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THE
BEST BUILDER IN AMERICA?
New-Home Builder Customer Satisfaction Scores are Here
Dear Colleague,
I receive
an electronic newsletter from a colleague of ours. His speciality
is real estate consulting. He recently sent me these statistics
about one of this country's biggest builders. This survey
is amazing.
I thought
to myself, "If the big boys can excel in customer service,
shouldn't we all be able to?"
The article
is a little longer than usual, but very revealing about our business.
Please enjoy and feel free to check out John Burn's work on his
website, http://www.realestateconsulting.com/index.html.
Take great
care,
Paul Montelongo
According to more than 70,000 new-home buyers, Pulte
is the best large home builder in America.
Why Bother Advertising!
You are not going to believe these statistics:
* More than 60% of Pulte's home buyers in Phoenix recommend Pulte
to at least 4 friends.
* More than 24% of Pulte's home buyers in Phoenix recommend Pulte
to more than 10 friends!
* The referral rates are similar for Ausherman
Homes in the Washington D.C. area, The
Green Companies near Boston, and Pulte in Minneapolis.
These results, which were tabulated by NRS
and Professional Builder
magazine (55,000+ Surveys), are not a fluke. In a completely
different survey of 71,000+ buyers by J.D.
Power, Pulte ranked first in Customer Satisfaction in 12 of
the 17 markets surveyed, and Ausherman was right near the top in
D.C. We have compiled the J.D. Power rankings in all 21 markets
into one
document if you are interested.
Successful Strategies
What all of these companies have in common is that they figured
out several years ago that excellent Customer Satisfaction leads
to higher profit margins. These companies don't need to spend as
much money on advertising because their buyers do a lot of the advertising
for them. Additionally, their customer service after the sale is
so strong that the odds of a construction defect lawsuit are significantly
reduced.
In the last three months, Professional
Builder and Big
Builder devoted entire issues to customer service. Two weeks
ago, J.D.
Power released the results of their annual New-Home Buyer Customer
Satisfaction Studysm. From these articles as well as my own experience,
here are the 10 suggestions I have to increase your Customer Satisfaction
scores:
1. Make Customer Satisfaction Part of Your Culture
- Pulte has a 7-step Customer Service program they initiated several
years ago. Ausherman and Green also take customer service very seriously.
In fact, I was sitting next to Marvin Ausherman at the Professional
Builder award banquet in New Orleans last week, and he was more
interested in gaining ideas to improve customer service than he
was in receiving any accolades for a job well done.
2. Quality Matters - The bottom line is that your
customers won't be happy if the home is poorly built. According
to Eliant, the most important
factors are that the walls must be square and all of the wood products
(cabinets, doors, etc.) must be installed properly. Also, buyers
expect that everything works and nothing leaks. As I reviewed the
J.D.
Power rankings, there definitely appeared to me to be a correlation
between the builders who had the best reputation for building quality
homes and those who scored well on the survey (yes, there were a
few surprises too).
3. Set The Buyers' Expectations - Buyers don't
know whether it takes 60 days or 180 days to build a home. Educate
them and keep them apprised of the progress. If you don't set their
expectations, they'll do it themselves. The Green Companies and
Laing Homes take photographs of the buyer and the home from
the date of sale to the date of closing, and present the buyer with
a photo album around their moving day. In addition to presenting
their buyers with a nice gift, these firms remind the buyers of
the successful delivery of their promises.
4. Communication - Successful communication strategies
during the sales process vary from builder to builder, but the important
point is that the successful builders have a communications strategy.
Some builders appoint one point of contact throughout the process,
while others appoint multiple points of contact with an in-person
handoff to the next person so the continuity is maintained. What
is important is that the buyer knows exactly who is in charge each
step of the way. Also, control the promises delivered by your staff,
and keep them. Salespeople, in particular, have a tendency to overpromise
to keep the customer happy. Control what they say.
5. Employee Cross-Training - If your salesperson
knows the basics about construction, and your construction superintendent
understands the basics of sales, your team will work much more efficiently
and your buyers will be happier.
6. Options and Upgrades - Big
Builder's survey of both buyers and builders found that the
Option and Upgrade process is far more important to buyers than
it is to builders. This is surprising, given the attention that
builders are paying to selling options. Spend more time guiding
buyers through the difficult option and upgrade process.
7. Homewner Education - Most home buyers don't
know the first thing about home maintenance. Pulte educates their
buyers about home maintenance issues so the buyer can recognize
problems as soon as they happen. Buyers appreciate this, and it
also gives Pulte the chance to fix a minor problem before it becomes
a major problem. Pulte schedules an appointment 30 days after closing,
and shows the buyer how to replace the air filters at that time
(and leaves them a fresh box of filters). Explain the warranty process
to the buyer, and then pleasantly surprise them by exceeding it.
8. Cleanliness - The cleanliness of the community
after "move in" is a major determinant of home buyer satisfaction.
Ausherman's warranty service professionals go the extra mile by
wearing socks or sanitary booties inside the home, which is appreciated
by their customers.
9. Stay in Touch - According to the Big
Builder survey, customer service is 8 times more important 10
months after move-in than 30 days after move-in, probably because
the excitement of buying a new home has worn off by then. At closing,
ask your buyers for permission to contact them on specific dates
and then follow up. Fieldstone
Homes recently started a separate, for-profit, handyman company
to service their buyers forever.
10. Measure it - It is difficult to improve Customer
Satisfaction without measuring it. If you are a large builder, you
can rely on the J.D.
Power survey as your measure. If you really want to improve
Customer Satisfaction, you should hire one of the industry survey
firms to help you.
NRS and Eliant are the
two companies I hear mentioned most often. Other consulting companies
that specialize in improving quality and customer service include
BuildIQ and Caldeira
Quality.
Consumer Knowledge
Improving your customer satisfaction makes good business sense.
If I was able to find the
J.D. Power rankings on the Internet, so will your potential
customers. J.D. Power added five more markets to their survey this
year, bringing the total number of markets surveyed to 21. I expect
that they'll add about 5 more per year for the next several years.
| About John Burns Real Estate Consulting |
John
Burns Real Estate Consulting, Inc. is dedicated to helping
real estate executives make informed decisions. Are you looking
for the next great idea, or for a way to monitor changes in
market conditions? Please review our services and then e-mail
us or give us a call at 949-262-3228. |
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October 6, 2003
What's new on
"101 Power Strategies"
101 "low-cost" and "no-cost" proven
strategies in this 144-page guide. Explode your construction business
to the next level and MAKE
MORE MONEY!
Paul
Montelongo
"America's Construction Industry Motivator"
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