ProSales: How do you learn about new products, and how do you try them out before offering them to a client?
Handman: I tend to look at new products with a great deal of skepticism, because we always get left holding the bag if they fail. If the architect has a good experience with it, we’ll go with that, but we won’t if the only recommendation is coming from the supplier or manufacturer.
Dixon: We want to make the customer happy, but if it’s a new product or we are unfamiliar with it, I don’t care if it has a 50-year warranty, I won’t cover it. I’ll tell a customer that we’ll do it but that I have some concerns, and I’ll write into the contract that they’ll have to deal directly with the manufacturer if there are any problems. I also trust my lumberyard to warn me off of a new product or material instead of trying to sell me just to get a free trip somewhere.
Wodehouse: I use the Internet as a research tool. A lot of times, a supplier wants us to try a new product, but it hasn’t been tested or proven in this market [climate conditions]. I look for case studies and a track record in this climate before I go with anything new.
Hollub: We prefer to use new products that we learn about through our suppliers or the HBA on our spec houses, instead of on a custom house to get over any learning curve. We learn a lot and rely on our suppliers to bring new products to our attention. I know they’re doing it to sell us, but without that [conduit], we would not know about new products.
FYI: Custom builders are more likely than large-volume builders to use “innovative” products as a point of distinction during the soft housing market conditions, according to the NAHB Research Center report. They also are more likely to purchase new products from suppliers that offer design centers, home buyer referrals, consumer-focused product information, and online product information and purchasing options–and are more likely to discuss using new products with their subcontractors.
ProSales: How are you leveraging technology, including the ability to purchase materials and products online from your vendors?
Hollub: We manage orders of products and materials via e-mail, which creates a paperless trail that’s easier to track than faxes. Our next technology step is to create a Web-based program that lets our homeowners track the progress of a job, which will also serve as a double-check of our production schedules.
Wodehouse: We have laptops for all of our superintendents that connect to our project management system in the office, and we also send photos to the design team via e-mail. None of our suppliers has encouraged us or made available any online services yet.
Dixon: We use digital photos, usually with cell phones, to help our subs and superintendents communicate more effectively, and we send our clients digital photos on the progress of their jobs. We’re not super high tech; we follow what our clients ask of us, in that respect.
Handman: We have personal computers on the jobsites of our larger projects, so that the superintendents have greater access to information and the schedule. With suppliers, we do a lot of communication and ordering via e-mail, though we still use the fax machine with our lumber supplier. We also use the Internet to find subs and suppliers when we have work outside of our market.
FYI: While 90% of the nation’s largest dealers report maintaining a company Web site, only about a third offer electronic data interchange, customer account access, or online invoicing, payment, inventory and pricing, order tracking, or purchase orders. 71% spent less than 0.5% of their total revenues on information technology and services in 2007, all of which makes it difficult for builders of any size and type to engage suppliers electronically. That being said, custom builders surveyed by the NAHB Research Center are far less likely to engage in business technology than their larger-volume brethren, and only about 6% use vendor relationship-management software.
–Rich Binsacca is a contributing editor to ProSales.
