Biggest Little Builder in America

Shocking as this might be to other builders, large and small, the numbers don't lie. Pulte Homes, that bastion of bigness, had customer satisfaction scores in its Phoenix division that are better than those of every other builder that entered the NRS competition except for the small companies building fewer than 50 houses a year. And even at that level, Pulte more than held its own.

Pulte Homes of Phoenix had an NRS Index score of 179.85, derived from 589 surveyed buyers. That compares with an average NRS Index of 145.22 for all other production builders entered in the competition. The next-best score was 2.58 points behind. So Pulte Phoenix easily won the NRS Diamond Award for production builders - including those in the class from 50 to 99 closings a year. As if that's not enough of an eye-opener, the average custom builder score was 178.55, more than a full point below Pulte Phoenix's.

More than 96% of Pulte's Phoenix customers said they would recommend the builder, and 92.6% have made at least one recommendation. More than 32% have recommended Pulte four to six times to others in the market for a new home. That's the same kind of word-of-mouth loyalty that fattens the wallets of the best custom builders.

"Pulte's customer service is second to none," NRS president Paul Cardis says. "They empower their teams in each community to do the right thing for the customer, from first contact to beyond warranty. They train the sales agent, builder and customer service manager to make those tough judgment calls, and then they trust the call. So dealing with each Pulte community team is very much like having a personal relationship with a small custom builder.

"In warranty service, it's amazing how fast they turn a problem into an opportunity to impress. Yet people don't expect as much from Pulte because they know they're dealing with a huge company. There's a built-in expectation that a production builder will fight against spending money on houses after closing. When they're treated really well during the warranty period, it blows them away."

Pulte's Phoenix division president, John Chadwick, says everything he does in customer service is directly related to Pulte's corporate "Homeowner for Life" strategy. "Retaining customers as they move through different life stages and income levels is a key goal that all our systems, processes and training are geared around," he says. "It's a conscious business strategy, not a fad."

Pulte's seven-step customer relations process begins with a pre-construction meeting with the full community team. This meeting sets up the entire customer relationship. "We set expectations about the whole buying experience," Chadwick says. "We establish trust that will last into years of homeownership."

There's a critical aspect of setting expectations that Cardis calls "inoculation." Pulte Phoenix does it, and that's one major reason it did well in this competition. "They don't try to downgrade expectations," Cardis says. "You can't do that. That just makes people nervous about quality and service. But you can be truthful and align expectations to reality. What Pulte Phoenix has discovered is that buyers really want to know more about maintaining their homes, and they will eagerly embrace a learning relationship toward that end."

At every stage of the seven-step process, the community team stresses that houses, like cars, must be maintained to perform well and that the homeowner must actively partner with Pulte to keep the house in top shape.

"We teach them to spot trouble before the problem becomes big," Chadwick says. "The homeowner is another set of eyes. What they spot saves us money in the long run. And we find they are eager to learn how to prevent problems. For example, we teach them to look for cracks in the caulk around tubs and showers, anything that might let water get into a wall."

"That's inoculation," Cardis says. "They're telling the customer what might go wrong, how it could go wrong, how to prevent it and what it will take to correct a problem if it occurs. This prepares the customer for possible issues. The net effect is a more supportive, trusting customer.

"Pulte Phoenix engineers houses for high quality and low maintenance, but they augment this with an extensive ap-proach to education and expectation management. They have an active feedback loop in their construction processes aimed at continuous improvement. Whenever they discover a product performance or maintenance issue on the warranty side, they drive that information back into the pre-close orientation, where they alert buyers to watch out for it."

It's hard to train salespeople in construction knowledge and superintendents in relationship skills, but Pulte does it. It eases into the relationship hand-offs from sales all the way to warranty by having all three members of the community team involved in many of the meetings during the seven-step process.

"Pulte Quality Leadership" is a training initiative that introduces all employees to the "key drivers of customer delight." The firm also invests in "building quality relationships" classes. "It's a full day for employees and key trades where we do role playing and hands-on exercises to teach people how to react to different personality types and establish trust with diverse buyers," Chadwick says. "Every sales agent, super and customer service manager goes through it."

Pulte recognizes that warranty work is the key element in maintaining happy homeowners who will refer new customers years after closing and buy another Pulte home in the future. The firm's warranty processes are a clinic.

The customer service manager be-comes an advocate for the home buyer even before closing when he or she takes "ownership" of the home from the construction super during the "quality assurance walk," five workdays before the pre-closing orientation. "Once we deliver the home internally to the CSM, that person becomes the primary contact for the customer," Chadwick says.

When a warranty issue arises, customers can contact the CSM by faxing a warranty work request form they receive as part of their orientation package, by calling a warranty service hotline or by e-mail. "Our goal is to handle all warranty requests within a week, painlessly for the customer," Chadwick says. "The CSM will visit and assess what needs to happen, then coordinate the involvement of trade partners. We schedule work to the convenience of the customer, not the trade. We go in as a team, under the leadership of the CSM, sequence through the event, clean up and move out fast."

Chadwick concedes that requests for work beyond the warranty period are a constant challenge. "We visit, and our CSM asks himself, ‘Should this have failed?' If we don't think it should have happened, we fix it. But if a lack of maintenance caused the problem, we talk to the homeowner about that . It's why we spend so much time educating them about maintenance. And we spend a lot on training our employees how to handle those situations. We empower them to make the call. Our core value is to do the right thing."