PRESS ROOM

Builders need to focus on internal and external technology to bolster long terms success

November 13 , 2007 (LONG BEACH, CA) In an industry predicated on brick and mortar, technology has become the key driver of differentiation for many residential home builders.

As many builders look at technologies to bolster the value of their newest homes, including the latest gadgets of convenience, residential homebuilders must also advance their own infrastructure to meet the growing demands of customer retention, risk management and effectively maneuver through the complexities of running a 21st century corporation.

“A tool like a website is obviously essential, but it is fundamentally the paint on the house. It puts a certain shine on the product but does not represent the foundation of the long-term relationship, said Steve Fabry, Master Manuals CEO speaking at the Building Industry Association of Southern California's 2007 BIS Conference in Long Beach, “What we’re talking about here is an integration of technologies that bridge risk mitigation platforms with the expansion of the customer lifecycle.”

Using the web as a delivery mechanism beyond traditional sales and marketing functions makes builders more responsive. Fabry added, “It creates a proactive and consistent channel of communication.”

Homeowners look for information and service when and how they want it, he added. “Just as email revolutionized business communication or CRM transformed the sales and service experience, technologies that integrate both internal and external needs will have a positive ripple effect throughout the enterprise.”

Web-based technologies that address such multi-lateral requirements as document management can tie seemingly disparate parts of the company together and improve organization-wide performance.

With documentation, there are several issues relevant to the success of the builder. In many states, builders are required to provide maintenance and warranty information. By combining this obligation with an interactive, online communication experience, builders help their customers understand and follow the division of responsibilities in caring for their home. This in turn, reduces service call volume and frees service reps to concentrate on higher-value customer-centric tasks.

Tangentially, it creates a culture of communication that recognizes the homeowner’s investment and anticipates their needs; both key ingredients for customer satisfaction and retention. It also establishes a level of risk management defined by the protection through affirmative defense. This legal ruling states that if a builder provides reasonable maintenance requirements, and a homeowner fails to follow them, the builder cannot be liable for their damage or failure to operate.

“Documentation is essential in the homebuilder-homeowner relationship.” Fabry commented.
Above and beyond the maintenance or warranty documents, consider the enormous amount of paper generated just to build the house: purchase agreements, soil reports, easement records, insurance certificates, maps, forensics and so on. Now consider that builders have to have the same paperwork for everyone in the community…for every community they build. That’s millions of pages.”

Keeping track of documents has always been a daunting task. According to a study done by the Gartner Group, 25% of all records are lost or destroyed over a period of five years. And considering that most CDL or warranty related lawsuits happen after Year 5, builders are often left at a disadvantage because certain documents could not be easily located if at all. In one documented case, a missing lot file cost a Top 20 Builder $400,000.

Again, automating documentation management streamlines several time-sensitive and resource-chewing tasks. An online, centralized storehouse creates a library of community-centric and home-specific information right at a builder’s fingertips. It serves as the information backbone for legal and customer service support.

However, according to Fabry, automation only works if the builder has a solid process behind it. “Automating can only make you efficient. It’s the best practices that make builders effective. And both are necessary in today’s market.”

There are two unique forces at work prompting a reevaluation of current information delivery methods. The struggling housing market puts homeowners on their guard looking for every crack, misalignment and potential defect based on performance standards. Also, these same homeowners have evolved their demand s in terms of communication.

“Customers are savvier than ever and are increasingly computer-literate. And as most homebuilders depend on repeat business and referrals, they must adapt and expand their after-sale programs based on such trends,” Fabry said.

In a market that is trending towards cost reduction, builders need to evaluate and implement technology strategies that will move beyond the flash and sizzle of and look for viable document management solutions that will reduce their exposure to risk and meet evolving customer needs.