Manufactured homes disrupt building industry with revenue operations

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There is a new nursery rhyme in the building world worth taking a moment to listen to. "Stick-built homes will break our bones, but manufactured homes may be better."

The future of the building industry is increasingly becoming manufactured. Most homes are traditionally stick built. The implementation to “digitize” or the manufactured component to this standard construction method is through the factory-assembled roof trusses, floor trusses, and sub-component all assemblies (if you’re lucky).

After installing the framing, you still would have each contractor make their way to the property to rough in electricity, plumbing, HVAC, etc. In NAHB’s 2020 Special Study for Housing Economics, results showed that 69 percent of builders use between 11 and 30 subcontractors to build the average single-family home, with the median at 22 and an average of 24 subcontractors per home.

You don't need to be an operations or accounting specialist to see how this method could be problematic for the bottom line.

Manufactured homes and home components are becoming more normalized in construction. However, technological advancements, new processes, and data-driven revenue operations adjustments require companies to step out of their comfort zone and embrace change in their operations, sales, and marketing.

What is Revenue Operations

RevOps or revenue operations aligns your marketing, sales, and operation efforts to increase company revenue. Revenue operations is about creating a single source of truth from which the business can operate, free from redundancy, lag, and friction—a business operating system. The entire goal of RevOps is to reduce friction.

Revenue Operations explicitly implemented to the built environment include technology stack alignment, so your CRM (customer relationship management software) is your company's single source of truth. From there, custom reporting of your first-party data, real-time digital dashboards, and other data integrations become possible. The underpinning of successful revenue operations begins with transparency of your processes and data.

Real-world examples of revenue operations in manufactured homes

As our “real world” is being outfitted with sensors, controllers, and data acquisition equipment – all of which lead to a “human-free interface,” the way customers react and manage expectations is also changing. This merging of the natural and digital worlds is taking over industries, especially in the hospitality sector, with apps to order your favorite coffee on the go or virtual check-ins to skip the line at your hotel’s front desk. This normalizing of a “kiosk” type interaction sets the stage for change in one of the oldest industries in human history – the construction industry.

Though we’ve come a long way since Stonehenge and a simple need for building shelter, it is no trade secret that the construction industry is slow to implement change and new technologies (Klinc et al., 2009; Klinc, Turk, & Dolenc, 2010).

Production builders of considerable size have implemented digital technologies, specifically in digitalizing business processes and back-office operations – a change accelerated by forced remote work and lockdowns. However, customer-facing methods and actual home construction have much potential to automate and disrupt how homes are built, marketed, bought, and sold.

How revenue operations optimize the building industry with manufactured homes

Modular and manufactured housing has the chance to be a massive construction industry disruptor. With the labor shortage, housing and material supply chain issues, and affordability concerns, the conditions might be right for modular / manufactured housing to take off.

Off-site manufacturing and assembly line-type construction can reduce the time it takes to frame a home by 75%, according to Ryan Marshall, the CEO of PulteGroup, America’s third-largest home construction company that acquired Innovation Construction Group. This Florida-based factory builds house wall panels, roof trusses, and floor systems in a controlled environment. The building industry’s answer to “stick-built” home production challenges is modular. Using mechanical saws and nailers creates an opportunity to build homes more precisely and do more with fewer workers.

As the transition is slowly turning in this direction, the marketing and sales side of the building industry will also be disrupted as the modular home purchasing process can embrace the digital revolution offered through revenue operations.

Optimize your construction marketing with manufactured and modular housing

Modular homes have become popular in countries like Japan and Switzerland. However, in the US, a public stigma regarding quality, longevity, and design in manufactured homes still needs to be addressed. In this area, the manufactured home industry has come a long way in optics with innovative product and selection offerings, quality studies, and educating local government officials and building code departments.

On the individual customer marketing level, the affordability of manufactured homes is the USP while still having options you would find in a custom build. Additionally, the ability to serve the home design, colors, and selection choices available with the customer in the designer's seat gives the impression of a custom home. 

Manufactured homes provide an excellent opportunity for a customer to see the options clearly and interactively, inviting confidence and a stress-free experience.

Imagine buying a seamless experience buying a home virtually. You select your preferred homesite and have a VR experience walking the site. After choosing your site, you receive the available home design options and “test” each footprint on your lot. For example, do you want the swing of the garage on the left or the right? Would a morning room extension get the sun at just the right angle? What if this backsplash was chosen with these countertops? Could you move that electric outlet here for your in-home studio office?

You could add your home site, home design, elections, and change orders to your cart. Then, a builder could program each option, show what the choices result in a virtual experience and guide the consumer to contract signing a home they designed, like a pair of custom shoes or a car online.

Why aren't these customer experiences possible with traditionally built homes? Stick-built or custom homes from scratch require change orders and critical communication between the customer, project managers, and contractors.

Your determined parameters could restrict your home selectors, and your homesite options could only display lots that fit your footprint. This type of digitalization of the processes is on the horizon, and Illumine8 is excited to be a part of bringing this new sales experience for manufactured homes into reality.

The impact of manufactured housing trends on the new home sales process

While the marketing side of manufactured homes has endless possible opportunities to go fully automated with “kiosk” like opportunities, the end goal will always be to sell the house. The power of choice paves the path to home shopper happiness, but will the closing table be a positive result?

This is where an automated and active sales relationship comes in.

Ensuring your customer is educated on their choices and having the “made-to-order” options immediately reflected in the price breakdown can help them feel empowered and fully prepared to sign on the dotted or digital line.

Celebrating the customer's choices, sharing videos of progress in the factory in a digital portal, and texting your customer in an Amazon Delivery style update can help the sales process. This is where revenue operations and digital automation shines.

Just as a home reaches milestones on the production floor, your sales relationship milestone can be automatic and even duplicated for each customer.

A shift in business models is coming for traditional home building

The primal need for and function of places to live, places to work, or infrastructure are not changing – just the technology to deliver the process is. Adding a layer of digital and manufacturing automation over the “real” still results in a house a family can call home.

Manufactured homes are primed for this model, and Illumine8 is excited to see the practices we implement for business across the built environment at the home building, marketing, and buying industry scale.

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