By: Guillermo Salazar • 02 July 2024

Builders & Trades: Owning the service fumble.

Builders & Suppliers: Owning the service fumble.

This past week, we’ve been working with some of our builders and their suppliers. With the way the market is right now, our builders are striving to be the best choice for both their suppliers and customers.Building a modern home can takes roughly 19 different trades and about 250,000 steps. So, builders take on the role of developers, marketers, salespeople, and project managers. Suppliers do most of the actual building work like framing, electrical work, and plumbing. They are experts in their fields and often handle warranty work because of how contracts are set up.A builder might build 300 homes, a similar sized trade might do the plumbing on 2,000 homes.

Why Service is Different

In the construction phase, the process is clearer: you know what you want to build, adding the steps, materials and timelines. It’s a lot of work, but there’s some predictability, repetition in tasks and projects. Service work is different, it is the opposite of building; you find out the impact of what went wrong, (ie: there is water on the floor), and then the best guess team is assigned to find out what went wrong and fix it, often this involves multiple suppliers and trades, making things complicated & expensive..In terms of experience, when a post-close problem comes up, the customer first contacts the builder. The builder then directs the service requests to the right supplier. Care coordinators and site supervisors work together to handle the service work between the supplier and the homeowner. The first piece of information is the service request, where the customer describes the problem, often with pictures or videos sent by email. This process takes time & is filled with back and forth communication on details & schedules, trying to figure out ‘what is going wrong?’ and ‘when can we coordinate fixing it?’..A persistent challenge is that the customer is the least qualified to describe the problem. Again, a crew might build 300 homes a year, the homeowner may build once a lifetime, and success is vulnerable in the source closest to the problem, the homeowner. To close the information gap often means a site supervisor has to visit the customer to understand the problem better, which adds costs, time & risk.Builders try to reduce the impact on homeowners by coordinating trade days. These are specific days agreed upon by the homeowner and builder to fix known issues. Suppliers need accurate data to do the work, but they don’t control the data; the builder does. And so begins the communications gap.

The Gap

The process becomes more complicated when the builder collects and passes information to the supplier. Warranty work is often done for free by the supplier, so any data issues from the builder can cost them money. If the customer experience is bad, the builder’s reputation suffers. Bad data means the customer has to take more time off work and gets frustrated. Everyone loses.The homeowner reports issues to the builder, who then sends these issues to the suppliers. The builder coordinates with both the supplier and the homeowner. If the issue is not well-defined, the whole experience is at risk. Since the data comes from the least qualified (the customer), the risk is high.

Who is Motivated to Solve the Problem?

This situation between builders, suppliers, and homeowners raises a key question: who is motivated to fix the problem? The builder risks a bad reputation, and the supplier faces costs from poor data quality.The solution lies in better collaboration and communication to ensure everyone is aligned and the homeowner's experience is smooth and easy. Effective solutions include better data collection methods, clearer communication channels, and stronger systems for managing service requests and warranty work.

What Happens If We Don’t Solve the Problem?

If we don't address the issues in the current process, both builders and suppliers will face significant problems. However, because of their relationship with the consumer, the builders tend to suffer the most.

The Builder’s Pains

Customer Dissatisfaction (Risk): If service issues aren't handled efficiently, homeowners will be unhappy. This dissatisfaction can lead to negative reviews and damage the builder’s reputation.
Increased Costs (Cost): Poorly managed service requests and warranty work can result in additional costs. Builders may need to send out multiple trades to fix a single issue, increasing labor costs and impacting profitability.
Reputation Damage (Risk): Consistently poor service can lead to a tarnished reputation. In the competitive home building market, a bad reputation can be difficult to overcome.

The Supplier’s Pains

Financial Losses (Cost): Suppliers often perform warranty work at no charge. If the data provided by the builder is inaccurate, suppliers may need to revisit the site multiple times, increasing their costs.
Resource Strain (Cost): Handling repeat service requests strains supplier resources, affecting their ability to take on new projects or serve other builders effectively.
Reputation Risk (Risk): Suppliers rely on positive relationships with builders. If builders are dissatisfied with their service, suppliers risk losing valuable business partnerships.

What Next?

Building a modern home requires smooth coordination among builders, suppliers, and homeowners. Builders often take on many roles to ensure success, but service and warranty work can create big challenges. Identifying and fixing issues can lead to miscommunications and inefficiencies that affect both customer experience and the reputations of builders and suppliers.Solving this gap needs effort from everyone involved. Builders need to collect and communicate data accurately, and suppliers need to push for better information and processes. The goal is to streamline interactions, reduce misunderstandings, and make sure homeowners get the best service.As we continue to work closely with our builder suppliers, we are committed to finding new solutions that improve efficiency and customer satisfaction. By fostering better collaboration and improving our service processes, we can bridge the gap and deliver great results for everyone. A well-coordinated effort will minimize costs and frustrations and build stronger, more trusted relationships with our customers.In this changing market, being proactive and adaptive is key. Together, we can turn challenges into opportunities for growth and improvement, ensuring that our builders and suppliers remain the top choice in the industry.

Our mission is to simplify the homeowners & home builders customer experience. Let Iris do the work.

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