flexiblefullpage - default
Currently Reading

New-Home Sales: Building Customer Confidence

billboard - default
Sales + Marketing Best Practices

New-Home Sales: Building Customer Confidence

Maintaining customer confidence creates a strong foundation for referral sales

By Charlie Scott, Contributing Editor April 29, 2014
Puzzle pieces fitting together
Producing a high-quality house isn't enough in today’s competitive home building industry. Increasing referral sales rates requires high-quality customer relationships, too.
This article first appeared in the PB April 2014 issue of Pro Builder.

Customer-centric home builders know that constructing a high-quality house is not enough in today’s competitive industry. These home builders realize that increasing referral sales rates requires high-quality customer relationships, too. The key is to develop a strategic plan designed to nurture the type of relationship that will maintain customer confidence throughout the long and arduous home building process.

Fostering customer confidence, just like building homes, does not happen without such a plan. Most customers begin the process full of confidence. On average, customers shop for nine or more months, compare dozens of homes, and peruse those home builders’ websites more than 10 times apiece. When they become confident that a particular home builder’s location, product, and price fit their needs, they purchase the home.

Top 5 areas of customer confidence gain

1. Clearly describing the home’s included versus optional features
2. Teaching the customer what happens next and guiding the customer through a friendly and predictable process
3. Executing a strategy to maintain customer confidence throughout the many stressful transitions that occur (e.g., design studio, mortgage, construction, closing, and warranty)
4. Delivering a clean and complete home; if any open items remain at the time of occupancy, resolve those items immediately
5. Smoothly transitioning the customer into the warranty phase with a completed home and education about the warranty process
From the outset, salespeople who know the value of customer confidence view their role as customer shepherds, in that they guide the customer through the early stages of pre-construction. These salespeople know their top four priorities are to: 1) clearly define the floor plan and specifications, 2) demonstrate the features of the home site, 3) outline what happens next, and 4) instill confidence in the team and company.
Eventually, the salesperson will pass the customer along to the design or construction phase, but the transition can be tricky. In order to avoid the customer experiencing a feeling of being handed off or abandoned, the salesperson should build confidence in the transition by selling the competency of their succeeding teammate(s). In other words, the salesperson is, from the start, creating layers of confidence.
And so it goes, as each team member transitions the customer through the selling, selection, mortgage, construction, and warranty phases. Each professionally handled transition lays another block on the customer’s confidence foundation.

Top 5 areas of customer confidence loss

1. Periods of more than seven days without a proactive outreach or update from the home building team
2. Reactive communications, i.e., waiting for customer questions
3. Handing off the customer without a personal introduction and confidence-boosting strategy
4. Delivering anything less than a clean and complete home
5. Not staying in touch with the customer post occupancy
If layering these blocks is the foundation of customer confidence, then communication is the mortar that binds the blocks together. Without mortar, block foundations collapse with the first shake, and so too will a customer’s confidence without communication. Home building companies that proactively communicate what the customer will experience next, set expectations, and quickly share both good and bad news score significantly higher in overall communications and confidence than builders that only communicate in reactive mode (i.e., waiting for customer questions). And customers who remain confident enjoy their experience more and trust their home building company enough to refer family and friends. While the precise statistical benefits are difficult to peg, our data suggests that home builders that focus on building high-quality homes, customer relationships, and maintaining customer confidence achieve 200 to 300 percent more in referral sales.
While constructing a high-quality home is every builder’s goal, adding a strategy to maintain customer confidence may be just the ticket to improve referral sales rates from the industry average of 15 percent to industry top-performer levels of 40-to-50 percent. Clearly, a part of the overall strategy should be to get impartial quantitative and qualitative feedback from your customers as to where their confidence grew and where they lost confidence. Identifying and fixing any customer-confidence slippage will put a company well on its way to higher customer confidence and future referral sales.
Customer confidence is not an accident. It arrives with all new customers, but must be nurtured. Home builders that understand and enhance it will be handsomely rewarded, both professionally and financially. 
leaderboard2 - default
Written By

Charlie Scott has over 30 years of homebuilding industry experience including front line roles as new home Salesperson, Builder, Quality Assurance, VP of Operations and EVP/minority owner. As an industry consultant, he’s worked with hundreds of home builders to improve their operational excellence. He also has evaluated more than 40 home builders as a National Housing Quality Award (NHQA) Examiner and was inducted into the NHQA Hall of Fame.

Related Stories

Housing Policy + Finance

Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises

Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers

Market Data + Trends

A Look at Homeownership Rates Across the Nation

Data for homeownership rates in the 100 largest US cities show Port St. Lucie, Fla., in the top spot, while West Virginia is the state with the most homeowners


Millennials on Top Again as Largest Homebuying Group

Millennials beat out Boomers as the largest homebuying cohort, according to a recent report, but Boomers remain the largest generation of home sellers

boombox1 -
native1 - default
halfpage2 -

More in Category

Delaware-based Schell Brothers, our 2023 Builder of the Year, brings a refreshing approach to delivering homes and measuring success with an overriding mission of happiness

NAHB Chairman's Message: In a challenging business environment for home builders, and with higher housing costs for families, the National Association of Home Builders is working to help home builders better meet the nation's housing needs

Sure there are challenges, but overall, Pro Builder's annual Housing Forecast Survey finds home builders are optimistic about the coming year

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.