The Raving Fan Rate

Asking customers if they have actually recommended their builder is an important innovation in the NRS research. It separates intentions from actual behavior. "What we are calculating is customers who actually refer their builder as a percentage of total customers," says Paul Cardis. "It's not a referral sales rate."

It's closer to a raving fans rate. Builders usually calculate referral sales as a percentage of total sales. It often includes people who come to the sales office as the result of referrals from anyone -- employees, Realtors, vendors, trades. Our coverage of the NHS-winning builders includes referral sales rates, but they come from each company's internal tracking system. It's important information because it's clear that customer satisfaction drives referral sales. The builders track it because they know it is one of the most important factors in their success or failure. But keep in mind that those rates are not derived from NHS data, and builders calculate referrals differently.

Considering that builders who don't think they do well with customers probably did not enter this competition, we can't look at the pool of buyers surveyed for NHS as representing the housing industry at large. Still, we have to be encouraged that "would recommend" scores were high across all entrants.