The most important piece of software in a builder's toolkit may not be accounting or estimating.

Let's see a show of hands: After an Office Suite (word processor, spreadsheet, email), what's the most important piece of software for contractors? Estimating, accounting, and scheduling software are all important pieces of a contractor's technology tool-kit, but there's something even more fundamental that the bulk of homebuilders and remodelers ignore. Relationship management.

No, I haven't jumped ship to Dr. Phil. Maybe that's the bad news. The good news is, there is a whole category of database-backed software that allows you to collect and manage every interaction, document, and task involving anyone you work with. It's loosely termed "customer relations management" (CRM) or just "relationship management".

Every day, different people in your company interact with prospects, buyers, employees, subcontractors, suppliers, and others. Topics might include:

Where did you hear about us? How old are your kids? Your man was late to the job. Do you like Formica or Corian? Do you want a two-story or a ranch? How did our warranty technicians do? Which faucet was leaking? Can you work on Saturday? Did your dad's surgery come out OK? I'm sorry our van left marks on your driveway.

These interactions normally happen in a vacuum. CRM systems let everyone in your company who touches a contact record add their tidbits of information, which then become available to everyone else in the company who may need to see them. The sales manager can see which models a buyer has been looking at with a salesperson. The VP of construction can figure out which subcontractors are chronically late. The COO can reconstruct the conversation that caused the receptionist to quit her job. Think of it as the ultimate water-cooler conversation.

Here are a few areas where the broad category of CRM could completely transform how you do business.

• Capture and Recall of Company: Mindshare Imagine how much better your customer satisfaction and referral rates could be if the call-taker who you just hired could "remember" that Mrs. Jones was concerned about a workman tracking mud on her carpet five years ago. This time, your warranty service technician shows up with extra carpet runners and booties for his shoes!
• Community Management: If you're a production builder, you can track which lots and models are available in which communities at what price, and make that information available to all your salespeople in near-real time.
• Marketing Analysis: Wouldn't it be nice to know whether your print ads were bringing in more buyers than your TV ads or the yellow pages, instead of just guessing where to spend marketing money next year?
• Lead and Traffic Tracking: CRM will let you analyze who is coming to which open house, or who is calling about what kind of remodeling project—and then send targeted marketing materials via direct mail or email to that group only. If a husband shows up at one open house and his wife shows up at another, your salesperson will be able to make the correlation.
• Sales Management: A good CRM program will generate every form necessary to sell a project, from initial contact letters to complex sales agreements and change orders, with just a few mouse clicks.
• Incidence Tracking: It will help you accurately reconstruct what happened on a project, whether it was a few days ago, or several years after completion. Whether you're trying to defend against a mold lawsuit, or just figuring out who installed the leaky faucet, the benefits can be huge.
• Document Management: Instead of a warehouse jammed full of paper documents, you can have an electronic version of every document for every project available to anyone who needs to see them—instantly.
• Predictive Warranty Service: As buyers transition into warranty and beyond, you will be able to track and analyze which subcontractors and which products are the most unreliable, and adjust future offerings accordingly.

Hopefully this short list punctuates why CRM systems are so important for the progressive homebuilder or remodeler. Once you have the capability to capture and analyze all this information everything changes. People want to work with companies who have their act together, and when a builder or remodeler is properly using a CRM system, there is a ripple effect that is hard to quantify—but it manifests itself in better leads, more cooperative buyers, A-list subcontractors, and more.

Big companies spend millions of dollars on their CRM systems. Luckily, most builders and remodelers don't have to. There are affordable products and services available for every size company.

Small-company CRM

There are several generic packages available for small-to-midsize companies, but there are good reasons that my favorite is ACT!. Third-party ACT! developers have created a mind-numbing array of add-ins for sales and marketing, links to project scheduling, QuickBooks accounting, and more. The ACT! database is completely customizable, and can be accessed either conventionally with client software, or through a web browser (with the appropriate add-in). (www.act.com)

Homebuilder-specific programs

There are currently several very capable CRM systems aimed at homebuilders. All are web-based and are sold either as a monthly subscription, or on a per-project or per-user basis. The focus varies slightly from product to product.

BuildLinks Aimed at custom and semi-custom builders, BuildLinks focuses on capturing customer selections, interactions with the project team, and conveying the project schedule to whoever needs to see it via the web. (www.buildlinks.com)

Builder 1440, SalesSimplicity, BuildTopia Sales These three services are from different vendors, but are functionally equivalent. All are aimed squarely at production builders using a standard community/model/option database, and all can assist with customer management and pre-qualification, sales, marketing, and document management. BuildTopia scales into its own purchasing/production management solution, while B1440 and Sales Simplicity both hook to enterprise production management systems like Timberline Production Management and HomeSphere's BuildSoft Enterprise. www.builder1440.com, www.salessimplicity.net, www.buildtopia.com.

PunchList Manager Whereas the above services focus on the front end of the construction process, Service Software's PunchList Manager deals exclusively with warranty service management and tracking the performance of subcontractors and products. PunchList Manager can receive "hand-off" data from the sales and marketing systems to create an end-to-end record for a particular client. www.punchlistmanager.com.

Executive Summary

There are customer relations management systems available for every size and type of company. Their ability to capture and analyze company mindshare results in better leads, more cooperative buyers, more reliable subcontractors, and more.

Joe Stoddard is a nationally known author, lecturer, and consultant to the building industry, who teaches contractors to "Separate the Bytes from the BS" and get the most from their technology investments. For private help, contact him by e-mail at jstoddard@mountainconsulting.com.