Homebuilder Customer Loyalty Begins With Trust

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Loyalty builds trust. Read on to find out why earning your customers' trust is important for your business.

October 01, 2007

Given the declining number of new home buyers, it is now more important to have loyal customers singing your praises and referring potential clients to you. Customers, however, will only send business your way if you have developed a close and meaningful relationship with them.

The foundation of any successful relationship is trust, which is becoming more difficult to achieve in today's economic climate. Home buyers are more skeptical of what builders tell them, in part because of the high number of foreclosures and the urgency with which some sales associates are trying to close deals in a soft market. Salespeople appear less trustworthy when they push hard and fast to close deals to shore up shrinking revenues.

Trustworthiness is a by-product of one's reputation and past experiences. Accordingly, home builders should maintain the highest levels of customer satisfaction during tough times so their reputation can be used as a competitive advantage when new home buyers are harder to come by.

Indeed, a major source of trust comes from demonstrated competence. We examine the plaques on the physician's wall, the badge on the police officer's uniform or the tenor in the pilot's voice during in-flight turbulence to gain clues into matters of competence. As a home builder, competence can be demonstrated with high customer satisfaction ratings and through the eagerness of loyal home buyers to refer potential clients to you.

"Competence should be constantly in the demonstrator mode," says Chip Bell, a business consultant and author of "Customer Loyalty Guaranteed! Create, Lead, and Sustain Remarkable Service," which he co-wrote with John R. Patterson. Proving your proficiency is not about boasting; it is reminding the customer he or she made a smart decision in coming to you. "It is important the service provider know how to show off without being a show-off," Bell says.

There are a lot of ways to communicate confidence, says Bell, who offers the following suggestions:

  • Tell a story about another customer that uses your expertise as the backdrop, not the subject.
  • Sprinkle conversations with tidbits from your resume: "More than 80 percent of our customers have referred potential home buyers to us; I'm glad you're one of them."
  • Point out special achievements with an obvious mixture of humility and pride.
  • When a vendor raves about your work on a particular house, ask him or her to repeat the compliment to the home buyer.

Note, however, that the quickest way to destroy trust is to not deliver on a basic expectation. Failure to deliver any of these basic expectations will destroy trust in that business. Home buyers rightfully assume the home they are purchasing will be delivered as promised, the price fair and the experience relatively pleasant.

The best home builders in customer satisfaction do a lot to make the service experience memorable. However, they also know that wow factors do nothing to ensure a great service reputation unless the basics are always done perfectly.

Customer loyalty research repeatedly shows that customers are forever on the lookout for signs they have made the right decision. Bell says customers who are confident they are getting the best value for their money are more forgiving when errors are made — and are more likely to become loyal advocates for your business. That's when you really know you've earned their trust.


Author Information
Paul Cardis is CEO of Avid Ratings Co., formerly known as NRS Corp. Avid Ratings is a research and consulting firm specializing in customer satisfaction for the home-building industry. He can be reached at paul.cardis@avidratings.com.

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