Crunch Time

The perfect spiral pass lands cleanly into the waiting hands of a receiver, who has just bolted through a seemingly solid wall of defenders. A field goal kicker puts one through the uprights from midfield with seconds left on the clock. A defensive line saves a win by refusing to give an inch on fourth and goal.

At crunch time, the gridiron pros make it look as natural as breathing. But none of the jaw-dropping athleticism displayed during the game happens by accident. It's the result of untold hours of body-bruising practice, whether the players are hot, cold, tired, sick, or emotionally drained. Day after day, year after year, elite athletes drill the basics until they are mastered. And then they run the drill again.

For builders, the current market conditions are no game and the stakes are nothing less than survival. You can't afford to drop the ball because there just aren't that many opportunities right now to put points on the board. That's why it's critical to master the fundamentals of the business: hiring and hanging on to good employees, holding a customer's hand through the sales process, controlling your jobsite, and building customer satisfaction through warranty service. These are the basics that builders keep saying they have to get back to. They're critical processes that have to be practiced every day until they're so ingrained, they're as natural as breathing. And then it's time to run the drill again.

Building Winners

The best building companies have owners and managers who know how to recruit and maintain talent.

Want a team that consistently goes for the gold ring? One way to assure your company's future is to always be on the offensive, recruiting the best people.

Bill Carpitella, CEO of the Sharrow Group, an executive search firm for the home building industry based in Rochester, N.Y., says the companies that have the most success hiring the best talent push the recruiting chores back to the managers who are closest to the construction process and back-office activities.

“Who better to know who fits into the company's culture than the people who already work for you?” Carpitella asks.

The consultant says your company's top managers should always be studying the competition to spot people who would fit in well with your organization. You should also encourage rank-and-file workers to make recommendations.

“Spell out the company's priorities and needs and tell [your] people you'll pay them $1,000 if they bring in somebody the company needs,” he says. “Make a big deal of it when employees serve up ‘A' players,” Carpitella adds.

So few builders recruit in any systematic way that you're liable to gain a huge competitive advantage by getting your employees more involved. Here are six ideas for building a strong team:

PROFESSIONAL HELP: Expect to hire an outside recruiter to get in touch with top-flight financial or information technology people.

1 Use multiple recruiting sources. Building a winning staff takes a broad mix of skills, so it's really important to reach out to as many sources as possible. Jason Schaeffer, president of Tim Schaeffer Communities in Berlin, N.J., says he finds good administrative people from the local newspaper, but if he needs to hire a CFO or a controller, he either uses a local or national recruiter or his own personal network of contacts. For recruiting project managers, Schaeffer says it's important to work with subs and trading partners, because they know who's really good and may know if someone is looking to change jobs. Another option is to see if a local university or community college offers construction management courses. The advantage of hiring recent graduates is they have the academic training, don't ask for too much money, and often can be trained more easily to fit into your company's system.

2 Train your people—and promote from within. Not every builder has a formal training program, which is why it's huge that Gemcraft Homes in Forest Hill, Md., set aside a specific training room that features the latest projectors and video equipment for Gemcraft University. New employees go through a one-day orientation and are also required to learn “soft” skills, such as how to deal with difficult people. Computer classes are also offered several times each month during work hours.

The training for salespeople and construction supers is very stringent. Salespeople train over eight to 18 months to obtain the title of community sales manager. Here's a sampling of some of the requirements: The trainees must work with at least two different sales managers for three to four months each; sit in on eight to 12 start-of-construction meetings; learn how to fill out the company's cost estimate sheet and sales contracts; and attend at least two walk-throughs with a super and home buyer. Sales managers must also learn how to use Microsoft Outlook and create documents and flyers in Microsoft Word.

The construction training is a 16-course program that's geared to turning assistant superintendents into full-fledged supers. Most of the in-house courses are a half day to a full day, and the average employee takes about one year to complete the training and pass the exam. The program includes classes on presettlement walkthroughs, preconstruction meetings, insulation, framing, and site and grading. Supers must also complete an outside proficiency test in the following four areas: preconstruction meetings, foundations, framing, and walkthroughs.

One of Gemcraft's goals is for the people it has hired as supervisors to have actually done the job of the people they are supervising. Offering the training demonstrates to employees that the company cares about their personal development. Builders who find that their shops are a revolving door need to start thinking about how they develop talent. If you can't afford a high-cost sales trainer, start by using your in-house people. Subs may also be available for construction seminars, and manufacturers are always available for product training sessions.

3 Put everyone in the company on an incentive program. The typical home building company will have incentive programs in place for its sales and construction staff. However, one of the best ways to breed loyalty is to offer some kind of quantifiable incentive for every job.

At Tim Schaeffer Communities, customer service people are rated on the average number of days service orders are left open; the number of items on the final walkthrough list; warranty dollars spent per home; how the customer rates the overall service experience; and whether the customer would recommend the company after 12 months.

The builder's estimating and purchasing employees are rated on how well they control variances; cost control from one quarter to the next; and maintaining margins. Administrative staffers are rated on how they score on customer satisfaction surveys; reports submitted on-time; and on-time accounting work.

Builders don't have to break the bank to offer these kinds of incentives. For employees who meet their goals, Tim Schaeffer starts off by paying a $50 bonus per closing up to $5,000. Money is always a great motivator, but the incentives are packaged in a way that clearly outlines the requirements of the job. For the most part, people react more positively if you clearly spell out what's expected of them.

4 Offer as much health care as possible. Health care is without question a builder's most expensive and important benefit. People will leave the job or opt not to take a job at your company based on the health care you offer. A lot of builders offer health care for employees, but not for their families. This is a mistake. Companies that find it difficult to offer full family coverage may ultimately have to dig deep and offer the benefit, but there are options. One possibility is to have employees pay an increased share for family coverage.

T.W. Lewis in the Phoenix area pays about 65 percent of family coverage and has the employee pick up the additional 35 percent. Another idea is to tailor the benefits to the needs of the employee. A person in his mid-30s is likely going to want and need a family plan, but such coverage may be less important to an empty-nester in his mid-50s with grown children.

5 Target future leaders. T.W. Lewis created a management development training program in which the builder pinpoints 20 employees as future company leaders. Employees selected for the program meet once a month for three hours on a leadership topic. Typically, course materials are handed out in advance and the employees are asked to make presentations. The presentations are then followed up by group discussions.

6 Organize team-building events. Don't underestimate the good will and sense of community you can develop by holding company picnics, trips to local amusement parks and sporting events, or simply hosting an open house at a model home. If you hold such an event at a model home, invite everyone, including the back-office and administrative staffs, salespeople, construction managers and supers, your subs and suppliers, and if possible, some recent home buyers who have been living in one of your new communities for a few months. - S. Zurier

Don't Drop The Ball

You can't score points if you don't hang on to the ball. In the sales experience, it's easy to lose touch with customers along the way. The best way to maintain control of the relationship is to hold their hands and walk them through the sales process. Here are nine tips for keeping your customers from leaving the field:

1 Put your best foot forward. Once prospective buyers show up at your community, you need to knock their socks off. Consumers are shopping between eight and 10 projects, says Christine Lutz, senior vice president of Chicago-based Garrison Partners, a real estate sales and marketing consultant, and you have to stand out from the pack. “If I had a choice between spending $20,000 in print media or $20,000 to improve my models and a better presentation,” Lutz says, “I'd spend it on the presentation. People are choosing better quality, and they're judging that on finishes and nothing else.”

Also, always accompany your prospects to the models. Take the time to do a proper interview with the customers, asking about their family and their lifestyle. Do they have children or pets? Do they work from home? Do they entertain frequently? Get the answers to these kinds of questions and tailor the model tour to point out the features that will enhance their lifestyle.

FIRST IMPRESSIONS: Look at your models as if you're the buyer. Make sure the plants in the landscaping are healthy, all the light bulbs work, and the walkway is swept clean.

While you're at it, make sure the sales center and the models are spotless. Check for trash on the sidewalks, dead plants in the landscaping, cigarette butts on the ground, and building materials lying around.

2 Be their cheerleaders. Perhaps the most dangerous time, in terms of buyers getting cold feet, is the first two weeks after a contract is signed, says Kelly Rae, director of sales and marketing for the Inland Empire region of Newport Beach, Calif.–based William Lyon Homes. That's the period of time when they tell all their family and friends that they're buying a new house. “Everyone is an expert these days,” Rae says. “We see people start to second-guess themselves.” To counter the nay-sayers, William Lyon staffers follow-up right away, congratulating them on their decision, and telling them how much fun they'll have picking out their options to personalize their home.

3 Give customers a guide book. Because the process is lengthy and complex, it helps to provide customers with a written manual to refer to. Not only does it help the customer know what to expect, it also helps everyone in sales, design, construction, and warranty share the same message with the customer. “We can say, ‘I'm sorry we can't entertain that request. Let's look on page 23 of the new-home buyer's manual,'” says Patti Grimes, vice president of community development and home building for Selbyville, Del.–based builder Carl M. Freeman Cos. “For [your people] to know you have their back is a great thing.”

4 Connect buyers with lenders. Financing a new home has gotten much tougher in recent months. The meeting with a lender is a critical point in the process that can often derail a deal. Sales agents can't offer advice on financing, but they can certainly provide general information to a customer who is filling out a loan application, says Bob Powley, area sales manager for Dallas-based Fox & Jacobs Homes. Even better, arrange to have a loan officer on site at least one day a week to make it easier for buyers to get their paperwork done.

5 Build community. Many builders are boosting customer satisfaction and reducing cancellations with events that bring together buyers whose homes will be closing at about the same time. Most often, these events are “meet the builder team” get-togethers to explain the home building process. At Harvard Communities, a Greenwood Village, Colo.–based builder, average buyers go to three or four events before they move in. John Keith, Harvard's president, personally leads groups of buyers on pre-framing, wine-and-cheese tours to point out all the high-performance features behind the walls. “The end result has been staggering,” Keith says. “People can't believe so much thought goes into it. It makes our buyers into these incredible advocates.”

6 Welcome buyers on the site. The process of home building is very exciting to most people, and they want to be there to see it happen. There are a few ways to handle this and still maintain control over your site. William Lyon Homes welcomes buyers to the site, but asks them to wait until the late afternoon; the workday is essentially over and the builder can devote his attention to the buyer. Plus, it's safer for the buyer when the site isn't active.

At Darling Homes in Dallas, director of construction Troy Rohr asks customers to call and set up a time to visit. “That way, we can give more of our time to them,” he says. “We want them to feel like they're the most important person there.”

Also, make the jobsite special for them with signage. Instead of the cryptic, “Lot 15-A, Plan 2347,” try something like, “Anderson Homes is proudly building the Magnolia plan for Bob and Mary Wilson.”

7 Keep them informed. Scoreboards are great, aren't they? In an instant, players, coaches, fans, and referees know the status of the game. Builders have phones, e-mail, and Web sites that can keep buyers updated. At the very least, touch base with your customers once a week during construction, even if it's just to say it rained all week and you couldn't get anything done.

“Typically, when people start to question their decision, you can trace it back to a lack of information or them having to go look for information themselves versus someone providing it to them [proactively],” says Powley from Fox & Jacobs Homes. “There is a constant ability to communicate with customers via phone and the Internet,” he continues. Fox & Jacobs has set up a Web-based tool called My New Home where customers can log on and view the most recently completed construction phase of their home.

WALK THIS WAY: At Harvard Communities, president John Keith leads a wine-and-cheese tour for his new buyers, showing them the high-performance features that add value and comfort to their homes. A unique twist on the standard, pre-drywall walk-through, the tours help connect new homeowners with the builder and their new neighbors, and help reinforce their purchase decision at a critical time.

8 Show buyers how to make the most of their new home. For many builders, the final walk-through is presented to customers solely as a time when they can look for problems they want fixed before closing. To be sure, it's important to identify problem spots, but if that's all you do, you're missing a big opportunity to build future satisfaction. Make it a time to show new homeowners all the great features, such as appliances, central vacuuming, or whole-house speakers, and how to use them so they'll get the maximum enjoyment and value from their new home.

Houston-based Allegro Builders takes this concept to the next level. Working with its appliance partner, Viking, Allegro gives its buyers an evening with a Viking chef, who will prepare a meal in their home and demonstrate their new kitchen appliances.

9 Make move-in an event. Football players know how to celebrate a big win. Similarly, closing and move-in should be an exciting, joyful event that goes far beyond a handshake and handing over a set of keys.

Make it a day your new homeowners will never forget. William Lyon Home literally rolls out a red carpet at move-in as part of its “The Customer is King” marketing effort. The builder also plants a sign by the door that says “Welcome to the Royal Lyon Family.” “It's a big deal,” Rae says. “We're hoping to make that memorable.”

There is an infinite number of strategies and variations home builders can try to make the day a memorable one for buyers. Among those who should be on hand to congratulate the new homeowners is a representative from the warranty service team. It's a great way to make a positive transition from sales to warranty service because those are the folks who will hold the buyer's hand for at least the next year. - P. Curry

Unsung Heroes

The construction staff at a home building company is a lot like the offensive line on a football team: all guts and very little glory. Salespeople make the big bucks and take home buyers out to lunch, while construction supers are out working in the hot sun or pouring rain. No wonder good supers are hard to find.

But many construction supers earn $60,000 to $75,000 a year with bonuses, so money alone is not the reason finding and retaining quality supers continues to be a perennial challenge. One problem is that there are not many formal training programs, so applicants who understand proper construction techniques and have the experience to manage jobsites are few and far between.

Moreover, young, bright, tech-savvy people in their 20s—the ones builders would love to hire—have lots of opportunities to work in high-technology or other professional jobs. Builders lament that they are forced to hire ineffective journeymen project supers who are slow to use new technology and don't have the people skills to interface well with today's buyers.

TRADES KNOW: Your subs are on the front line every day, so lean on them for ideas on how to improve your construction processes.

If you want employees who can manage projects effectively, make it clear that the people you hire are expected to learn the latest Web-based technologies and work cooperatively with all other parts of the business. This may require some extra technology and customer service training on your part, but you'll develop a better team.

By taking the time to train its staff, Gemcraft Homes in Forest Hill, Md., put a system in place that opens up better lines of communication with all parties in the process right from the start. At an initial meeting with the home buyer, salesperson, and project super, the buyer is given the super's business card and is told that it's company policy for supers to check their voice mail twice a day. “We tell our customers that our policy is for the super to get back to you within 24 hours,” says Brett Welsh, Gemcraft's vice president and regional manager.

The builder also sets up a meeting with the home buyer and super prior to the drywall going up to make sure no other changes are needed before the drywall and finish phase continue.

Builders looking to create effective teams should consider these five tips:

1 Require assessment tests. Don't be fooled by the number of years a super lists on his résumé. Before you bring a new person on to one of your jobsites, require them to take a test for competency and literacy in functional construction techniques. The test should cover topics ranging from building foundations to framing and on to finish carpentry. Follow up with assessments and reviews after 30 days, 90 days, and at the six-month mark. You may find that some people know about foundations and framing, but they are less skilled on the finish portion of construction. Find out their weakness and assign them to a mentor who has the specific subject knowledge the person lacks.

2 Teach your supers how to properly walk a house during construction. Consultant Steve McGee of Unify International says home builders don't like to admit it, but they were so busy during the housing boom that too many of their project supers never learned how to compile something as fundamental as a punch list. The average super typically uses his cell phone to ring the painter or the drywall contractor 20 or 25 times each to talk about everything from a schedule mix-up to a product change. This is a waste of everyone's time and will lead to tasks slipping through the cracks. Have your supers consolidate all the items on to a single punch list, then have them phone, fax, or e-mail the information to the subs.

Another big problem, says the Sharrow Group's Bill Carpitella, is that when supers walk a house during construction they tend to look for whether or not a particular trade showed up rather than look to see if the work is being done correctly. Too often the supers were never trained on what to look for. For example, during framing teach them to see if the 2x6s and 2x4s were seamed and caulked correctly. Construction defects can only be prevented when you have supers who know what they are doing walking your homes.

3 Think creatively. During the downturn this past year, builders pushed subs hard to keep their prices down. The Dragas Cos. in Virginia Beach, Va., found that one way to keep costs down without continuing to haggle with its suppliers and subs is to push some of the cleanup work back on the subs—they are now accountable for trash cleanup.

Dragas has also consolidated some of the jobs during the interior finish phase. In the past, the builder would have a separate dry-wall team, cleanup person, caulking applicator, and painter. Now, the builder requires its drywall people to do the cleanup work in the bathrooms and around the windows. This saves having to send in a separate cleaning person to prep those areas for caulking. The builder also has the painter caulk the bathroom and windows, which eliminates the need for a separate caulking person. Because the painter typically caulks the interior trim and doors, it just makes sense to add the extra caulking to his responsibilities. Dragas estimates that the new system saves about $70 per house.

4 Listen to your trades. Some of the best ideas for making your construction processes more efficient will come from your subcontractors. For example, for years, Venture Homes in the Atlanta area had been assessing subs based on when they arrived at the jobsite. The subs insisted that a better gauge of their performance would be to measure when the jobs were actually finished.

Venture finally recognized that the subs were right—just because subs showed up on time didn't mean that the jobs were getting completed on time. Management crunched some numbers and found that the company's completed on-time rate was not improving, so it decided to make the switch to measuring subs based on when the job was completed. For the first quarter of 2007, the completed on-time rates ran about 65 percent. By mid-May, the company was up around 96 percent.

While it's true that part of the reason Venture's completed on-time numbers are so high this year is that production is down to about 160 jobs from 240, the subtle shift in how it measures subs is a good example of how the builder used a sub's idea and was able to take advantage of the downturn to improve its processes. Better to tweak your company's processes now, so when business picks up the improvement will be in place and all the important players will have adjusted to the change.

5 Roll out a Web-based trade portal. Builders need to take advantage of the Web as a communications tool. This is as fundamental as good, clean blocking is to offensive linemen. The Web makes it easy to post information. It's no longer necessary to have a back-office person faxing documents or compiling them and sending them out via expensive couriers.

Gemcraft Homes posts the lion's share of its documents online, from production schedules, permits, site plans, and cabinet drawings to purchase orders, variance purchase orders, and payment information for its subcontractors.

Tell your subs that the company has made a decision to conduct as much business as possible online. If they balk, point out where they can find deals on computers, or if possible, offer to pay for a first computer. Many builders also offer half-day or full-day classes that teach the basics of how to use Microsoft Office applications, e-mail, and Web browsers. The trick is to be firm without putting the subs you want to keep on the defensive.

While there's always an old-fashioned sub who refuses to learn new systems, most of your subs will agree to learn computer skills and Web-based applications, especially if you make it clear that they have to modernize if they want to continue doing business with your company. - S. Zurier

Avoid Penalities

The best defense is a good offense. warranty service should be prompt and proactive.

If you want to win the game of repeat and referral business, there is no question that it is won and lost on warranty service. Customer satisfaction hinges heavily on response time to warranty service calls and whether the repair corrected the problem. But builders that truly are committed to creating customers for life don't sit on the bench. They're involved with the homeowners on an on-going basis instead of waiting for a call requesting service.

“We don't end a relationship because we closed a home,” says Cherie Fay, manager of organization development at Holiday Builders in Melbourne, Fla. “It starts a relationship we want to continue forever that is good for our homeowners and our company. Part of our mission statement is to exceed customer satisfaction through outstanding customer service. We want to live it.”

Here are nine tips for building a stellar customer service program:

EASY SCHEDULING: Boost customer satisfaction by making it simple for homeowners to report concerns and schedule appointments. If the problem requires a second visit, schedule it promptly at a time that's convenient for the homeowner.

1 Extend the warranty period. While many builders have a one-year warranty, Holiday has extended its warranty to two years. Centex Homes also has a two-year “Fit and Finish” warranty that comes standard with every home, as well as a 10-year structural warranty. “We have customers who call us after 10 years,” says Judy Easthom, director of customer relations for Centex's Dallas-Fort Worth division. “There are a lot of times when customers call, and they know their issue is out of warranty, but they know that we can guide them to take care of the repair.”

2 Introduce buyers to the customer service team before closing. At Centex, customers receive a business card for their customer care coordinator at walk-through, so they know who to contact for warranty service. “As soon as they close, they get a handwritten card,” Easthom says.

3 Set the proper expectations for the home's performance. Houses are complex products with thousands of components. You'll avoid a host of warranty issues just by educating your buyers about what's normal and what's not.

Granite countertops are probably going to have some variation in the color throughout the slab. Concrete foundations, porches, and garage floors will have small cracks in them. Those are to be expected and aren't a sign of defective construction.

Tom McNulty, a Cumberland, R.I.–based builder, gives each of his buyers a manual after closing that not only tells them how to establish the various utilities, but also lays out what to expect from various materials and explains the acceptable tolerances for them. The manual also includes troubleshooting tips “because some people enjoy doing it themselves at this point,” McNulty says. And, of course, it includes contact information for service calls.

4 Touch base two weeks after move-in. That's a reasonable amount of time for the buyer to unpack most of the boxes and get settled in. At Centex, the field manager stops by within two weeks of move-in, “just so if they have any questions or have any needs, we can take care of those then,” Easthom says. The company also visits again after seven months to give owners a chance to live in the house through a change of seasons.

At Newport Beach, Calif.–based William Lyon Homes, the division director of warranty service sends a letter two weeks after closing and follows that up with a visit to the homeowner 30 days after closing. “The warranty reps stop by the home, not because [the homeowner] asked us to, but just to check in and offer paint touch-ups,” says Rae, director of sales and marketing for the Inland Empire region. “That's been really successful.”

5 Make it easy to submit service requests—and respond promptly. This is where the rubber hits the road for most homeowners after they close on a house, and it's where they tend to be very vocal on customer satisfaction surveys. If they don't have to jump through hoops to get a leaky faucet repaired, they're likely to refer you to friends and family who are in the market for a house. If it's a hassle for customers or you respond at a snail's pace, you may end up spending a tremendous amount of time, energy, and money trying to undo the damage done to your reputation by putting them off.

The process for submitting warranty service requests should be simple and convenient—via phone, Internet, or fax—and there shouldn't be an excessive delay in your response. Ideally, a customer service representative should be available to respond immediately—and builders need a process to handle emergencies, such as burst pipes or leaking roofs. For routine warranty service, owners shouldn't be waiting more than a day to schedule an appointment.

6 Make sure service technicians are courteous. The No. 1 complaint of homeowners about warranty work is that the technician didn't show up when he was supposed to and he didn't call to say he would be delayed. The importance of showing up on time or calling if there is a delay can't be overstated. Once in the home, it's equally important to be professional and polite.

“When you go into a person's home, you're invading their privacy,” Easthom notes. Require technicians to dress in a neat, clean, company-branded shirt and be well-groomed. Have them remove their shoes or put on shoe covers when entering the home. Have them take a mat or clean towel to put their tool box on and make sure they bring a towel to wipe their hands with before leaving.

7 Hold individuals accountable for their performance. There's an old saying that what gets measured gets done. You need a process to track warranty requests and the outcome. Holiday Builders recently installed a system that makes the person who opened a warranty request responsible for it until it is closed and the customer is satisfied. “Our goal with warranty and any customer concerns is immediate follow-through,” Holiday's Fay says. “That is one of the areas that is a priority for our homeowners. We're contacting the homeowners to make sure they're satisfied with the warranty work prior to closing out the ticket.”

The process is virtually identical at Centex, Easthom says. Just because a technician says the work has been done doesn't mean the job is finished. After the service call, the homeowners get a call to make sure they're happy with the results.

8 Provide regular maintenance tips. At Centex, any customer who provides an e-mail address will receive a message four months after move-in with home-care tips and maintenance reminders, such as when to change their air-conditioning filters. Plus, the division's Web site offers a home-care guide with frequently asked questions homeowners can check. For example, the section on heating and air conditioning will tell them that during extreme summer heat, the air conditioner should maintain a 20-degree difference from the outside temperature.

9 Survey buyers on customer satisfaction. Surveys provide invaluable feedback on what you're doing right—and what needs fixing. The key is to make them fast and easy to complete. Holiday Builders used to send out a paper survey; it was six to seven pages. “It was a very cumbersome survey and it asked for way more information than we needed,” Fay says. The builder knocked that down to a two-page phone survey.

Now, at 60 days after closing, bilingual customer service manager Rolando Garcia calls each homeowner. “It's a lot more personal,” Fay says. “It also allows us to find out if there are problems and allows us to make sure we're communicating with people. Many of our families are bilingual. Previously, they would have gotten a written survey in English. The feedback we've gotten has been incredibly successful. We're able to see gaps so we can take care of individual issues and see the big picture.” - P. Curry