Three companies discuss the importance of instituting design studios, cultivating relationships, and offering quality work.
Frankel Building Group: Designing the Custom Studio Experience
Something was not right with the custom homebuyer’s experience.
Scott Frankel, now a principal of Frankel Building Group, Houston, noted that clients buying a $115,000 house from the production builder he worked for right out of college picked their options from a design studio that was well lit, spacious, and stocked with plentiful options for floors, counters, and other selections. Their experience was more pleasant than that of buyers for million-dollar custom homes. Those buyers typically were corralled into a cleared-out closet in the custom builder’s office or to a garage converted into a showroom. That is, if the builder even had such a space. Otherwise, clients ran around town to numerous suppliers to make their selections.
Scott, along with his father Jim and brother Kevin, approached family friends who operate a to-the-trade home furnishings business and, in 2012, opened a design studio in the same building. Since completing an addition, the FBG Design Studio has 2,000 square feet of space featuring products from more than 60 different suppliers. At first, the builder tested the one-stop-design-shop by having new clients visit during the initial planning stage while existing customers were brought there only to finalize room selections just before construction began.
“What we thought would happen is (customers) would say it’s not custom, and they don’t want to be cornered into something,” Frankel says.
Instead, the existing customers were impressed and many said they wished the studio was available to them earlier because it would have made the design and selection process much easier. So now that Frankel has a studio with inventory, is there a temptation to push custom-home clients toward selecting those items? In order to ensure his clients get the home they want, Frankel still urges clients to go beyond the studio’s offerings and choose from suppliers anywhere in the world.
To make the studio process easy to use, the Frankels developed proprietary software that uses a bar code system and a hand-held scanner. Customers scan selections as they choose their tile, countertops, cabinets, floors, colors, and other items. The software then generates a document that can be downloaded to a tablet or projected onto a big-screen TV. Customers dictate the studio’s inventory, and the software database includes every product ever ordered for a Frankel home. So if a handful of customers select the same item, the program will flag that preference, enabling Frankel to tweak the studio’s holdings.
“Our clients have excellent taste and spend a lot of time researching what they want. If we see 10 clients pick something, we’ll approach our manufacturers to get more of that in bulk, so we can get the price down for our customer,” Frankel says.
Frankel’s latest endeavor is building luxury homes at Woodlands Reserve, a gated community in the Village of Indian Springs, The Woodlands, Texas. The company will use pier and beam construction to build LEED-certified houses on 55 lots. The builder started breaking ground in April with five custom homes under contract and plans to build six more houses on spec.
Cataldo Custom Builders: Relationship and Respect Are the Keys
Clients who want to enjoy a Cape Cod summer in their new custom home demand that it be move-in ready by the Fourth of July. That’s a tough deadline when permit delays push ground-breaking slated for the previous September into November.
Yet Cataldo Custom Builders has never been late with any of the more-than-200 seaside luxury houses that the East Falmouth, Mass., company has built along the Cape since Ralph Cataldo started the business during the mid-1980s. That feat obviously entails being ultra-organized with scheduling and staying on top of lead times and deliveries. But Cataldo’s track record also is a product of valuing relationships.
Cataldo had to win over subs and vendors to work late and on Saturdays. His ability to turn a group of people working on a project into a team striving for the same goal starts with earning their respect. He does so through actions like paying his subcontractors every Friday, making sure they can make a fair profit on his projects, and having his job site clean and materials ready so crews can get right to work. He also visits his projects at least two or three times weekly—“I don’t go there with a suit and tie,” he says—picks up a broom to sweep, carries in plywood, and gets to know the tradesmen.
“You can’t pretend you’re better than everyone else. You have to get into the trenches with the lowest guy on the totem pole, and you have to get that guy to respect you,” Cataldo says. “When you respect that what he is doing on the job is important, it pays dividends. The little guy is the one building the house; he’s the one with the good ideas. He’s the one who will go out of his way to go the extra mile for you.”
Valuing his relationships with subs, vendors, architects, and his “talented and loyal” staff makes its way up the ladder toward the buyer, leading to what he calls “clients for life.” If everyone involved in a custom-home project is happy and motivated, the client will get a better job.
“Everybody has to be on the same team or the same page. I’m responsible for making sure that happens even if it costs me,” Cataldo says. “There is tremendous value in relationships. I can’t put a dollar value to it, but it’s huge, and all these little relationships that we have with everybody on these teams is key. You have to value that.”
Customer testimonials laud Cataldo for his availability, clear communication, and delivering on what he said he was going to do. “Exceeding expectations” also is mentioned frequently in the online reviews.
Cataldo talks about being the quarterback of the team because the speed of the leader sets the speed for the team, particularly when taking on complicated projects, many of which are built on environmentally sensitive plots that are heavily scrutinized by conservationists and building code authorities. But he also states repeatedly that his company’s effectiveness is the result of working with great people who share his core values.
“We learned over the years that you have to set expectations immediately with staff and with the clients,” Cataldo says. “You can’t just meet those (clients’) expectations, you have to exceed them. There are several ways to win clients for life. You have to be consistent from the second that phone rings. You have to start with a basic relationship, make a first impression. You’ve got to start to build trust, and it takes a while to build trust. Once you get the trust, you can get the loyalty, and once you get the loyalty, you’re able to get the clients for life.”
Zbranek & Holt Custom Homes: Quality Is Merely the Price of Entry
Every elite builder promises a quality home within budget and on-time delivery. So how can any company stand out if everyone is making the same vow?
“For us, we decided to make the process easy, understandable, and more fun,” says Steve Zbranek, founder of Zbranek & Holt Custom Homes.
There are several ways the Austin, Texas-based builder delivers on the fun part—taking clients to the theater, ball games, and hosting final plan meetings on a boat with champagne. But another way the company further differentiates the client’s experience is with Co-Construct project management software, which the company modified and calls ZConnect. The system renders the planning, engineering, selections, construction, change orders, and warranty phases easier to grasp. It is so refined that clients literally don’t need to meet with the builder. Almost three-quarters of the builder’s clients—the company closes seven to 10 custom homes a year with an average price tag of $2 million—live in another city, state, or country. Zbranek & Holt recently finished a $1.8-million home for an executive living in Japan.
“We only saw him three times,” Zbranek says.
Both parties stayed in touch through the system, which pushes emails, texts, and phone calls aside as the primary communication medium. Instead, the builder posts photos, videos, and documents on ZConnect, and the client responds with questions and instructions in real time. When the client posts a change order, Zbranek & Holt responds with how much it costs. The customer can either accept or decline the order. If the change is accepted, it goes to the change order file and is immediately available via iPad and smartphone to every project manager involved with that project. The project file becomes the warranty file upon the buyer closing on the house. When the customer posts that something needs to be fixed, the builder sees the message and handles the repair. The post can only be closed when the client clicks a button indicating he or she is satisfied and closes the item.
Another factor that enhances the customer experience is that all of the company’s field project managers and project managers are graduate master builders.
“It’s like the customers get to work with the godfather of housing as their project manager. From the perspective of the building industry, that’s not usually how it goes.” Zbranek says.
Typically the newest people in the industry start as a construction superintendent. As they gain more experience, they get promoted to superintendent, project manager, and eventually either move off the field to management or start their own company. The Zbranek & Holt project managers facing the customers are senior builders with at least 25 years of experience. Some formerly ran their own companies and wanted to get out of the hustle and bustle of running a business and just wanted to build houses. Because of their experience, they are able to stay ahead of the customers and remind them about approaching tasks and decisions to be made. In order to keep that experience on board, Zbranek & Holt pays their managers well and covers the cost of their master builder education.
“I have project managers with résumés stronger than most of the builders that we compete against, and our customers like that,” Zbranek says.
Also unusual for a custom builder is having a purchasing manager focused exclusively on negotiating, buying, managing price, and expediting the delivery of products and materials to the jobs. Many custom builders split those duties with whoever handles office management, accounting, or even the owner. Having a veteran purchasing manager helps minimize delivery problems, which ultimately contributes to a better experience for the client.
“I left behind the days of bad customers, frustrated people, and unhappy phone calls and emails. If I’m at the end of a long home building career with this being the 36th year, my only wish is that I would have been able to do all this 30 years ago,” Zbranek says. CB