As it celebrates its fiftieth anniversary this year, Wausau Homes in Wisconsin has entered the first stage of executing an ambitious business plan that is dedicated to providing customers with a stress-free purchasing experience.
This new marketing and selling approach, which took 18 months to develop, essentially gives buyers more control over the customization of the home they are buying. It guarantees a firm price for that home when the contract is signed and specific dates when the house will be completed and delivered.
The long-range goal of this plan, which president Jay Schuette believes is achievable within the next 10 to 15 years, is to create enough buyer interest through its marketing and sales to grow Wausau Homes to production of 100 homes per week. (In 2009, Wausau produced 400 homes.) He also wants to create a sustainable business that he and his trade partners can pass on to future generations.
Schuette says he and his co-owner brother Tom started thinking about guiding Wausau Homes in a different direction after their father Marv died in 2007 at the age of 75. Marv had been the company’s driving force “and you didn’t want to get in his way when he was around,” recalls Jay. Wausau Homes, which began as a lumberyard, emerged in the 1970s and 1980s as one of the largest custom builders in the Midwest. Specializing in panelized and modular construction, Wausau’s annual production rose to 4,000 units at one point.
But when the housing market slipped, Schuette noticed that while Wausau Homes “had our building systems down pat,” it had strayed from being a marketing company, which he believed would be essential to its long-term viability.
The company could build a house in two to four months, but it wasn’t connecting with customers in a meaningful way. “I had to redefine the building experience,” says Schuette, which meant taking into account the “angst” that many buyers feel after they’ve purchased a home.
Working with nine different marketing consultants, Schuette made wholesale changes to his company’s website (which includes a top-quality video about the company), search engine optimization, and collateral marketing materials. He also sought to bring greater consistency to Wausau’s field operations.
Prior to launching its new business model, Wausau Homes had been working with 170 builders in several Midwestern states. Schuette offered territorial exclusivity (a first for Wausau Homes) to those builders who would agree to set up design centers (at an estimated cost of $40,000 each) and participate in a sales-training program that would teach them how to ease buyers’ stress levels. Many of its builders balked for various reasons, including those who didn’t want to sell homes under Wausau Homes’ brand. But as of Tuesday, Wausau had exclusive arrangements with 28 builders and is about to add two more to its network next week. “It’s a franchise-like system without being a franchise,” he explains.
Schuette says he now recognizes that Wausau Homes doesn’t just build and sell houses anymore. “We give people the opportunity to buy.” So getting customers emotionally attached to the home they purchase is critical to the initial success of the company’s new business plan. The builders Wausau works with are trained “to ask [customers] a lot of questions about why they are in the sales office, and what kind of home they need.” Each design center (which duplicates the color scheme on Wausau’s website) offers more than 130 different house plans that buyers can customize however they like. Buyers can also design their homes from scratch.
The design centers include what Schuette calls “dream areas,” where customers can view 3-D versions of all of the models and the changes they request. The software allows owners to place images of their furniture, their cars, and even themselves inside of the house plan.
All told, Wausau Homes has spent more than $1 million on its reinvention and repositioning for the future. In the process, it has closed eight satellite manufacturing plants, leaving it with one facility on six acres. As for growth, Schuette says he’s seeking entrepreneurial builders who can aggressively drive sales. For a builder to receive territorial exclusivity from Wausau Homes, it has to be building a minimum of 15 homes a year. The territories that Schuette chooses typically have between 200 and 300 housing starts per year, and he expects his builders to eventually capture at least 10% share of their markets’ starts. (For images of Wausau Homes’ houses, go to www.wausauhomes.com/photo-gallery.)
Schuette won’t say exactly where he’s like to expand, except that he will concentrate on Wisconsin, Iowa, Minnesota, and Illinois, and he wants any new market to be within 350 miles of Wausau’s headquarters. Schuette has identified 2,400 markets within that radius. “Last year, there were 141,000 housing starts in the Midwest," he says. "If we could eventually get 10% of those I’d be happy.”
John Caulfield is senior editor for BUILDER magazine.