Kevin Kevin Estes, a second-generation builder, started Estes Builders with his wife, Jo Anne, in 1990 in Sequim, Wash. Even then, with just the pair of them juggling all the roles, the focus was on systems and continuous improvement. “Being a system-driven company allows us to keep our promises,” says Jo Anne, who is the company’s controller. “When we tell a homeowner it will take six months to build their home, we want to make sure it takes six months. Our systems are checklists and touch points and forms, so we know when we have a walk-through with a homeowner [that] everything on their plans is there and in the right place, and we get paid on time. We do what we said we were going to do. … When we find something that is not working, we go to work on fixing it.”
Today, the company is a two-pronged operation, offering both production and custom homes, primarily to out-of-town, active adult buyers looking to retire to Washington state’s Olympic Peninsula. Even though Estes Builders is only a nine-person operation, systems help the company implement “many of the recognized best practices of large-volume builders,” it wrote in its America’s Best Builder entry.
“We’re a really diligent, continuous improvement company,” Kevin says. “We’re not a whiz-bang company, but we tend to execute pretty well. Like the tortoise and the hare, we just get a little better every day.”
It’s paid off handsomely for the company. The only National Housing Quality–certified builder in the state of Washington, Estes Builders also is a two-time winner of the National Housing Quality (NHQ) Award, taking silver in 2005 and gold in 2007. It legitimately boasts that it has delivered 99 percent of its homes since 2002 with zero known defects and markets itself as the Olympic Peninsula’s award-winning builder.
THE POWER OF PARTICIPATION
One of the powerful lessons Kevin has learned from the pursuit of continuous improvement is that a very small adjustment can yield tremendous results. At his regular meetings with trade partners, for example, Estes has them sit in the order in which they work on his houses.
“It gets them talking,” he says. “It’s amazing what just doing that does.”
Even though he knows that he’s going up against companies that dwarf him in revenues and resources, Estes says it’s well worth it to enter such competitions as America’s Best Builder and NHQ. They give the company an objective, external measurement tool.
“It’s intimidating, for sure,” he says of the application process, which requires collecting hundreds of pages of documentation. “At first you feel like you’re going to get flayed, but you just buck up and do it. As a small builder, you don’t have a board of directors. You don’t know how well you’re doing until you send it to someone and see where we are. I use it for that.”
He also takes full advantage of the benefits of winning such prestigious awards, including the contacts he’s made with other winners and judges.
“If you have any kind of success, you start rubbing elbows with people who are passionate about building and they’re in some of the best companies,” he says. “Typically, they’re more than willing to share information. I have a network of people who are high achievers. They’ve either done it and been successful at it, or done it and say, ‘Don’t do it.’”
SIGHTS SET ON SALES
While the NHQ program focuses squarely on construction systems and processes, America’s Best Builder looks at the breadth of a builder’s operations. In 2008, the Estes leadership team identified sales and marketing as one of its strategic initiatives.
“That’s where the rubber hits the road,” says Jo Anne. “We believe every person is a salesperson. It doesn’t matter if you sit where I sit and don’t see people who come through the front door, it’s all our jobs to convey a positive impression of Estes Builders. If we meet people in the grocery store or on the street, we can talk about Estes Builders. We’ve trained our trades. … It can be done, but it is a systemized process. It gets our brains thinking, coming up with something out of the box that not everyone is doing.”
This year’s marketing theme is that every single lead that can be generated is precious, says Craig Stevenson, the company’s custom home manager. The company shifted away from display ads and blanket marketing to more targeted tools, such as direct mail and online search campaigns—a critical step for builders whose buyers typically live outside the area. On-site events and local ads are a waste of money for Estes Builders. It needs to wow its prospects in cyberspace.
“Where we’ve been really good is seamless integration between online marketing and the sales department,” Stevenson says. “Most builders have a plan for what they want to have happen when prospects come into the model. They don’t have a similar protocol for online leads. … We’re seeing nimble and immediate response to online leads.”
He’s also seeing big results from two other sales initiatives. For the first time in the company’s history, Estes Builders opened a sales center in 2008 in Sunland North, one of its production home neighborhoods. While Kevin would prefer to have sales handled in-house, the company’s volume doesn’t justify it yet. Instead, he presented his proposal to the area’s top five real estate brokers. Today, his sales center has three dedicated agents who provide daily coverage. Estes Builders provided them with training and owns all the leads.
For its custom home division, Stevenson has been hard at work on building relationships with the people in the area, such as Realtors, bankers, engineers, property managers, and septic tank installers, who are influential with land buyers who will be looking for a builder.
Those influencers get a personal tour of the custom homes they helped deliver—a treat for people who rarely get to see the finished product, Kevin says. “We want to be the first name that comes out of their mouths when a customer asks about a builder,” he says. “When they are there, we are asking for referrals.”
Stevenson has conducted in-person and online training sessions for real estate agents, both on what the agents’ customers need to know about buying land to build a house on and various aspects of construction that will help the agents be more effective in their business.
“The modern electronic marketing is very effective, but what’s almost as effective is good, old-fashioned personal marketing,” Stevenson says. “It’s not only inexpensive, it’s also super-effective, especially when it’s in conjunction with electronic marketing.”
When the electronic marketing leads to a prospective buyer’s visit in search of their dream home for retirement, Estes Builders educates them about the benefits of building a custom home, as opposed to taking advantage of what buyers perceive as tremendous savings in existing homes.
“We’re selling against the perception that there are these screaming deals out there,” Kevin says. “We decided to let the buyers be aware of the distressed properties and pick them apart. … I’m thankful we worked really hard a long time ago on delivering a great home on time and building a great reputation because we’re being scrutinized now more than ever.”
EYE TOWARD THE FUTURE
Kevin and Jo Anne Estes also have taken a very systematic approach to succession planning. With a long-term goal of playing a less-active role in the company, they’ve identified a management team and are each currently mentoring the people who will someday replace them.
But that’s not in the plans for 2009. This year, the company is expanding into two new markets, each within an hour’s drive of Sequim. The decision came, in part, because the company can use 90 percent of its core trade partners and current personnel in the new markets.“In a booming market, you have to hire new people,” Kevin says. “In this scenario, we can just focus on how the new market works. … It’s definitely a bootstrap operation, but it’s cost effective. As the market returns to normal, we’ll have the ability to create real divisions in those areas. We’ll go get the business first, build some homes, and then go get the overhead. We’re pretty pumped about it.”
The expansion will be a step toward his goal of building 50 houses a year. That is a benchmark that he believes will allow his company to bring design and selections in-house, which would give it more control over the customer experience and yet another point of differentiation from the competition.
One thing is certain. When it happens, there will be a system in place to make sure everything runs the way it’s supposed to, and an on-going effort to make it even better.
President and CEO: Kevin Estes
CFO and Controller: Jo Anne Estes
Quality Manager: Patricia Troxler
Company Focus: Systems-driven company that builds both production and custom homes, primarily for active adults drawn to the market, which is a retirement destination
Year Founded: 1990
Web site: www.estesbuilders.com
Notable: Estes Builders has delivered 99 percent of its homes with zero known defects since 2002. The company is the first and only National Housing Quality Award–certified builder in the state of Washington.