Home Building: Are These Transactions or Relationships?

So, which is it? Is home building a transaction environment or a relationship business? Talk to a lot of new-home buyers and they make clear it's a totally transaction business.

Each week letters arrive in the Pro Builder office from buyers certain home building is all about signing the contract and handing over the cash at closing. Written by customers of builders big and small, these buyers burn the paper recounting the horrors of their home building experience. Problems vary from letter to letter and each perceived defect certainly contributes to the writer's outrage. However, in every missive writers tell of a poor communication, a lack of responsiveness and a complete disregard for their time and these factors mattered much more than the original problem.

One writer likened his relationship with his builder post-closing to the clerk at The Home Depot — and he didn't mean this as a compliment. Another faulted her builder for a superintendent stretched so thin that closed homes simply didn't matter any more. The salesperson, so attentive on the front end, doesn't return phone calls from the same customer (who she used to call daily, by the way) just 13 months later, wrote another.

Worse than the actual letters are the attachments. In these documents builders outline company policies, reference handbooks and explain away delays through rules, procedures and contingency clauses. At first glance, all of these responses are right; companies need to adhere to policies, procedures and protocols. What isn't right is the datelines on each letter. The time lapsed between inquiry and response stretches into months in many cases. Letters go unanswered, phone calls unreturned and for these buyers, their best and biggest purchase transforms into their worst nightmare and biggest regret.

Am I only hearing one side of the story? You bet. And so are their friends, their families, their neighbors new and old, their co-workers and everyone else they can get to listen.

Is there another way? Can these situations that create terrorist customers be prevented? Yes. Doing so involves very few changes to the handbooks, policies, procedures or protocols you have in place already. Doing so requires no more capital and, in the long term, probably a lot less.

The how can be found in a single sentence summary of this month's special report on the 2004 winners of the NRS Awards in Customer Satisfaction. Build your policies, procedures and protocols with the customer at the center; lead and train every staff member and trade partner to understand that your company values the customer relationship as demonstrated through its service. Not sure of the difference? The long version with all the answers begins on page 60.

Start with the customer's voice. What matters most to them in terms of satisfaction: for buyers of homes built by high volume production builders it's the overall quality of workmanship. For builders this should be good news; buyers hear your marketing message — new homes deliver a quality of living that can't be matched by purchasing an existing home. Rounding out the top five satisfaction drivers in this category are:

• home was built to expectations at the walk-through
• overall quality of materials
• warranty service provided the highest quality of repairs and services, and
• project superintendent was responsive to concerns.

The dynamics and thus the list changes slightly for buyers of homes from builders who construct fewer than 50 homes annually. Here buyers say the top five satisfaction drivers are:

• project superintendent provided quality workmanship
• home was built to expectations at walk-through
• warranty service provided immediate contact to schedule
• project superintendent explained construction process, and
• project superintendent was responsive to concerns.

What's different between two customer lists? The issues are really the same — quality of workmanship, home readiness, warranty responsiveness and quality. Buyers in the second group prioritized the relationship rather than the action, while customers in the first group rated the outcome rather than the relationship or action.

Where do you put your energy to get the biggest return, the better score? In building that relationship with a buyer that is supported through people every step of the way and demonstrated through service.

Heather McCune
Editor-in-Chief
hmccune@reedbusiness.com