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American Village Snapshot

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Company: American Village Builders

Headquarters: Portage, Mich.

Principals: Daryl Rynd, Jack Gesmundo

Employees: 20

Operations: Kalamazoo, Mich.

Market segments: Move-up families, affluent individuals

Product: Luxury single-family homes, condo townhouses in duplex buildings

2010 Closings: 33

2010 Revenues: $13.2 million

 

 

Take an HD Video Tour of an American Village Builders Home

 

 

 

It’s been a long climb for American Village Builders to reach the pinnacle of an AVID Award for best customer experience in the small builder category, but along with that honor, the firm has also achieved design leadership and a dominant position in the local luxury home market in Kalamazoo. It’s no coincidence.

Two of AVB’s five communities hit scores of 100 percent on the “would recommend to family and friends” metric in AVID’s surveys, two others averaged 98 percent positive response to that question. As a result, American Village Builders hit an AVID index score of 273.007. The index is a weighted score that combines the total home buyer satisfaction score, the recommend to a friend score, and the percentage of buyers making actual positive recommendations.

Go to American Village’s website and you’ll immediately understand its market niche. This custom and semi-custom builder (headquartered in the Kalamazoo suburb of Portage, Mich.) builds dream homes “on your land or ours” for affluent corporate executives of food giant Kellogg and a bevy of pharmaceutical manufacturers clustered in Kalamazoo.

“Our sales are driven by relocations of executives working for Kellogg, Pfizer, Stryker, and a couple of large hospitals,” says Jack Gesmundo, 43, AVB’s vice president of sales and marketing, and a partner in the company his father co-founded. Gesmundo now leads the residential side, while AVB president Daryl Rynd rides herd on commercial construction and land development operations.

Steady Improvement

American Village has been part of the AVID network since 1999 and Gesmundo says he used to envy AVID Award winners from afar. “We’ve been reading about them for seven years, from the days when we didn’t have scores like those,” he laughs, “but we just kept our focus on getting better every day. The AVID reports have been a great tool for us. We concentrate on the systems and processes the surveys tell us need the most work.”

For instance, AVB implemented a homeowners’ manual and streamlined warranty service after getting low scores in the warranty area. “After we made those changes, our scores in that metric improved by 80 percent,” he says.

AVB is close to a fully custom builder, and because of that it has more intense client relations than most production builders. “You’re not obligated to work from our plans,” Gesmundo explains. “We’ll build whatever you want, on your lot or one of ours (which run up to an acre in size). One of our most important contact points with customers is the selection coordinator. We will let you pick products from any appliance manufacturer, any plumbing manufacturer, and there are a handful of flooring stores in town, so guiding people through the selection process is critical in our system.”

Contact Points

AVB has three project managers in the field, each of whom builds about 10 houses a year. “They have 50 percent of the contact with buyers,” Gesmundo says, “and the selection coordinator has the other 50 percent.”

	Award Skips a Year
	There’s a curious change in the timing of AVID’s award announcements this year, one that means there are really no winners in 2010. This year’s awards are still based on data from 2010, but AVID decided to wait until spring of the following year to announce the winners. “We want to give the builders who win our awards the ability to market their triumph for a full year, beginning with the spring selling season,” says AVID CEO Paul Cardis. “That’s why we put off our announcement of the winners from the fall, when we used to do it, to the spring. We’re now like the Oscars, crowning our winners early in the following year.”

The handoff from sales occurs at a post contract meeting that involves the head of purchasing, a CAD designer, the sales agent, the selection coordinator, and Ron Pillars, who manages all construction operations for AVB. The firm volunteers to meet with buyers every week to keep them up to date on progress of the house. But key meetings occur at these points:

1. Pre-construction, with the selection coordinator, to get all the information needed to start building.

2. A pre-excavation tour of the site, with the project manager, to go over a long list of items, from driveway location to which trees will be saved to where the mailbox goes.

3. Post-framing, with the project manager, to check door locations, HVAC, etc.

4. Pre-drywall, to make certain everything is right before the house is closed up.

5. Pre-trim, to make certain AVB has the location right for every element of trim.

6. Pre-paint, a walk with the PM to “make sure we get all the paint breaks and flooring transitions just as the customer expects them to be.” Gesmundo says.

7. Final selections tour, two weeks before completion, just to make sure everything is right. “A few years ago, we had a house at that stage with tile that was ordered right,” recalls Gesmundo, “but the dye lot was really off and the tile looked pink, which was not what it was supposed to be. We had enough time to rip it out and get it right!”

8. Homeowner orientation, five days before closing, a thorough tour of the home including all operational details. “That’s where the handoff from the PM to warranty service occurs,” says Gesmundo. “Anything that comes up after that walk belongs to warranty.”

Broad Appeal

AVB’s top scores in the AVID surveys come from every area of operation:

1. Quality of walls (14.01 above U.S. housing industry average).
2. Time until closing (+12.54).
3. Available and informative sales staff (+11.27).
4. Doors (+11.04).
5. Heating and cooling (+10.78).

So even though the market is still depressed in Kalamazoo, AVB enjoys the benefits of its reputation for quality and value, which has kept the firm afloat on troubled waters.

“Kalamazoo had about 1,000 single-family closings a year at the high point of the market in 2008,” Gesmundo says. “This year, we’ll see about 300. But 2010 was a decent year for us, and we suspect 2011 will be quite a bit better.”

The condo portion of AVB’s production last year was about a third: 12 units out of 33 total closings. Gesmundo expects that to increase this year. “We just sold out of a neighborhood in Portage called Oakland Hills,” he says. “We’ll replace it with a new infill community right next to Western Michigan University. Those condos will sell for $250,000 to $600,000.”

That’s what happens with design and quality leaders. They do better than others, in any market conditions.

Bill Lurz has been reporting on every aspect of the home-building industry since 1970. A former editor-in-chief of Canadian Building and senior editor of Professional Builder, Bill is currently editor-in-chief of AvidBuilder.com. He can be reached at bill.lurz@avidbuilder.com.