Referral Factors

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The best practices that lead to superb customer satisfaction.

September 01, 2003

Many home builders guarantee customer satisfaction, but few really know how to deliver it. Too many home builders don their customer service hat only during the final walk-through, when there’s a mad scramble to please the buyer and close. But good customer service isn’t something you turn on just when there’s a problem. It’s a way of doing business before, during and after the sale that affects customer relations today, tomorrow and next month. If done right, first-rate customer service not only translates into satisfied buyers, it also leads to referrals — the lifeblood of any home building enterprise.

When you look at the whole notion of creating satisfied customers, it really comes down to keeping unpleasant surprises and worries to a minimum. This is done by communicating honestly and frequently with clients and letting them know through words and actions that you have everything under control.Here are seven customer service strategies that can help you turn ordinary customers into extraordinary advocates for your business. All of the 2003 NRS Award winners employ one or more of these tactics.

1. Make Smooth Transitions.
With some builders, a home buyer might work directly with a half-dozen people between the initial sale and warranty service. These transitions can be difficult and lead to poor customer satisfaction unless everyone on staff — salesperson, options coordinator, project superintendent, etc. — is tuned in to the customer’s needs.

To create smooth transitions, handoffs between departments and staff must be seamless. This is a lot harder than it sounds. You must have good tracking systems to know where home buyers are in the construction process and what needs they present. You must have a steady, reliable workflow because logjams in the process can “stop the line” and create huge customer dissatisfaction. You also must have excellent employees who are trained extensively in customer service and know how to handle a variety of customer types.

Each transition offers a great opportunity to involve home buyers in the process. If appropriate, use these times to educate buyers and give them an opportunity to ask questions and raise concerns. By engaging buyers during transitions, you’re truly partnering with them.

2. Set Realistic Expectations.
The best builders set reasonable expectations. Often, customer satisfaction plummets because builders oversell the new home dream. If you make promises you can’t keep, count on having unhappy customers.

This doesn’t mean you should “dumb down” the experience so you can meet every benchmark easily. It means you should be honest when establishing customer expectations. Also, expectations might need to be adjusted throughout the building process if conditions change. And the sooner expectations are aligned with the experience, the less likely you are to disappoint the buyers.

One way to do this is to formalize your communications with clients. Some builders use transitional phases to communicate reasonable expectations. For example, post-sale orientation seminars or pre-drywall walk-throughs are great opportunities to check in with buyers, let them know how the next phase of construction will go and eliminate misconceptions that could lead to customer frustration. An important tool for setting expectations is a high-quality homeowner manual.

3. Practice Inoculation.
We all know how doctors immunize children against various diseases with a single dose or a series of vaccinations. You can inoculate your customers against dissatisfaction by using the same concept. Introduce potential problems to them early so they have greater immunity to a problem should it occur.

Inoculation goes beyond proactive communication, though, in that it lets you present possible scenarios that might happen but often do not. For example, Pulte Homes Phoenix uses the pre-drywall orientation to bring up the possibility of water intrusion, how it happens, what kinds of damage it can cause and how the company would fix the problem if it happens. Pulte Phoenix also talks about ways the buyer can help keep the problem from happening in the first place. That way, if water intrusion does occur, the buyer is prepared for it, reducing any significant quality and satisfaction issues with the builder.

4. Know Your Customers.
Conduct a quick personality assessment to determine the best way to communicate with and sell to each customer. Every home buyer is different. Some buyers have no design sense and look to their builder to make all design decisions, while others want to control every aesthetic. Some have budget restrictions, while others are willing to spend more for upgrades if merely presented with the options. Some don’t want to know what’s going on with the project until move-in, while others want to know every detail.

If sales representatives are trained to identify and work with a variety of personality types, they’ll be in a better position to know what the sales proposition is from the onset and work with the client in a way that meets his or her needs and ensures customer satisfaction. It’s important to note that many home buyers are couples whose personality types might be extreme opposites. In such cases, it’s in the builder’s best interest to learn about both clients in order to meet their individual as well as collective needs.

The most important facet of knowing your customers is whether they will be satisfied with the experience your company provides. Ask yourself what the probability is that a particular customer will be happy with your homes and service. If it is less than 50/50, you might want to send this customer to another builder.

5. Create Relationship Value.
Continually strengthen your relationship with your buyers. By creating added value in your relationship, you reinforce their trust in you as a builder. Customers who like you are more tolerant if things go wrong and more cooperative while you find solutions.

The Green Co. provides superb examples of how to enhance relationship value. It presents buyers with photo albums at closing with pictures of their home throughout the construction process, and it holds fun events for its newest buyers to meet its oldest customers. Whatever strategy you implement, the key is to show customers you are sincerely interested in them.

Finally, relationship value directly affects the “perceptions minus expectations” equation for customer satisfaction. So beware: Low relationship value can turn dissatisfied customers into “company terrorists” (i.e., customers who generate negative referrals).

6. Develop a Wow Factor.
Any company that shines in customer service does many things well but usually excels in a particular category. For Shamrock Builders, it’s answering home buyer questions within minutes or hours rather than days or weeks. For Pulte Phoenix, it’s not only replacing air filters during the 30-day inspection of all its homes but also educating buyers on how to replace the filters and leaving a full box of filters with them.

To develop your wow factor, select one thing at which you can excel better than any other home builder in your area. Master it throughout your organization and make it an integral part of the experience you provide your customer.

7. Abolish 'Survey Talk.'
Customer feedback is an important tool for improving one’s business. So it’s no surprise that more and more builders are turning to customer satisfaction surveys. While industrywide data on customer satisfaction can help you analyze your performance, nothing can replace the customized data that come from surveying your own customers.

Problems can arise, however, when bonuses and incentives are tied to survey results without established policies that define “survey talk” and restrict how it will be used in your organization. Survey talk occurs when a representative presents a survey to a customer and asks if there is any reason he or she cannot give top scores throughout.

This often is presented as a final opportunity for the builder to “make things right” and leave the buyer 100% satisfied. More often, however, the rep’s true motives are transparent. As a result, too much survey talk can create a ceiling effect, whereby the rep taints the customer’s perception of the relationship, and the customer’s satisfaction level is frozen. Instead of creating a raving fan who could generate numerous referrals, you have a merely satisfied customer who might be happy but not delighted.

The best option is to remove the rep from the survey process. Never force buyers to fill out surveys in the rep’s presence and always make sure conversations remain focused on the customer’s needs, not the rep’s desire for positive ratings.

It takes open, honest communication with clients to generate high levels of enduring customer satisfaction. To maximize profit potential with your prospects, integrate some of these customer relationship techniques into your processes. You might be surprised how far positive word-of-mouth travels.

Professional Builder will publish a series of columns exploring each of these seven principles in greater depth.

Paul Cardis can be reached at

paul.cardis@avidratings.com.

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