Estes Builders

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Estes Builders is a custom builder in Sequim, Wash. The company built 26 homes in 2003, 29 in 2004 and projects to do 33 in 2005. Estes does 50% of its business custom building on client lots and 50% building on its own lots. With only nine employees, Estes managed to utilize ideas practiced by larger companies with amazing results, winning a Silver NHQ Award in 2004. Kevin Estes is the president of Estes Builders.

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Small Has Its Advantages

We're in rural Washington state, which is a very small market. The city issued 120 permits, so we're a big fish, but in a little, tiny town. There are two advantages of being a small builder. One is that you're incredibly agile. Two, you also have an opportunity to forge really close relationships with your trades, with your staff and your homeowners.

Even though we're a small organization, we use teams to develop all of our processes. Basically, our group of nine people has built our company. What the team has built so far is fairly impressive. We have a [more than] 95% customer satisfaction rate. All of our trades agreed that we're the best to work with and, relative to our size, we're generating a lot of revenue - over $1 million per full-time employee. However, our team doesn't really measure success strictly on profits and revenue alone. Where we align well with the NHQ program is that we really do take the balanced approach: we're looking to be successful with our staff, our homeowners and our trades.

There are three really unique things [about us] relative to other companies our size:

• We don't have a real innovative president, so we do a lot of copying! We adapt a lot of best practices from other companies.
• We're also a very system-driven company. Even though we're a little guy, we still rely on systems to do our daily repetitive tasks.
• Finally, we are passionate about improvement. We are hardwired to always get better every single day.

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Systems Management

I see a lot of companies winging everything, including the repetitive-type tasks, and I see that as a huge waste of time and resources. The biggest opportunity for small builders is to get organized and become a system-driven company. The good news is that you don't have to have really complicated systems. Utilizing your agility and close relationships, you can have pretty average systems and produce some pretty phenomenal results.

We have systems for how to manage our time, the preparation of job documents, reviewing plans before we release them to construction - all the way down to having systems to run an inbox. That's how anal I am about this. Are any of these systems the best in the industry? Absolutely not. In fact it's impossible to even expect that. But, again, when you combine just an average system with agility and close relationships, you can have some tremendous results.

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No Surprises

We felt that we really needed to have good communication with our customer, which mostly means no surprises. We have checklists and systems in place [to insure] this happens with every single customer in every single home.

With each of our customers, we produce what's called a client profile. It's a simple document that goes to all of our staff, telling them what's the best way to communicate with our customer. Do they like e-mail or do they prefer a phone call? What is the best time to contact them? The simple things. But it goes a little bit further and identifies exactly what the customer was concerned about and also their style of communication. So as we go along building the customer's job and we notice that their style of communication changes, all of our staff knows that this might be a sign of a possible concerned customer.

We focus on what they're interested in. If they're really concerned about their schedule, we identify that. If they're really excited about the cabinets that they selected, we share their excitement. We publish that. And if they have some pet peeves - say if they're really against smoking on the job - we make sure that that doesn't happen.

We also do a weekly schedule update - it's just calling our customer and letting them know what's going to happen next week. Again, keeping surprises to a minimum. What we're going to do is tell them what's going to happen next week and, in some cases, what's not going to happen.

We have a system in place where, every two weeks, we uplink job progress photos to our Web site so that our customers can take a look at those. We have scheduled meetings and we're talking about things like cabinets and how the doors are going to be crooked until the carpenter actually adjusts the hinges, so they don't have a problem when they see crooked doors. They understand that by the next meeting, they are going to be level.

One of the more popular methods out there to reduce surprises is to publish a homeowner's manual. The homeowner's manual is usually a pretty thick binder. The first section talks about things like how a construction draw works, what a lien notice is from a supplier, how and when to order your cable TV, etc. That's all really good information, but what we found out is when you set the binder down, their eyes kind of glaze over and they don't read it. Or, if they do, they'll still forget to order their cable TV four months later. So we broke the first section of our homeowner's manual up into 17 pieces, and we tied all of them to the progress of the job. When it's time to order their cable TV, a letter goes out. When they receive that letter, they can order it right away.

The neat thing about striking up 17 times is that you get to ask for a referral every single time. The important part, too, is that throughout your relationship with the customer, they understand that referral business is important to you. You reinforce that.

"The neat thing about striking up 17 times is that you get to ask for a referral every single time. The important part, too, is that throughout your relationship with the customer, they understand that referral business is important to you. You reinforce that." - Kevin Estes

The other thing we thought was most important was influencing our customers' expectations. We have a 98% zero-known-defect delivery - 98% of the time we deliver without a single defect. But we're not telling our customer that. In fact, we have a scheduled dialogue on one of our checklists, a system where we tell the customer that they should be pleased if they find four or five defects in their home when they move in. So, when we have the rare exception that when we deliver a home with a defect, they're still pleased.

The other is getting credit for what you already do well. We felt it was important to tell our customers: "We have well-run jobs. They're on time and they're running smoothly." I think some of our customers thought, "Boy, this town, they got the sharpest trades around. There must be something in the water cause they keep showing up on time. And they have everything they need to do their work." Well, there are a lot of things that were causing our jobs to run smooth and it wasn't in the water. It was all the systems that we have in place.

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Do the Unexpected

There are a few things we do to go the extra mile, or do what we call "the unexpected." Nobody asks us to do this. And there's nothing really hard here or expensive about them. I'm cheap anyway! We have a $120 per house limit.

The closest major city is Seattle. We have about four stoplights in our town and - I'm not kidding - about 30 latte stands, so latte is really important where we are. We have a system in place where construction assistants place certificates for a free latte on our clients' neighbors' house to let them know that if we cause any disruption, we apologize. It's amazing how your customer will hear about that.

There are simple things like celebrating in the middle [of construction]. We send a box of balloons and congratulations - "We're trucking along."

We provide key delivery. We have a keypad entry for the overhead door - we have a system in place where we give that to them and install it.

"A common comment from customers has been, 'What do you guys do, sit around and think of nice things to do for us?' Well, the answer is: 'Yeah, we do.'" - Kevin Estes

One important little thing - we actually install the toilet paper. I know it's small, but it's the one thing that's packed on the first day, and when those little crises come up for your customer, it's good to know that you came through.

We have a move in gift bag. It has a picture hanging kit, paper towels, a box opener, Kleenex, hand soap and some Lifesavers. We have a checklist to make sure that we've included all of this.

We also send out a notice to change their smoke detectors. We also have a system where we send the batteries. I mean, why not?

A service call is another great opportunity to go the extra mile. Again, we have a system in place where after we go out and take care of the door that they called about, we go ahead and check the windows to see if they're still working properly. We lubricate them. We go through and check the smoke detectors. We check the washing machine discharge - that's something the customer installed. We put a 3-cent tie strap on that. The expensive part was getting your person out there. This five or 10 minutes worth of stuff to do that puts icing on the cake is really, really inexpensive.

A common comment from customers has been, "What do you guys do, sit around and think of nice things to do for us?" Well, the answer is yeah. We do. At this point you done all the hard stuff, you've built the home. Why not put a little icing on the cake? It really does go a long way.

What has this done for us? For about the last two or three years we've had a 95% customer satisfaction rate. About 10% of the time our customers were writing a positive endorsement. They take the time to do that. Last year, 73% of our customers took the time to write a note about their experience of building a home with us. We call those folks our raving fans. They're going to be advertising for us. We have solidified our referral business and we won excellence in class in our 2004 NRS homeowner satisfaction award.

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Visit the Estes Builders Web site at www.estesbuilders.com

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