Many custom builders are facing the same problem today: fewer customers who want to build custom homes. In the face of market challenges, how do you maintain the strong margins I identified in my benchmarking article (“Hitting the Mark,” March 2008, page 28)? After talking with many custom builders throughout the country, I realized those who were successful despite market conditions share a key understanding. They had a precise knowledge of their company's mission, vision, and core values. My challenge to you is to develop that same knowledge. These questions will help you get started:

  • What business are you in?
  • What makes your company different from other custom builders in your market?
  • Why would customers select your company to build their custom home?
  • Why would an employee or trade contractor want to work for your company?
  • Describe your company as you would like others in the community to describe it.

Once you have answers to these hard questions, I urge you to ask the same questions of all of your team members (employees, key trade contractors, outside professional advisors, and customers). If you are like most custom builders you will not get the same responses from everyone and many of them will differ from yours. The answers to these questions are the foundation of who you are professionally and what your company is all about. It is extremely important, especially in today's housing slowdown, that every member of your team understands and agrees about what makes your company different.

Mission Statement

Armed with the answer to these questions the team can begin to develop the company mission statement and core values. Mission statements generally state what the company does, who it serves, and what makes it special. I find that one of the best ways to develop the mission statement is to get your team together and have every member identify one word that describes your company. A company's mission statement can then easily be developed by turning those words into sentences. Here are a few examples:

  • ABC Builders creates handcrafted homes for the discerning buyer. We achieve this through the hard work of the most experienced employees in the industry. ABC Builders has been building these homes in our community since 1980 and will maintain this formula for success to ensure our customers have someone to rely on when they are ready for their next home.
  • Smith Custom is a team of caring professionals committed to providing exceptional service and craftsmanship. We take pride in everything we do before, during, and long after the home building decision.
  • Custom Design/Build is a progressive building company with a highly qualified team dedicated to guiding our clients through a positive building experience and creating lasting relationships.
  • Johnson Builders strives to design and build superior homes of lasting value with attention to detail, craftsmanship, and innovation. Our systemized approach and accessibility provide an enjoyable experience.

Core Values

The next step is to expand upon your mission and identify your company's overall philosophy, objectives, and core values. These statements should be embodied within the mission statement. For example:

At ABC Builders we believe in:

  • Service to clients through the highest degree of professional competence and personal caring.
  • Orderly growth through advanced planning and internal control.
  • Communication of philosophy through actions and advertising.
  • Integrity through maintaining the highest standards of ethical conduct in every decision and transaction.
  • Caring for our customers, team members, and their families.
  • Supporting the community.
  • A strong value system.
  • Making a fair return on our investment.
  • Treating people with honesty, integrity, and fairness.
  • Striving for a fair profit for a job well done.
  • Maintaining open lines of communication with our entire team.
  • Utilizing systems as a key to success.

The next step is to gain an understanding of your competitors. List competing companies and answer the following questions for each one: What is its mission statement and/or company goals? What was its average sales price within each community? What is it known for within your market? What does it do better than you? What do you do better than your competitor? How do/can you differentiate yourself from this competitor? Armed with this information you can increase your share of a shrinking market by showing your prospects how and why you are different. Following are some marketing programs that custom builders have used to increase their market share:

  • ABC Builders (creates handcrafted home for the discerning buyer) realized that their buyers regularly attend the local theater. This company became an advertising sponsor in the theater program and even hosted an event at a home they built for one of the group's board members.
  • Smith Custom (a team of caring professionals) shows their care by giving back to the community in which they are building by organizing a community environmental clean-up drive as well as organizing the construction of a Habitat for Humanity home.
  • Custom Design/Build (a progressive builder) uses their Web site to highlight how they are using technology to guide clients through a positive building experience. The company also sends a weekly educational e-mail to its clients and prospects. All of their marketing collateral is geared toward driving prospects to their Web site.
  • Johnson Builders (systemized approach) hosts monthly educational seminars describing the design/build process and focuses on its systems and how it makes the process of building a custom home fun. At each seminar a client comes in to talk about his or her experiences.

Understanding why you are different puts you well on your way toward surviving—and thriving—during today's housing downturn and beyond.