How to Lose a Happy Customer

This magazine, its competitors, and even this column have had an awful lot of good news like this to relate the past couple of years. In fact, the J.D. Power market average has increased in each city measured every year since inception, with a single, statistically insignificant exception. While a builder posting a higher score from one year to the next does not always mean they have improved (see The Cost of Puppies, Lesson's Learned, PB October, '04), as an industry we should feel pretty good about our progress. Shouldn't we?

Well, Lois and Hank were feeling pretty darn good. So much so that on a trip to the southwest earlier in the year they made the decision to buy a second home — a nice 1600 sq. ft ranch with a great view of the mountains. It seemed perfect for escaping northern winters and getting together with their two grown children. This purchase was with a large regional builder, one that I expect will become fully national in the not-too-distant future. This builder's J.D. Power performance has been a mixed bag, though, with a couple of Top 10 showings and one very close to the bottom. But Lois and Hank loved the location and the salesperson was very helpful with securing the mountain view lot they wanted. Everything went fine with the options and selections process and they flew home, confident that they would have another first-class experience.

Just before Thanksgiving Lois and Hank returned to the southwest to close on the home and enjoy some time in their new winter refuge, and now the fun begins. On Friday the 19th they signed the papers. They now owned the home, but the peculiarities of this municipality meant that they couldn't have the keys for 5-10 days, until the deed was recorded. Of course, Lois and Hank were hoping that might mean Wednesday, before Thanksgiving, but were smart enough not plan on it and sure enough, they were told to expect the keys on Monday the 29th, a full ten days after closing.

Lois and Hank had been told that although they could not occupy the house until they received the keys, there would be people around the project most days with the exception of Sundays and Thanksgiving Day, so scheduling some furniture deliveries should not be a problem. They felt that the final orientation walk itself went pretty well, overall. There was an obvious chunk of baseboard missing from a bathroom, 8 or 10 paint and drywall fixes and a few other cosmetic items. Small stuff. You can argue whether there should be any small stuff, but it was basically a good house, one that Lois and Hank were prepared to feel really good about. So at this point, we have a happy couple with a great home in a beautiful location — their own little piece of paradise. Bring on the J.D. Power survey!

The first inkling of a "customer commitment deficit" came when the employee conducting the orientation walk was leaving and Hank noticed the 1/4 inch play in the front door. The service man told Hank he should have ordered the deadbolt option. Liz and Hank exchanged blank looks and said that was news to them - they had never heard nor seen such an option. Their guide just shrugged his shoulders and suggested they stop by Home Depot buy one and install it. "That should solve the problem." Despite his protests, Hank was told that was the only way to fix it. (Huh?)

On their way back to the hotel, a couple of things occurred to Lois and Hank that were quite different from their closing on the townhome back in their hometown. That builder was very clear about whom to call for service and who would handle what. This new builder left them basically in the dark. They weren't sure who was running what or how to get ahold of them. They stopped by their locked-up house several times the next week and found the project basically a ghost town. There was no one around, anywhere. They had to cancel their hoped-for deliveries. The frustration started to build.

Finally, at 4:00 on the Monday after Thanksgiving, having been in town now for two weeks in a hotel and due to leave in less than 3 days, Lois and Hank secured the keys to their new home. When they asked about the 4' X 6' foyer rug that they were supposed to receive when they picked up the keys, they were told that it would be delivered — sometime. The only thing they managed to get delivered was a new bed, but they weren't about to be denied. That night, as the temperature dropped to a near-record low in the twenties, quite unusual for this location, Henry's repeated appeals to the thermostat were met with icy silence from the air handler. Come morning, with the temperature of their new home in the 40's, they were more than ready for hot showers. The spigots were opened and dutifully joined the furnace in a chorus of — nothing. Frozen pipes? In this climate? Could it be? It could be, and it was.

For reasons Lois and Hank couldn't quite explain, instead of calling their builder, they called the water company who informed them that a lot of people were having this problem and apparently, the builder had not quite designed the service entrance for temperatures this cold. But after a couple of hours, the water began to flow. They assumed that taking close to 15 minutes to get hot water to the shower all of 30 feet through a slab was a first-morning fluke, but the next two mornings established this as a built-in feature of the home. (For all of you water heater sleuths out there, turning the temp up to its highest setting had no impact whatsoever. Very strange.)

They happened to see the service man in the neighborhood that morning and he successfully coaxed the furnace to come on, mumbling about something "not hooked up." There were other events those next few days that contributed to Lois and Hank's creeping sense of doubt about their new builder. For three consecutive nights, problems with their transmitter for the community entrance gate refused to work. Although parking their car off the side of the road and walking a half mile to their house, accompanied by a leering coyote, was somewhat amusing to Hank, Lois wasn't so sure. On Thursday they flew back home for the Christmas holiday with no answer yet about their frozen pipes, no help for their reluctant water heater, a still-malfunctioning gate transmitter and a front door that rattled in the wind. I asked Hank on a scale of 1 to 10, if the J. D. Power survey showed up now, how would he rate the builder. "About a five," he said, "maybe a six."

This is a sad story about how a builder goes to the trouble to find a great piece of land, build a good house, do all of the hard stuff well, then blows it over 4 or 5 details. We could spend another column talking about what went wrong and how to prevent it, but you'll learn a lot more if you take this scenario and go through it with your own people and ask some key questions. First, could this happen to you? Would your system really have prevented it? In this one relatively simple example, we saw problems with house design, communication before the sales, options, specifications, final quality control by field construction, quality by the suppliers and trades, communication during final orientation, communication at closing, among others. They were all pretty small things, and easily correctable. But the key here is that they were all easily preventable.

Could this builder get Lois & Hank back on their side? Well, they let 'em get away, that's for sure. Lois & Hank are now back up north, going to book club meetings, family gatherings and holiday parties telling everyone about their crazy experience taking cold showers after freezing in their new home all night — and asking if anyone knows a good name for a coyote.