How Homebuilders Can Deal with Difficult Customers

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Every home builder has stories about clients who make the home building process much more complicated with their demanding personality or with their personal demands. When conflicts arise, finding a resolution can be smooth and speedy — or result in headaches all around, depending on how well the builder and his team are prepared to respond.

July 01, 2007
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Tips for Coping with Difficult Customers

Every home builder has stories about clients who make the home building process much more complicated with their demanding personality or with their personal demands. When conflicts arise, finding a resolution can be smooth and speedy — or result in headaches all around, depending on how well the builder and his team are prepared to respond.

 

Special Issue: Risk Management

Contentious customers are a fact of life for all businesses owners. Nowhere is that more evident than in the complicated process of constructing a home. With its countless material, mechanical and human components, the opportunity for mistakes, miscommunication and misunderstandings is always just around the next stud wall.

The reality is that the builder/client relationship is a long-term one, often lasting for a year or more. Getting along on a personal level will make the process work more smoothly. But, like building the home itself, laying a good foundation for the builder/client relationship takes work as well.

"You have to remember that building a home is a huge personal investment on the part of the buyer," says Tony Perry, president of Oakwood Homes in Woodstock, Ga., who has nearly two decades of experience building production and semi-custom courtyard homes throughout metropolitan Atlanta. "Most of the time this is the biggest purchase of their lives, so their tendency to be more reactive in a situation that they feel is out of their control is understandable. This is particularly true when they don't have a clear understanding of what goes into building a home."

Jeff Ainslie agrees. He's president of Ainslie-Widener, a Virginia Beach, Va.-based residential construction firm with projects that range from semi-custom and custom homes to condominiums and apartments. "Buyers don't always understand the complicated processes involved and the multitudes of trade contractors necessary to complete their home."

Building homes that range from $250,000 to $2 million, Ainslie's firm features five separate divisions, each which handles a different customer profile. The company offers buyers levels of customization that range from homes that have less than 50 options to design/build projects that may require more than a year in the planning and design stage alone.

Recognize Risks and Opportunities

The sales adage, "Make your customer happy, and they'll tell a friend; make your customer unhappy, and they'll tell 10 who will each tell 10 more" rings particularly true in the business of building homes.

"When a customer is unhappy with their builder or there is a problem with their home," says 30-year home building veteran, Matt Swyt, president of Alluring Homes in Charlotte, N.C., "the news spreads throughout the rest of the neighborhood. People pick up on the negatives very quickly. And this negative publicity can really take a bite out of the builder's profits. Often these costs are intangible, but they are hidden everywhere in the home building process.

"The bottom line is that valuable time that could be spent making money is lost when a builder has to manage the damage that can be caused by a disappointed customer."

Can there be a silver lining to the cloud that a difficult customer brings to a residential construction project? "Definitely yes," says Perry. "A challenging customer can actually be a huge service for your company by providing you with an opportunity to learn something new or improve on some element of your business by turning a negative into a positive."

Identify Causes of Conflict

Because many factors can lead to a customer's being difficult, it is important that the builder understand the motivation behind customer actions. They may be angry, frustrated, disappointed, uninformed or simply have a challenging disposition.

"Buyers may have complaints about the construction of the home itself, about the products being used, the amount of attention they are receiving or they may just not understand the process of how a home is built," says Perry. "And there are certain periods during the construction process where you can just expect them to become more challenging, including around loan approval time and just before closing."

"Sometimes we recognize challenges during a customer's meeting with our design team," says Ainslie, "when getting all parties to agree on selections can be rather exciting. Other times, all may go well until the pre-construction meeting, where the buyer's expectations have not been translated properly to the plans for their specific home."

Buyers who are new to the home buying market do not always know the right questions to ask, but often get lots of advice from others, says Perry. Seasoned buyers, who have already owned a home or two, come to the sale with a whole set of predispositions and opinions in hand.

"The builder can use both situations as an opportunity to create a foundation for educating the buyer," he continues. "Overall, I feel that most buyers are realistic and fair. They recognize that we, as the builder, are bringing together the pieces of a very complex puzzle."

Communication is Key

Managing customer expectations by spelling out the details from the outset of a project through its completion is critical.

Make sure that the sales contract is thorough and understandable; products and materials use and warranty information is clearly defined; and that the buyer always knows who to go to when a question or problem arises. Also, offer customers a way to track the progress on their home's construction. All of these things go a long way toward making a buyer more relaxed and less confrontational.

A well-informed client can be a big asset, say the experts. Welcome them into the home building process by providing them with a format for asking questions and getting answers. The better they understand how things work, the more likely they are to understand where their own responsibilities lie.

Oakwood Homes allows its buyers to get involved as much as they want, says Perry, who estimates that nearly 95 percent come out periodically to the job site.

"If you bring them in during the early stages, the chances are better that you will have a satisfied customer in the end. The benefit of them watching over our shoulder is that they can catch things that we may not.

"I don't consider an involved buyer a nuisance. In the end, their scrutiny helps us do our job better — and their extra set of eyes is free."

Perry says quick and clear communication gets problems resolved and leaves a buyer more likely to recommend you.

And, keep in mind, when customers have a question, they really want to hear the answer from the person who makes the decisions rather than have it relayed to them via a third party.

Today's Buyers Demand High Quality

Improved production techniques for products and materials resulting in extended warranties from manufacturers have raised the bar for what is acceptable, and home buyers' expectations for quality, durability and energy efficiency have soared because of this. That has prompted Perry's company to set the bar equally high.

"Buyers may be downsizing," says Perry, "but they still expect top quality in their homes. This makes them more demanding than ever in some ways because they recognize quality as a value to them in market perception and appreciation."

"It is very important to maintain the highest level of quality control throughout a project," agrees Swyt.

"Fix things that are wrong even when someone does not complain. It is much more expensive to do repairs once the customer is living in the home."

Ainsle's firm has honed its quality-management skills to the point that it does not have a separate warranty department. The goal: prevent defects rather than leave them to inspectors to find.

"We have discovered over the years that you can't add quality on; it must be engineered into the design and product selections prior to actual construction. This, along with constant oversight and inspections, can ensure a near 'perfect' home."

Value Your Team

Perry knows employees serve as a key component to a builder's success, as well as how critical it is employees understand their role in the building process. His No. 1 recommendation for developing an effective residential construction team is to make sure each staff member receives professional training in customer service issues.

"Never permit your employees to be abused or berated by demanding customers," Perry continues. "Teach them how to handle difficult situations through training and role-playing exercises that will improve their interpersonal skills."

"It is also important that your employees don't burn out on these kinds of issues," says Swyt. "Also, keeping them up-to-date on current materials and construction methods ensures that they will have solid, reliable answers to customers when they ask."

Internally, it is important a builder backs up his or her employees so they work as a team and present a united front to the customer.

"This makes it much less likely for misunderstandings to occur and results in a more timely resolution to problems or answers to questions," says Swyt.

Don't Take the Money and Run

"Never leave buyers empty-handed once the project is completed," advises Perry. "Make sure that they receive — and clearly understand — their warranty package."

Another way to generate good will and recommendations from past customers, he adds, is to provide them with the benefit of your access to the trades. "They will appreciate the fact that you are still willing to give them your time and attention, sometimes years later, even when they are paying the costs."

Ainslie's buyers often contact the company long after the sale regarding non-warranty issues or repairs. "Our project managers understand that their ongoing compassion for those buyers and their homes, along with any assistance they provide necessary to make that buyer happy, is what sets us apart from many other companies," he says.

Remember, when the job is finished, your opportunity to generate positive referrals continues.


 

Special Issue: Risk Management:

Overzealous Claims Lead to Liability Woes

Liability Insurance for Homebuilders



Your Construction Manager: First Line of Defense

How Homebuilders Can Deal with Difficult Customers



How Other Homebuilders Avoid Risk




 

Tips for Coping with Difficult Customers

The right approach can go a long way to diffusing a volatile situation. Across the industry, experts have advocated builders:

Maintain self-control at all times, even in the face of their anger.

Listen to the customers' complaint and acknowledge their right to make it.

Avoid emotional reactions or phrases. Keep the focus of the conversation on the actual problem.

Ask customers what type of resolution they want.

Avoid negative responses. Rather, tell customers what the building team can do for them, or provide a number of solutions they can choose from.

Always provide honest answers to their questions, never just what builders think they want to hear.

Never make promises that can not be fulfilled.

Respond to customer complaints as a member of a united team.

Be willing to include customers in the home building process by taking the time to educate them when they have questions.

Follow up after the job is done to make sure the customers' complaint has been resolved to their satisfaction.

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