Maintain relationships with your customers. Manage your sales reps. Sell houses faster. Avoid mistakes during production. Achieve all this through the utilization of worry-free technology. These sound like the empty promises of a snake oil salesman. And for builders who recall investing in what turned out to be useless back-office software packages, the snake oil comparison is appropriate.
Software has come a long way, and hundreds of builders nationwide are using packages that combine the functions of both customer relationship management (CRM) tools and Sales Force Automation (SFA) functionality. (There are differences between these two, but we will use CRM for simplicity's sake.) These systems are not only enhancing the customer experience, but they are also improving the performance of salespeople and, reportedly, saving the builder $500 to $1,000 per house. The potential savings alone justify builders taking a closer look at these CRM characteristics.
1. Ready out of the box
First, it is critical to look for a "ready-right-out-of-the-box" CRM system specifically designed for homebuilders. These systems will be easier to use, take no more than 40 days to implement, and require only a day for training. Saving time means builders won't pay a consultant as much, and it allows them to begin earning a return on investment sooner.
2. Garbage in, garbage out
To maximize profits, builders have to sell the house as precisely as they build it. If the sales process is not accurate, the production process cannot be accurate, and the builder loses money.
Analysis of hundreds of sales contracts reveals that nearly 50 percent had home configuration errors due to incorrect options, pricing or elevation codes. With the average error costing over $1,500 to fix, a CRM system makes sense as part of an effort to reduce errors.
The best way to avoid costly "do-overs" is to ensure the CRM system will interface, or "talk to," the production systems, therefore reducing or eliminating re-keying.
Today's CRM systems also track the relationships between different customer choices such as a lot/fit matrix, layered options, standard options by community, addenda by community, and elevation and option graphics, providing even greater accuracy.
3. Interfaces
Interfaces have the potential to dramatically reduce keying errors and implementation schedules, as well as disruption to existing business processes. Working interfaces can also ensure that implementation time can be as short as 30 days.
It is critical to look for a system with working interfaces that are already in place: Fast, Timberline, BuilderMT, Trueline, JD Edwards and Intuit. It's a good idea to avoid custom code. When a vendor says, "It can do that," custom software coding generally is required -- which means time and money for the builder.
4. To ASP or not to ASP
Application Service Provider (ASP) is a somewhat technical term for software that is sold as a service. Expected to rise dramatically over the next five years due to its low-cost/low-tech appeal, ASPs allow the homebuilder to forget managing and installing software and log on to use the application via the Internet. Due to ease of use and speed of implementation, the ASP is the best option for most production builders. Because models are supported completely by the provider, the software company, not the homebuilder, handles technical updates or changes to the system.
A typical ASP supported system will cost approximately $150 per month, per user -- a small investment compared to the large dollar savings per house. Users also have the option of cancelling the service if they choose. This enables the user to try the software without the large invested commitment.
5. Avoid "underground" software
It may seem obvious, but it's important that builders be sure the software they purchase is not supported by a here today, gone tomorrow company. An established company is more likely to stick around long enough to provide tech support.
A decent parameter is the size of the vendors installed base. Checking references can be valuable because third-party endorsements are usually credible.
Larry Fiorino is president and Matt McShane is vice president of Baltimore-based Builder1440 (www.builder1440.com). Builder1440 is an Internet-based sales and marketing system designed for homebuilders.
Aareas Interactive
888-613-2677
www.aareas.com
Allentium Software
250-491-9778
www.buildintheblack.com
Builder1440
866-462-1440
www.builder1440.com
BuilderMT
888-757-1991
www.buildermt.com
BuildTopia
866-209-3724
www.buildtopia.com
Caelix, Inc.
602-787-8600
www.buildingprophet.com
Computers for Tracts
800-523-9357
www.cftinc.com
Constellation HomeBuilder Systems Inc.
888-723-2222
www.constellationhb.com
Customer Velocity
281-383-9380
www.customervelocity.com
eCalton
772-569-4500
www.ecalton.com
FAST
888-284-8364
www.tfmg.com
Pivotal Corp.
604-699-8000
www.pivotal.com
Prosite Business Solutions
877-583-3232
www.probusinesstools.com
Sales Simplicity Software
480-892-2500
www.salessimplicity.net
SiteStream Software
800-659-5830
www.sitestream.biz
TrueLine Systems—TSC Solutions LLC
925-790-1000
www.teamtsc.com