WHEN PROSPECTIVE BUYERS venture into Desert Crossing, a single-family community in Adelanto, Calif., by Costa Mesa-based Canaday & Co., a sales representative tells them all about the three- and four-bedroom homes and the amenities of the community. They can learn about the company's history, its focus on quality, and its buyer services. When they sign a contract, the sales rep congratulates them on their purchase of a Canaday & Co. home.
Little do they know that the sales rep isn't a Canaday & Co. employee. He works for Ultimate New Home Sales and Marketing, an Anaheim-based company that staffs sales centers.
Chris Canaday, the owner of Canaday & Co., says he outsourced the process in 2003 after having it in-house for years for a number of reasons. He could see “a lot more houses coming down the pipeline” than he wanted to handle in-house. “It's a battlefield out here, no doubt about it,” he says. “There are a lot of people trying to get market share away from you.”
Plus, Canaday builds in locations as far as 150 miles from the main office. “That works against us a little,” he says. “If we were focused in a 10- or 20-mile radius, we might look at it differently.”
The bottom line was that Canaday felt that Ultimate does a better job than his company can. It's cost-effective to use Ultimate, he says, and the company has a special focus on training.
OPPOSING VIEW Cost-effective or not, Los Angeles-based Castle & Cooke will never outsource sales center staffing, says Pat Henneberry, vice president of home building operations.
“The man I work for told me that you always know who's running the restaurant based on the service,” Henneberry says. “If the owner is there, it's a whole different culture than if the kids or others are running it. You're dealing with us, not someone who represents us. We don't send you to some company where you hope they're representing our best interests and not their own. ... It's really our culture to do that.”
Canaday respects that opinion but thinks he's able to accomplish the same thing with a contracted crew. He sets up his model complexes, and Ultimate staffs them. He has approval over the hiring of sales team members, who sign contracts as Canaday & Co. agents. The sales team works only for his community until he folds up shop and moves on.
“The branding is ours,” he says. “It's just as if we were doing our own sales.” The arrangement has worked well for two years now. As long as it keeps working, he's not inclined to make any changes.
ALL ABOUT OUT In the home building business, outsourcing is a standard practice. No builder hires staff to actually construct a house, and it's common to job out just about everything from land acquisition and architecture to consumer research and quality control inspections. But when it comes to customer-facing processes, such as staffing sales centers and handling warranty claims, builders have tended to consider them core functions that encompass the company's culture and brand position. As a result, those processes are typically kept in-house.
Learn more about markets featured in this article: Los Angeles, CA.