit can ensure uniform quality across all installations. It can manage inventory so that what is needed at any given time is where it should be. It can reap significant returns from manufacturer rebate programs and direct-to-builder sales programs by standardizing equipment installations and buying in bulk. It can work itself into the construction schedule in such a way as to avoid conflicts with other crews or subcontractors. And it can provide quality customer service after the installation.
A CASE IN POINT The TECHTouch division of Village Homes of Colorado, based in Englewood, has done all that, and has gained one other significant benefit: It makes money. Village Homes, which is a private company, won't disclose financial information, but Bob Micho, director of TECHTouch, says the unit is coming off a record quarter in sales and did $715,000 in revenue last year, servicing 155 home buyers. (Micho's name might be familiar to football fans of a certain age; he played tight end for the San Diego Chargers from 1984 to '85, and for the Denver Broncos in '86 and '87, including Super Bowls XXI and XXII).
With a staff of 14 split among administration and installation and seven trucks that also serve as mobile advertising billboards for Village Homes, TECHTouch services the entire output of Village Homes of Colorado, 700 homes last year and an estimated 1,200 to 1,500 this year. The digital options are showcased in the company's design center and organized into good-better-best packages featuring systems and components from such companies as Speakercraft, Marantz, Runco, Draper, Samsung, ADI, and Triad. (Micho says the company avoids products that can be easily price-shopped on the Internet.) Packages can run the gamut from a wiring package all the way up to a full-on home theater and entertainment system. TECHTouch, however, is not yet involved with integrated home control systems. But, says Micho, “We'll build a rocket ship for them if they want the performance.” Of course, they also have to be willing to pay for it, too.
The TECHTouch division was the brainchild of Village of Colorado president and COO Cheryl Schuette, “It might have been influenced somewhat by the fact that Denver at the time was something of a tech hub,” says Schuette. “We wanted to find ways to carve out a niche in a very competitive market.”
It wasn't long before it became a custom electronic design and installation operation, complete with membership in the Custom Electronics Design and Installation Association (CEDIA). “It evolved quickly,” she says. “In order to succeed, marketing wires in the wall, you have to bring it to life.” The division came close to break even in its first year, 1997-'98, and it has been contributing to the bottom line ever since.
Neither Micho nor Schuette would advise other production builders to simply drop everything and jump into the design and installation space, but both believe builders should give the go-it-alone route serious consideration. “Builders who have a good relationship with a sub, that works well,” says Micho. “In terms of production builders, I think this is something they have to address. A lot of companies that are not doing it are missing the boat.”