Builders would benefit from proactively shepherding customers from contract to closing more than they would from merely focusing on gaining more sales
There are many margin killers in home building but among the most insidious are failures in what I call sales fulfillment—the process of managing the customer from signup through every option, selection, and color and on to the day of closing. Nothing makes managing a tight schedule more difficult. I have seen this firsthand with builders of all types and sizes in four countries, and it is rare to see a management team embrace the issue and resolve it.
There are myriad variables that confuse the issue of sales fulfillment but the big picture is quite simple. Whether you offer 500 options or five, whether you build in 180 days or 60, whether you have an internal design center, a contract design house, or your sales staff runs it from the model, a builder's ability to proactively manage a customer from contract through close with every option and selection made on time profoundly impacts the bottom line. As the schedule goes, so goes the builder. A disregard for decision dates always means disarray in the schedule, which translates to frustrated suppliers and trades, unhappy customers, and lost profit.
12 Steps for Solving the Sales Fulfillment Gap1. Decide what business you are in and exactly what level of options and selections you offer.2. Build systems that enable the consistent fulfillment to that level of options and selections.3. Establish the companywide goal of delighted customers at the closing table who meet every decision date for options and selections.4. Make the choice: Either (A) your salespeople are fully responsible to manage customers from contract through closing or (B) hire someone to do it for them.5. Bring sales, purchasing, and construction together and clearly, firmly agree on the cut-off dates for each option and section.6. Flowchart your schedule from project design through closing, identifying each obstacle in the way of meeting decision dates, and address those head-on.7. The role of sales management is to lead, support, and instill a discipline within salespeople and/or design center staff to complete the post-contract fulfillment process.8. Give your salespeople and/or design center staff a chance to learn the process of sales fulfillment. Those who cannot learn and practice it need to find a new home.9. Find a sales trainer who accepts that a major part of his or her job is to teach salespeople and/or design center staff that a sale without on-time fulfillment is an incomplete sale.10. Align your reward systems to support on-time fulfillment.11. Provide full support. If any member of the company team is building obstacles, tear them down.12. Check your management behavior. If you cave on decision dates, everyone caves.