By Isaac Heimbinder. Successful home building is much more than just closing large numbers of units, yet volume remains a distraction in the industry. People talk size and about being on the New York Stock Exchange as if bigness is the only consideration. In reality, the quality of a builder's construction and customer service create its reputation within a community and in the long run count a great deal as well.
Until recently, housing wasn't as focused as other industries on providing higher levels of customer care. Now customers — accustomed to getting what they want from other types of purchases — are forcing builders to hasten this change.
Size does have its rewards in areas such as national purchasing. I understood and used the benefits of size to create a competitive advantage at U.S. Home Corp. When I joined Kimball Hill earlier this year, I needed to step back and determine ways our medium-sized company could effectively compete with those who use size to create advantage.
It is important to recognize that what is relevant to the home buyer is the quality of the home produced and the level of service provided throughout the process of buying as well as after the closing. Herein lies an extremely effective tool to develop a competitive edge over other builders, no matter what their size. The notoriety that comes from being one of the top providers of high levels of customer satisfaction distinguishes a builder to prospective home buyers and Realtors.
Of course, to earn recognition you must first create that value for the customer. Once this level of recognition is achieved, however, a builder absent from the Builder 100 list may place above those big builders in the customer satisfaction rankings put together by companies such as J.D. Power. These third-party endorsements significantly increase a builder's credibility as well as exposure. Size Equalizer
The publicity that comes with such recognition is free. In addition, you can capitalize on your hard earned recognition on your Web site. Because half of the country's home buyers will never deal with a national home builder, very few builders have national or even regional name recognition. Imagine a prospective customer shopping on the Internet to narrow down his search for a new home. There is no way to immediately distinguish the large builder from the small. An internet presence, which comes at a relatively low cost, earns a builder recognition that is potentially disproportionate to its size.
For those builders willing to invest the energy needed to achieve high levels of customer satisfaction, the opportunities are real. For those who choose volume, the opportunities are limited to the commodity housing business, where competition is based on price.
Published in BIG BUILDER Magazine, November 2002