A few years ago, it was just about a given that Nextel had the home builder communications market locked up. The company was such a profound force in the industry that every year at the International Builders' Show, attendees would complain that they couldn't get their calls through because so many builders were using Nextel.
Times have changed. Nextel is now Sprint Nextel, following the completion of the carrier's $71 billion merger with Sprint last year. Based on a recent Builder survey and some follow-up interviews, we've learned that although the company enjoys a relatively healthy relationship with big builders, it has some work to do among small builders, many of whom have left Nextel, for reasons described below. Only 36 percent of our 633 small-builder survey respondents (those building fewer than 300 units a year) use Nextel, and even fewer, 9 percent, use Sprint PCS (see “Smaller Market Share,” page 154). The data from our 147 big-builder respondents (those building 300 or more units a year) are much more promising for the merged carrier: Sixty-two percent of our big-builder group uses Nextel, while about 13 percent are signed up with Sprint PCS, giving Sprint Nextel 75 percent of the sample (see “Big-Builder Favorites,” page 154).
“If there was any erosion, I would think it's with the very small builder,” says Butch Musselman, vice president of industry business solutions for Sprint Nextel. “In the small-builder space, there's a tendency to go for the [simple plan],” he explains, adding that large builders want a fully integrated solution that lets users run applications such as PermitWorks, which provides live help-desk service for the permitting process, or back-office software such as BuilderMT.
Musselman has a point. Many big builders are committed to rolling out hand-held applications on Nextel phones. Charles Irsch, chief information officer of Centex Corp., views the merger as a positive step and expects to carry the strong relationship his company has had with Nextel into the future with Sprint Nextel. Irsch says Centex is using Nextel BlackBerrys for its customer-care application. As of mid-November, Centex had rolled out the application, which lets warranty service people update schedules and sign off on service calls using a BlackBerry, to about one-third of its markets.
Even on the small-builder front, Sprint Nextel is slowly winning back customers. Dan Kent, president of Kent Homes in Wilmington, N.C., says he switched from SunComm to Nextel mainly because he couldn't get BuilderMT to work with SunComm's wireless service.
Kent says his company is transitioning from being a custom builder that builds about 12 homes a year to a company that will build about 50 homes in 2006. The home builder has used Timberline accounting software for years and now is adding BuilderMT's purchasing and construction management system. Opting to run BuilderMT on a Nextel BlackBerry just made sense, because the software is optimized to run on the device.
“I never had any problem with Nextel's service. The reason I initially switched to SunComm was more of a price issue,” says Kent, who adds that he was just looking to save money on wireless voice.
Now, Kent is spending roughly $200 more per month than he did with Sun-Comm, but he believes the productivity gains with BuilderMTwill be worth the extra money. His plan is to first run BuilderMT's scheduling application on the BlackBerry, and later this year run the full complement of applications, including estimating, purchasing, bill pay, and punch lists.
SMALLER VOICES Despite the strong relationships with some of the big builders and some recent customer wins, Sprint Nextel needs to listen to some of the smaller builders who have switched carriers. Many of these builders are dissatisfied customers. Here are some examples:
Willie Kendrick is a purchasing manager with Paul Taylor Homes in Dallas. The semi-custom builder closed about 250 homes last year, with sales prices ranging from $150,000 to $500,000. Kendrick says Paul Taylor Homes switched his 13 supers and seven office managers from Nextel to Cingular almost two years ago.
Learn more about markets featured in this article: Dallas, TX.