George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

March 22, 2013

Responses to the New Normal; & Where’s NPS These Days?

Filed under: Uncategorized — George Allen @ 5:21 am

Blog # 238 Copyright 2013 24 March 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Is There a Pattern Here? First; Responses to Blog # 237, & then….
I.
Responses to ‘The New Normal = 50,000 new homes per year?’!
“Great blog! I think you are right on target; especially your comments on some of the big asset class entities. The public ones (REITs) are only in the game for the short term results. This mirrors most corporate strategy these last few years. I think you pointed out in prior blogs, that 85% of land lease lifestyle communities are owned by small owners. Were they long term investors, or the quick buck and disappear types, all too prevalent today? The real question, in my opinion, is how do we get back to the long term investor model and get rid of the fast buck guys? P.S. Thanks for letting me vent.” GS (Lightly edited. GFA)

Response from GFA: Here’s an example of why it’s important to be careful with generalities. Truth of the matter is, during the past two decades, there’ve been six land lease lifestyle community – focused real estate investment trusts or REITs. UMH Properties (formerly United Mobile Homes) has been around since the mid – 1980s and is ‘going strong’, acquiring more LLLCommunities during the past two years than at any other time in its’ 30+/- year history. ELS, Inc. (formerly MHC, Inc.), Sam Zell’s REIT, has been around since 1994, or nearly 20 years; same with Sun Communities, Inc. The only short – lived REITs were Chateau Communities, Inc. (from 1994 – 2002), American Landlease. Inc. (Now part of the Green Courte property portfolio) from 1998 – 2008; and, ARC, Inc., just 2004 & 2005. This information from the 24th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLLCommunity Owners/operators Throughout North America!’. This seminal report is available FREE, with a paid subscription to the Allen Letter professional journal, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764
&

“Ah, those ‘(four) elephants in the room’ are controlling (our industry and destiny), not the consumer and home provider. We have lost what we had in 1969 – 72, George. The market, back then, determined the viability (of our housing product). Not gubment and not associations.” NB
Ah, but as an industry, we squandered that Golden Opportunity, when cheap imitations of mobile homes fell apart while being transported down highways, forcing the U.S. government to step in, when we couldn’t or wouldn’t police ourselves, ‘giving us’ the infamous HUD Code in 1974, implemented in 1976. But to our industry’s credit, during the next 20 years, we made that ‘lemon (of regulatory oversight) into lemonade (with increasingly homelike structures)’, and turned this pre – emptive, performance – based, Federal building code to our favor, until the turn of this century; when everyone in the MHBusiness today knows, ‘the rest of that sorry $ story.’

II.
‘Net Promoter Scores’ No More & ‘Dealers Be Damned!’
Remember the hype from a couple years ago, at the annual MHCongress and elsewhere, when something called NPS or Net Promoter Score was all the rage? I sure do. My first brush with the concept came as I visited a HUD – Code manufactured housing plant, and was given a copy of Fred Reichheld’s book, titled ULTIMAE QUESTION, ‘Driving Good Profits and True Growth’ – Introducing NPS (&) How leading firms transform ordinary customers into promoters. At the time, that book was required reading by all employees, from the top down. And I well remember being impressed, by the book content, as well as the corporate commitment to NPS on the part of this major home producer.
Next brush with NPS came with the knowledge at least one of the largest portfolio owners/operators of land lease lifestyle communities, had also bought into the Net Provider Score concept; hook, line and sinker. And for awhile I guess they did. But do you ever hear about NPS anymore? Only when a freelance management consultant wants to pitch it.
Just what is/was NPS all about? Well, here’s my take on the subject, after having read the book and observed, from afar, at least two large companies’ attempts to implement and sustain the NPS program.
• “Companies need to ask just one question – the Ultimate Question – in a regular systematic, and timely fashion.” P.x. Then, track and publicize the answers to that question, put the information to work right away. Therein lies the pat to true growth.

• What is the Ultimate Question? “How likely is it you would recommend the company t a friend or colleague?”

• Then, “Grouping customers into three clusters: promoters, passives, and detractors, provides a simple, intuitive scheme that accurately predicts (future) customer behavior.” P.30

• An apt goal: “We are in the business of selling an experience that delights our customers.” P.155
And I guess my Ultimate Question to the HUD – Code home manufacturer and land lease lifestyle community portfolio owner/operator aficionados of the Net Promoter Score, is: ‘Are YOU succeeding in providing an experience that is delighting your homebuying and site renting customers?’
So, where is NPS today? From all indications, ‘Dead in the water’. Why do I write that? Because the emails I receive from clients and associates dealing with these two, and other NPS aficionado firms; and, recently, asking key employees where ‘they’ thought the concept is/was on their firm’s corporate radar screen, so to speak.
For example, this direct quote from a recent email between a land lease lifestyle community portfolio owner/operator and an NPS – oriented(?) corporate executive: “I too regret my experience with your plant was unsatisfactory enough to cause me to look elsewhere for my next home (purchases).”Later in the same message, “I again commend you for building a very nice Community Series Home (Where I personally think our industry is headed). Just suggest you start considering LLLCommunity owners like (independent ‘street’) MHRetailers rather than wholesale buyers, recognizing ’we expect the home we buy to be the one we saw on display’; and furthermore, encourage greater quality control at your plants.” SR (Lightly edited. GFA)
Is this a universal let down, throughout the HUD – Code manufactured housing industry, or a one – off, maybe two – off happenstance? Frankly, I have no way of knowing for sure.
I had hoped to explore this matter at the upcoming MHCongress in Las Vegas, during an early morning session that was 1) ‘on’ in early October; 2) ‘off’ in January; 3) ‘on’ again, in February; and 4) ‘off’ again, earlier this month. Why? Well, that’s another story to tell sometime in the future, and it will be told.
In the meantime, however, this non – MHCongress seminar: ‘How to Market & Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities?!’ will be one of the key themes at the 22nd annual Networking Roundtable scheduled 11 – 13 September at the Indian Lakes Hilton Resort in the suburbs of Chicago. If YOU have thoughts, suggestions, ideas on ‘marketing & selling homes INTO and WITHIN LLLCommunities, that’d enrich the learning experience this Fall, make it a point to talk to me about it during the MHShow in Tunica, Mississippi this week – a group of us will be lunching together at the Hollywood Café at 11:30AM on Wednesday, 27 March. OR, talk to me before the MHCongress! Want an ‘invite’ to the Networking Roundtable? Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
And hey, if you’re still a committed NPS fan, I’d like to know it! How are you using it throughout your firm; what have been the measurable results; how long have you been on the program? And what are your Lessons Learned? Write to me GFA c/o Box # 47024, Indianapolis, IN. 46247 or email: gfa7156@aol.com

III.
Bofus does Vegas!
a unique opportunity awaits Bofus at the MHCongress next month

You going to MHI’s MHCongress in Las Vegas in mid – April? If not yet registered, but would like to participate, phone (703) 558-0678, and tell’em ‘George sent me!’. As a related aside; watch to see whether MHI , in turn, actively promotes the 22nd Networking Roundtable in Chicago, scheduled for early September. In any event, read more about what awaits Bofus in Las Vegas.
Bofus have a lot to gain if ‘ones cards are played right’ in the MH exhibit area. You see, Bofus comes to this annual event with different agendas. For example:
• Business sucks and Bofus’s in search of ways to make it better, the sooner the better, or get out of it altogether!

• What’s it going to take nationally, regionally to improve Advocacy, Research & Resources – wise, where manufactured housing and land lease lifestyle community owners/operators are concerned? Bofus wants to know!
These are but two of Bofus concerns, and there are indeed additional ones….
So, how does Bofus address these legitimate concerns? If you’ve read this closely, you already know the answer; if not, well, read next week’s blog posting for more hints and details….
IV.
TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES
If you’re a LinkedIn fan, or regular commentator, you likely came across a lively discussion on the 2013, 50 page study just released by CFED (Corporation for Enterprise Development) with the above 12 words as its’ title.
I’ll review this interesting piece of work in next week’s blog posting (#239). A hint. The conclusion suggested by the study’s title is not nearly as rosy as it reads. How so? Another hint. The study, per se, is all about realty – secured home mortgages, very little is said/written about chattel (personal property) capital sources and loan performance. But a ‘way’ is suggested that, if enacted, will change the HUD – Code manufactured housing industry forever, and likely destroy the land lease lifestyle community income – producing property type as we know it today.
Can’t wait? Then google CFED and ask for access to the 2013 study with the above title.
***
George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247 (317) 346-7156

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