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Today’s dealers, custom home builders and home remodelers work amid turbulent times. The waning global pandemic, resulting supply shortages and the war in Ukraine have brought rising material costs and labor shortages.
Among these external forces is research from Buildxact and The Farnsworth Group showing that many dealers are operating under misaligned assumptions about their builder customers. In some cases, there are fundamental misperceptions between what the dealer sees as a critical service and what the builder or remodeler considers of utmost importance.
Notably, research conducted by Buildxact and the Farnsworth Group found that 53% of builders and remodelers say they are open to doing their own preconstruction tasks, such as takeoffs and estimates when preparing quotes for homeowners. Buildxact/Farnsworth research also shows that dealers use about 45% of their outside sales representative’s time to perform these same preconstruction services. That’s time spent on what could be a self-service function that sales reps could be using to find new customers.
Whatever the nature of the challenge, whether externally felt from world events or internally generated from misperceptions, dealers and builders industry-wide have an opportunity to work more collaboratively to navigate the changing landscape of construction.
Finding a path to a higher level of collaboration is challenging as it requires honest self-reflection and change and the correct digital solution to get the job done. The use of newer, cloud-based software, while not fully embraced by the custom home construction industry, presents a straightforward way for dealers and builders to build long-term, collaborative relationships that serve builder needs while generating the volume of business and profits dealers need to stay competitive.
The benefits of an end-to-end SaaS-enabled platform
Fortunately, dealers and builders can easily access a new generation of cloud-based construction management software via monthly Software-as-a-Service (SaaS) subscriptions. Today, essential SaaS products offer custom home builders and remodelers access to end-to-end solutions that help with customer management, estimation, scheduling and invoicing all in one package. In some cases, modern SaaS enables builders to complete takeoffs up to 80% faster than traditional manual methods like pencil and paper.
Using collaborative SaaS tools hastens tasks and enables both the builder and their dealer to better predict future costs and profitability, which are a vital need in today’s inflationary economy. Software and technological innovation help builders understand their profitability at the beginning of a project by helping them accurately calculate and include the correct markup in their cost estimates and customer quotes.
SaaS tools can also garner greater accuracy via digital takeoff features that speed up the work while generating complete material lists. These can include item assemblies for common tasks like door installations to ensure nothing is forgotten, which is essential when material prices frequently rise before a project’s completion.
Properly designed SaaS for the custom home building industry sets the foundation for an online collaboration platform where builders can give dealers more organized and accurate information within a quote request. Dealers can respond more quickly by offering builders digital pricing information that gets integrated into the builder’s online workflow. As a result, the builder can respond to the homeowner faster with a professional, well-documented bid. As builders win more work, their dealer of choice sees top-line growth.
Another advantage is that SaaS-enabled digital platforms provide other end-to-end construction management solutions, like scheduling and invoicing, at the same low, pay-as-you-go monthly cost. These tools connect all participants 24/7 from any online location. The ability to immediately communicate in real-time is a far superior business practice to traditional sending a paper or PDF document via mail or email.
The digital platform connects the homeowner, builder and dealer in a single network of frictionless collaboration that generates robust data critical to financial planning, customer service, sales operations, inventory control and more.
Digital platforms like this are a growing trend in home and commercial construction. They bring sticky environments that grow ever more critical to all industry participants as software features improve and automate additional manual tasks.
The digitization of custom home building
Naturally, the digital network begins with the homeowner. Ideally, the builder plans and organizes projects around homeowner contacts and prospects stored online. Project estimates are quickly built using digital takeoff and material estimation tools that generate online quotes faster than outdated manual methods. The quotes are made available by the builder via client portals. The portal allows homeowners to digitally accept high-quality, highly accurate quotes that generate a profit for the builder.
Once a project is underway, the customer can also use the client portal to approve any necessary change orders. This digital interaction is not only a time saver but is what the homeowner has come to expect based on current retail experiences, such as online grocery or gift shopping.
Also, with the digital platform, when dealers share price information online with builders, a more accurate quote is delivered more quickly to the homeowner. This pricing integration allows the dealer to give the builder access to vital pricing and materials information whenever needed from anywhere with an internet connection. The builder can be confident that the shared, integrated pricing from the dealer is the most recent, accurate information. The builder can even place a material order 24/7 using their dealer’s Enterprise Resource Planning (ERP) system.
Using digital platforms frees the dealer from manually managing multiple and frequent price changes, which is time-intensive and prone to error. Using a digital platform, builders can accurately self-quote at a time most convenient to them and allows dealers to include material templates and item assemblies that ensure builders have complete estimates that increase the size of the order for the dealer.
Integrated pricing also saves time on pricing conversations. This is critical because the typical builder spends up to four hours generating a customer quote and dealers today typically send up to six emails to a builder discussing pricing alone.
Additionally, a builder usually reaches out to as many as three dealers when researching a quote that is likely to win work for the builder only about 70% of the time. By saving time, builders quote more jobs, win more work and increase total spending with their dealer of choice.
Once a project has begun, dealers then access online scheduling with builders. Dealers can use the digital platform to set up delivery prompts to ensure materials are on a job site at the right time, which correlates to significant savings when you consider builders spend up to $5,000 in late material deliveries on the average project.
The digital platform offers other ways to ensure on-time deliveries. It generates data the dealer can use to build customer insights and predictive analytics, leading to better inventory control and workforce management. As builders use the digital platform, the dealer has a window into their entire customer base’s purchase behavior and preferences. That same data set then benefits the material manufacturers who sit upstream of the dealers in the network, creating a better managed, more efficient supply chain that extends back to the homeowner.