198. Understanding Today's Client With Bob Cain

Welcome to another episode of Professional Builder Secrets. We recorded this episode live at the International Builders show in Las Vegas, but the content is still highly relevant for builders. Today I interview Bob Kane, who's the business unit leader at Build Tools, and we talk about what you need to know to meet and exceed client expectations. We discuss how to structure your first appointment to stand out from your competitors, the key expectations modern clients have around communication and organization, and how to effectively manage change orders while keeping your clients happy. Enjoy the episode.

If you have a good system in place that can manage change orders, it can be profitable. You have to be upfront with your with your customer and you have to say, any change could delay this project. But we really need to nail down what our cost is and that cost that we nail down through bidding or however we do it, that needs to go back into our budget. We now have a budget that now is what we started with and now we now have the change order cost as well. So we can add those two together to understand what our revised budget is today. As a builder, we always need to keep our eye on that, so change orders is the biggest risk. My recommendation to builders would be get a system in place where you can manage it. Don't let things fall through the cracks. That's an area that will eat away at your profit and surprise you at the end.

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Professional Builder Secrets live. We're on on air again and we've got Bob Kane from ECI Build Tools. Bob, welcome to the show.

Thanks for having me.

Very excited to have you on here at live at IBS 2025. Today we're talking about the client, so understanding today's client and how builders can exceed expectations essentially. But before we dive into that, can you just give a bit of a background on who you are, what your company does as well?

Sure. So I've been in the industry for a little over 26 years. I've worked with thousands of builders, builders that are custom remodeler production, worked with thousands of trade contractors and mostly it's on the consulting side of their Business, manage consulting teams to be able to go out and really improve their business, improve their lead flow through operations, through closing and quality. I work for ECI Software Solutions. We have plenty of software products for the different niche types within our industry. And so having software in place while you're helping businesses improve their operation makes a lot of sense because it reinforces those best practices. So that's pretty much what I've been focusing on.

So ACI have a lot of different softwares. How do you break that down and kind of make it simple for, say, a custom builder?

Sure, sure. So we have, we have software for all types of builders. The one, the one product that we focus on in the, in the custom builder and the remodeler space is called Build Tools. Yeah, Build Tools was built and developed by a custom builder remodeler for custom builders and remodelers, and we acquired that business in 2020. And now our job is to improve, improve the market, create value and help help those that are in that space.

Makes sense. And we can dive into this a bit more later. But just while we're talking about Build Tools, how is it, how is it different to all the other softwares that are available to builders out there for managing jobs?

So I think at the basic level, being able to know your budget ahead of time before you start is very important. Build Tools was developed by a builder that was using other products at the time, and they created Build Tools because the concept really needed to be budget first, cost first. So Bill Tools was created with that focus in mind to be able to really control costs, know those costs upfront, manage that change order process, know what your profit should be all the way through the build. So at the end of the day, it's not a surprise on how much money you're going to make. You've been planning all the way through. And if you do the correct steps and you have best practices involved, Build Tools is that tool that can help you earn that net profit that you planned in the beginning.

Okay, cool. Well, I want to come back to Build Tools a little bit more later, but let's jump across to the topic of the interview. When we were talking in our pre interview, you were talking a lot about the expectations of the client and how builders are struggling with managing that, especially in initial discovery calls and things like that. So how can builders approach that first call knowing that that person they're talking to might be speaking to multiple builders at the same time?

Yeah, I think, I think on average, I mean, the, the, the sourcing Report that came out actually, actually referenced that. It's a great report. It actually referenced that. When you're being interviewed by a client, you have to understand that that client is going to be interviewing at least two other contractors. 78% of the time the client is interviewing at least three contractors. You're one of three and you may not know that when you're going through it. They want to know that you're going to deliver in a way that is organized, timely and that you have your act together. When I talk to my customers about what helps them drive top of funnel leads and what helps them with their close ratios, some of the examples are that they actually lead with build tools, they actually lead with their organization. So an example of that would be, I have customers that actually go into these interviews with an iPad, out with build tools up, and they actually say, if you work with me, this is how the process is going to work. This is how I'm going to manage my schedule, communicate with my field as we do change orders. This is exactly what's going to happen. And here's my system that's in place. You're going to get this email where you can approve it and it's going to take us all the way to service. When I service your home, when we're done, I have this platform in place and I'm going to stay organized throughout the process. And my customers have told me when they do that, that is improve their closing ratios.

So that conversation you're talking about there, at that point, they've already qualified the client and kind of gone through an initial discovery phase of some sort or.

Sometimes yes and sometimes, sometimes no. I mean, they've gotten to, they've gotten to the point where they were, they were ready to sit down and actually entertain a contract. So they've gotten to the point where they had a rough estimate. They did have a, they did have a qualification scenario and conversation in mind. But there's still a chance. It's not right. You know, during this conversation, maybe, maybe the client doesn't want to move forward. Maybe the builder decides it's not going to be right, but they still want to lead. But the fact that they are the best, they are leading with technology because now that decision is in their hands. Now if they want to move forward and do business with that customer, they ultimately can make that decision because they have the upper hand on winning that business.

What are the expectations of the current customers in the market that are looking to build homes? How can builders understand that better to start delivering on it?

Well, I think a client wants honest and timely communication from a contractor. I think there's a lot of stories out there that when clients talk to their friends and family, they hear things that might be a little opposite of that. Maybe their previous experience may have shown things that are opposite of that. So I think today in 2025, a client that's going to do a remodel job or spend money on a design build, custom scenario, they want accurate, timely communication. They want to know that that builder is going to deliver on the expectations that are set up front and they're going to do it in reasonable timeframes and within budget.

So you kind of touched on that in that discovery call. You're demonstrating the software so that you can show that that's how you will communicate throughout the job. Is that what you're using it for?

I think that's a part of it. I think being able to tell that story that I have a plan for, for how we're going to execute your dream is important. Being able to show them that I have a system in place that's gonna run a schedule and my crew's in the field that's going to hold people accountable to do the things that you as the client need to have done. And then ultimately, I think to answer your question, there is a client portal. So being able to go to that client portal and show them, hey, this is how you're gonna see your pictures, your status updates and everything that you need to know throughout this project, this is how I'm gonna communicate to you is a very important part of that.

Can you go into more detail about what those communication points are? That I guess not necessarily that consumers expect, but what is best practice?

My understanding of best practice in this area from feedback that clients have given my customers is that clients want to be updated on a weekly basis and they want to have the ability to log into some sort of a portal to understand what's happening. And so I think that every builder should think about that. How can we collect what happened during a one week period and get that information into the hands of the clients right in their inbox? And how do we have a system in place where they can also log into a portal and have access to everything that's been going on with that project? I think if we as builders in this industry do that, we're going to create more happy clients.

Can you expand on the expectations and how they change throughout the build process?

I think that, I think that when a client makes a decision that they're going to move forward with a builder, there's a lot of excitement. I think the design phase is the honeymoon. Yeah, it's conceptual. It's the dream. I. We have a product at ECI within our division called Avid Ratings. And so that's a tool that goes out and surveys buyers when they go through this journey and many other stakeholders during the construction process and surveys in. It doesn't matter if you're in production, home building, custom home building or remodeling. The surveys are all pretty consistent. People are happy in the beginning. In the honeymoon stage. Things drop when we get into construction, especially when the house doesn't have wrapping around it yet and we don't know what we're going to, what we're going to get. At the end of the day, it jumps up a little bit before closing and it typically drops just a little bit. And then that's why it's important for builders to handle the service side of things. So I think you get, you get two loops of highs and two loops of lows. I think builders, if they can really control those loops of lows and level them out by setting expectations from that level of high, I think that's going to really help their, their NPS for their customers and help their business.

And you think that weekly communication in itself can just help that, even if it is maybe bad news at times?

I do, I do. I think no news at all is going to create disgruntled customers. Yeah, they're going to find a way to get to the job site. Someone's going to get to the job site, they're going to try to figure it out on their own, they're going to feel like they wasted their time. So I think at minimum, if we can communicate once per week on what's happening and what happened that week and give them the ability to log in somewhere to see the big picture, you're going to have much happier customers.

Another thing that you wanted to talk about today when it comes to this topic is change orders. So a lot of the, obviously every, every job has the opportunity to have change orders at some point throughout the process. How are you effectively communicating that and how are you handling those, those things?

So I think, I think that a builder without a system like build tools in place or a builder that's not taking advantage of a system to manage the change order process is at risk of, of, of profit deterioration. We call those profit detractors trying to manage change orders without good process and good technology in place. And the reason for that is, it's, it's change from the plan. And so when that happens, builders typically run into a scenario where they're going to do things for free because it's too much administrative work to track down getting paid for this. It's not worth it. Or they're going to say yes to something. They're going to collect money, but they're not going to fully bid out what that cost is going to be. And then when the invoices come in from the trade contractors or they look at the labor time cards, they realize it was a lot more expensive than they thought. So now the job takes more time and it was not as profitable as they planned. If you have a good system in place that can manage change orders, it can be profitable. You have to be upfront with your, with your customer. And you have to say any change could delay this project. You have to be upfront with that. You have to price your change orders appropriately. The time that it takes to figure these things out, plus the cost of it, change order should have a higher margin than your, than your house in general. So there's an opportunity for some profit there. But we really need to nail down what our cost is. And that cost that we nailed down through bidding or however we do it, that needs to go back into our budget so that we have, we now have a budget that now is what we started with. And now we now have the change order cost as well, so we can add those two together to understand what our revised budget is today. As a builder, we need to manage that net profit goal so that we make sure that we don't deteriorate that net profit goal. At the end of the day, we always need to keep our eye on that. So change orders is the biggest risk. My recommendation to builders would be get a system in place where you can manage it. Don't let things fall through the cracks. That's an area that will eat away at your profit and surprise you at the end.

How does that work practically? Like, say, for example, in build tools, do you have a budget for a job in build tools and then the change orders are added to that throughout a build? Is that how it works? That's exactly right, yeah.

Start with a budget. As the change orders come in, they're going to have cost components with them. As the change order is approved by the buyer. We understand that now we have to collect more money, so we're triggered to do that. And the cost that we've come up with for that change order works itself right into the Budget. So everywhere we look in build tools, we always know our cost and how much money we're going to make at the end.

And is the builder uploading like their materials list and that kind of stuff into build tools or are you integrating with other tools? How does that work?

A little bit of both. They can, they can upload their own list, they can build it on the fly. They can pull in product catalogs from other, other systems. And we're continuing to, to evolve our marketplace so we can integrate with more companies that have designed takeoff product type parts and pieces and components.

Okay, I'm going to take a bit of a side step because just before Russ mentioned that you guys integrate the work in progress accounting adjustment into build tools and I'm interested to hear more about how that works and how you've seen an impact builders in your ecosystem.

Yeah. First I'll give a plug to the work and process training that you all do. It's fantastic. I would recommend that every builder in this space go through that class. It is the core financial piece that you need to stay on top of your finances so that you don't overspend and then get surprised afterwards. Little different than losing net profit on a job. It's about the business, very important. But at the job level, we need to be able to make sure that we have our budget, we have the actual costs that come in. And if they didn't come in yet and we know they're going to come in, we have to make sure we're planning for that. So the work in process calculator that the association of Professional Builders offers you're to going your customers to do and handle is great. You can certainly do it manually or if you're using build tools, you already have your budget defined, you have all your change orders like we talked about. You have the ability of going in there and producing a WIP report and that will pull the information from build tools and populate 95% of the fields that your users would be doing manually today. And then there's a link at the bottom if they want refreshers on the WIP course or if they want to sign up for it again. And that's all just contained in Build Tools today?

Yeah. Okay, so what are the implications of builders not tracking whip? Because it's not as common as it should be, Right?

Yeah. So if I didn't budget that I was going to have landscaping costs, then I would just expect invoices to come in and I would pay them if I'm in the Northeast and the weather's cold and the landscaper didn't come out. And maybe they don't come out for four or five months. I may close that job, move on and take that money in my bank account and invest it in my business or spend it. And then when that invoice does come in, I might get surprised by that invoice. Yeah. I may realize, wow, I didn't pay the invoice for landscape, but now I have to pay it. Well, that just kind of like turned things a little sideways in my planning for my, for my finances. So if I really think about that WIP calculation, I need to think about every line item that is going to cost me money, everything that's going to cost me money on this job. And when I receive that money, I need to know is it over budget or not? If I don't receive a bill for that, I need to know at some point I'm going to. So I have to accommodate for the fact that I'm going to spend money on that. Again, don't, don't lose your net profit, but don't be surprised by things if these invoices don't come in. They're eventually going to come in.

And I think the one bit you didn't touch on, but you kind of alluded to is like essentially you could over report on profit. Right. Because you think you've got more money in the business.

That's very dangerous.

Yeah, very dangerous.

So we're celebrating, we beat our net profit, everybody's happy, we spend the money and then we realize, surprise, you still have to spend money on this, this cost that was associated with that job. There's accounting implications and there's real life implications depending on what happened with the money.

Yeah. So you've got the work in progress built in there. And you also mentioned, like with every job you highly recommend, the builders are just monitoring net profit as well, like consistently, so they can stay on top of it. How regularly should they be doing that.

As the invoices come in? They should be. They should be posted in a way where they're going to compare to line items in a budget. Real time, all the time. They need to pay attention to where they are on this job. Regularly, Regularly for some builders. Could be weekly, it could be looking at it monthly. I think that what's more important is that the invoices come in in real time and you have controls in place that pinpoint people to ask the right questions when things are potentially over budget.

Yeah.

A lot of builders rely on Contingency and fluff and that catches over budget scenarios so they move forward and they don't have to stop. That's not a great practice. You want to be able to look at it, stop, understand why. And then at the end of the job, my personal recommendation is every job should be scrubbed. When you do blow a budget, we need to understand why we blew it. We need to have construction, purchasing and accounting involved in that conversation and sales. And we need to understand what went wrong and how are we not going to make that mistake again when we hit phase four or when we go to our next job moving forward. So I think that scrub at the end is probably the most important next to getting those invoices in on a timely basis so we can do that comparison.

I think that's a great point because it's probably easy to feel like, oh, I want to be perfect today, but maybe perfect is just getting better on every job that you do. Right.

100%. There's no sense in covering something up or assuming that I did everything okay, because the numbers look perfect if I'm going to make the mistake three more times this year on three more jobs.

Yeah, yeah. Okay. So have we missed anything? When it comes to today's client understanding how to work with them and managing.

Expectations, I think expectations are key. And again, just being upfront, that you are going to be the builder, the builder that's going to communicate, you're going to be timely, you're going to deliver what the client expects in the very beginning. And you're organized, you have something in place, you have systems in place and you're organized. That, that is going to give the impression that you are the person that they want to do business with, that they're going to trust with the money that they're investing in this.

On one side of the coin, there's a lot of builders that don't do that. So you can really stand out by doing that. Right. But on the other side, if you don't do it, there will be builders that do and then, and then you're going to miss out on any work. So that's exactly right.

You want to be competitive. You want to, you want to. I would look at it like this. There's a lot of people that need these services and there's a lot of builders and companies out there that can supply these services. You want the right customers. Right. So, so it's not about just, just, just closing the ones that are, that are out there. It's about getting the right ones in my pipeline and closing the ones we really want to do business with. And I think if you set yourself apart, you will get the right ones. Because in a good economy, everybody can work for, for anybody. There's enough work out there. You want the right ones that you're going to have good relationships with, that you're going to make money, that they're going to be happy with the product that you deliver.

And you might end up closing those jobs that end up costing you money.

Yeah, you don't want that to happen.

All right, so here's an opportunity to talk more about Build Tools and dive into the detail a bit. Give me a top to bottom pitch on what Build Tools does, how it supports custom home builders as well.

Well, first off, it thinks like a custom home builder. So everything from the very beginning when, when I go through and I make a proposal, the proposal has the customer in mind, has the client in mind, but it, it really nails down where is my cost. So it's designed for either. You could have open book or closed book jobs. When I go through and I create that proposal, everything starts with the contract. I can create that for the customer. They have the ability to approve it pretty quickly in their email once they approve it. That drives a budget. There's bidding tools in place that allow me to go out to my trade base and fine tune those budget numbers and get bids back in a very easy format that will drive into the budget. And then when I start construction, there's a scheduling component, there's the ability to track tasks and integrate those tasks in. There is document and photo management. And we have a patented feature that allows you to produce a report called Project Poster, pin it on your job site and allow any stakeholder to walk up to it with a smartphone that has a camera and take a picture of that QR code and see anything that you want them to see while they're out there. Real good communication throughout the process. Build Tools is allowing you to enter your invoices either there or in QuickBooks with a bidirectional sync. Full job cost reporting that you would get in QuickBooks Enterprise throughout the system, that type of reporting throughout Build Tools and it will take you all the way through the point of collecting your money from the client, closing with that client and making sure that you have a good warranty service experience at the end so that you're on top of any issues that may come up.

Yeah, you touched on like the fact that you can have the on site component as well, which is something we didn't really talk about the expectations of the client throughout the build. Come back to how they deal with the subcontractors and everything you work with as well, right?

Yeah. That on site component is critical. I mean, you could pull build tools up and use it from a smartphone or an iPad. Let's just call it stakeholder for everybody from clients to inspectors to trade contractors, anybody that needs to know anything about that job, they just go up and they hit the QR code while they're out there and it comes up in a real nice easy format for them to be able to see floor plans, download floor plans, see changes, contact a superintendent, report a problem, whatever they need just from hitting the QR code. That really helps the construction workflow through the process.

Sounds great. Well, Bob, thanks so much for coming on Professional Builder Secrets today live at ibs. Really appreciate it. For anyone that's listening back home, check out build tools on APB's rewards page or go to Build Tools website through the ECI website. And ECI software is also the booth right behind us here at ibs. So thanks for coming on.

Thank you very much for having me.

Awesome.

Thanks.